According to the Greiner’s Model of Organization Growth and Decline, every organization will grow through several stages. At the beginning, the company starts as small and undergoes five phases until it’s considered matured. In each phase, there will be one factor that will allow for the growth but at the end of each phase there’ll be a crisis that will cause the growth to stop. Thus, this crisis needs to be solved for the company to continue growing.
Applying this model to the Google Corporation, we notice that during Phase1 (creativity), the culture that Larry Page and Sergey Brin start as the founders largely influences the leadership within the company. This culture is designed to encourage cooperation and rapid idea development. As the company enters phase 1, the founders feel the need of a strong manager who has the necessary knowledge and skill to introduce new business techniques.
Page and Brin hire former Novell CEO, Eric Schmidt, as Google’s CEO and the company starts hiring more managers with experience, reducing the number of direct reports per manager. Then Phase 2 (Direction), the company starts to grow again with new capable managers in place. At the end of this phase a crisis develops from demands for greater autonomy on the part of lower-level managers. Google found that the solution would be through delegation. In phase three, Google managed not to lose control over everyday operations by having all the managers get in one room and talk through a consensus decision-making process. Hence, the Phase 3 (Revolution) is under way when top management seeks to regain control over the total company. Google was able to overcome this problem by putting additional effort into reporting up and communicating in all directions through the use of special coordination techniques and introducing a series of tools designed to provide more transparency. In Phase 4 (Coordination) growth continued through these new coordination techniques. A new crisis appears which is the “red tape crisis” where increasing reporting and control adds layers of bureaucracy at all levels. In an effort to avoid bureaucracy the director of sales, Scott, invited members of her group to participate in a quarterly session she called “Avoiding DilbertVille.” Lastly, Phase 5, emphasizes greater spontaneity in management action through team action for problem solving. Heilig explained, “The Google decision-making model breaks down if people are not collaborative—someone who is very opinionated has a hard time working here without getting frustrated. We do spend a lot of time coordinating with other functions.”
For a fast growing company as Google growing pains as “Should we focus on a specific high-growth segment?” or “Do we have the resources and capabilities to sustain the growth?” are a consistent challenge. Studies show the accelerating changes in the business environment requires companies to develop and deploy competencies faster. The triumvirate structure was possibly a limitation to growth.