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The Life Cycle of Organisations: How it relates to board and leadership

I recently read an article by Julie Garland McLellan that referred to the Holling’s (1987) Cycle of Adaptive Change that organisations go through as part of their natural lifecycle of development. This is something that I have always intuitively been aware of. 

I recall, many years ago in my first CEO role, sharing this concept in a simpler form with members of my management team. At the time I was leading a newly established organisation – not a start-up, but an organisation that was created as a new entity. It required a leadership approach from me as the new CEO and a strategic and governance approach from the newly established Board that matched with the stage of growth that the organisation was at in its lifecycle. Only with this in place could it successfully scale up and grow to the next stage of its development. Fortunately, this is exactly what happened.

What I have learned over the years is that the natural lifecycle development stage of the organisation determines the type of approach the Board and the leaders within an organisation must adopt. At the same time, this also influences what type of CEO needs to be on board to lead the organisation. This is determined by whether it is a start-up, one that is scaling up, stabilising, has reached its maturity, is declining or a turnaround requiring renewal.

Different leaders and their skill sets and capabilities are suited to leading organisations that are at particular stages of development.  For example, in a start-up, a key capability is for the leader and the Board to be comfortable dealing with uncertainty and the unpredictable world of start-ups. The role of the Board is often very ‘hands on’. Also critical at this start-up stage, is the ability for both the leader and Board to develop a clear purpose, vision and values to guide the future direction of the organisation.

This may seem obvious, but often you find a mis-match and organisations then struggle and poor decisions are made.

What stage in the natural lifecycle of development is your organisation, and does leadership and governance match where it’s at?