“Growing Pains” occur due to organisational development that is inappropriate to the size and complexity of the company. They are a sign that the company’s development is not proceeding as it should. They appear as a warning signal and indicate the need to move to the next level of organisational development. They are a set of key indicators affecting the company’s future financial results.
Paradoxically, “growing pains” result from the company’s successes, not failures. Nevertheless, they are both a problem in themselves and a sign of a fundamental systemic problem in the company. It is caused by mismatching the infrastructure of the organisation and its size and character. This means that the resources, operating and management systems as well as the company’s culture (the four most important values of the Pyramid of Organisational Development®) have not been developed to the extent appropriate to its size, complexity and level of growth.
Even successful companies will face problems, unless their causes are properly diagnosed and resolved. The companies may even face the risk of falling. Therefore, to deal with the problems, you must first recognise them and then assess their severity.
Top 10 symptoms of “growing pains” affecting businesses
Developing a business without an action plan is like sailing a boat that is leaking through unknown waters surrounded by sharks. One mistake can cost life. Just as the crew of a boat dreams of a guide that will help them in navigation, fix the boat and provide the necessary knowledge, so the management of companies needs a guide that will help in the organisation’s development process.
prof. Eric Flamholtz
Our empirical research shows that there is a statistically large correlation between the occurrence of “growing pains” and financial results. Variables used in the model of “growing pains” affect 80% gross margins and 55% operating profit.
In statistical terms, there is a significant relationship between the Pyramid of Organisational Development® and the return on investment (ROI).
There are threshold levels for “growing pains” that are dangerous or unhealthy for future financial results. There are also grounds to claim that there is a maximum level of acceptable “growing pains”, passing of which puts the financial condition of the company in jeopardy. This maximum level is around 30 points. This means that in order to increase its chances of profitability, a company should keep the intensity of its “growing pains” below 30 points.
Discover the stages of organisational development. Check how mature your company is. Choose the key to its success depending on the development phase.
Companies are transforming. Their various stages of development are largely related to the amount of their annual revenues. The framework allows us to identify the most important stages that all organisations undergo while growing. Depending on the phase your company is in, you need to set different development objectives and focus on developing different levels of the Pyramid of Organisational Development®.
Value of strategic planning
The real value of strategic planning is not the plan itself, but the planning process, systematic analyses, discussions and solving specific problems.
“Plans are nothing; planning is everything” Dwight Eisenhower, former US president, Supreme Commander of the Allied Expeditionary Force in Europe during World War II
What distinguishes companies that successfully conquer development stages and avoid all the pitfalls? To find out the factors hampering the growth and development of companies we have examined almost 800 Polish organisations.
Here are the 3 most important conclusions: