The organization’s life cycle is crucial to understand for any business leader, startup, and owner.

Organization life cycle in history

Chasing and destroying wealth is the history of countries, civilizations, and corporations. If wealth could be maintained “naturally”, there would be no collapse of Rome, Greece, the Aztecs, or the Maya, all of which were once major civilizations with all the wealth of their time. However, these were not long-term solutions. They all ended in disaster and defeat. There would be no Enron, Lehman, Bear Sterns, and hundreds of other companies that died if the virus that killed them was not contained in their money. However, the virus is present, and the leaders are unaware of their own diseases, seduced by the mirage of financial power. It is a faint illusion.

“History does not repeat itself, but rhymes,” Mark Twain once said. That is a fair assessment of the value of history. There are broad patterns that seem to follow some natural evolution, just as there are natural patterns in the birth and growth of newborns, the growth of animals, and even the growth of plants. There can be no precise map of the path taken from history, but knowledge can be learned from patterns.

The culture of a company or civilization at its beginning is one thing, but its culture as it matures or declines is quite another. In different years, the behavior, attitudes, talents, and intentions of leaders differ. And the amount of money you have varies depending on where you are in your life. The company’s financial assets are obviously limited when it is established.

However, it can be rich in creativity or the spiritual character of commitment to a great goal. As the company matures, it becomes more and more focused on improving the process and accumulates social capital both in brand capital and in internal relations.

Material resources are increasing, and with it comes the shift of motivation from a single goal that delighted early followers to a more limited self-interest. As financial resources grow and managers increasingly withdraw from individuals who better understand finance and financial control mechanisms, the innovative spirit disappears and social interactions fall apart. Companies, as well as civilizations, are falling as a result of social fragmentation, loss of trust, and lack of creativity.

Culture hardens, numbs, its blood clots, its power breaks, and it becomes a civilization when the goal is achieved – an idea, the full content of the inner potential, fulfilled and externally relevant. “

“We have learned that civilizations are born in situations that are unusually difficult and not unusually easy,” Arnold Toynbee wrote many years ago. “The bigger the barrier, the bigger the growth stimulus.” He defined the role of leaders in the evolution of civilization as those who perceive the problems posed by their environment and then gather a creative response to those obstacles. Both in society and in corporations, this creative response to the challenge is a growth mechanism.

The “state of lightness” leads to stagnation, not growth. Every invention is a response to a challenge, whether it comes from outside or from within. After a successful reaction, additional obstacles to development, scope, specialization, and organization arise. With increased size, complexity, and wealth comes more free time, a penchant for satisfaction over challenges, growing consumerism, and the arrogance of leaders.

Challenge for leaders in the organization life cycle

Leaders who do not recognize the challenge are losing their inventiveness and are increasingly relying on yesterday’s successful solution when faced with new challenges. The cause of the deterioration is this state of lightness combined with the lack of innovation. Too often, organizations go the same way.

There is a double process of integration and disintegration during the organization life cycle of civilizations and enterprises. When civilizations or companies expand their borders, they bring new people, ideas, competencies, and cultures.

When they stop integrating and expanding, they begin to protect their borders and raise walls to keep energetic barbarians out, and the internal process of disintegration begins. As the emphasis shifts from attack to defense, energy is increasingly directed inward rather than outward. Personal interest and internal disagreements are increasingly replacing the spirit of unity of purpose.

Soon, the body of culture is involved in internal struggle and self-harm, and the opponent marches to fill the void left by the impotence of the old culture, instead of conquering. Toynbee concluded that the downfall of every civilization is caused by suicide, lack of will, and disintegration of culture, and not by an external enemy.

Whether or not you agree with Toynbee’s theory of the rise and fall of civilization, there are clear lessons for business and government leaders. This can be seen in the developmental stages of the Visionaries, Energizers, Creators, and Researchers.

You can also witness that the dominance of administrators, Energizers, and Spenders is starting to worsen and diminish. You can only hope for a synergistic era, in which the best attributes are balanced.

Read more about cycles in our next post.

And as always, have a great day!