The Greiner Curve

The Greiner Curve is a Tool that guides Companies in their Growth Stages based on their Size.

• Its name comes from the person who created it: Larry Greiner.

 

It describes 6 Stages of Growth and What makes a Company Grow in each one of them.

• Depending on the Size of the Company, it proposes what must be guaranteed to Grow.

1. Creativity: In this Initial Stage Companies Grow thanks to their “Differential Factor”.

• What makes them Unique.

 

2. Direction: In the Second Stage, Companies need good Direction if they want to Grow.

• “Creativity” must be Managed properly.

 

3. Delegation: The original founders and Directors must Delegate some of their tasks.

• As the Company Grows, the original Team needs help.

 

4. Coordination: The different Departments must Coordinate their Actions properly.

• The Company needs to start working as a single Entity.

 

5. Collaboration: The Company creates Synergies thanks to internal Collaboration.

• The different Departments and Managers need to take care of each other.

 

6. Alliances: The Company Grows by establishing Alliances with other Companies.

• By setting common Goals, the Company may achieve profitable Partnerships.

Stages of the Greiner Curve

 

Let’s see the first example:

 

We think it is interesting to analyze the Video-Game Industry.

 

In the 1990s, a group of (very talented) friends developed what became one of the best video games ever:

• Doom.

 

They were young and intelligent and achieved a very important Milestone.

• They coded an awesome game that could be run in any PC.

 

Thanks to their Creativity (coding and designing the game) they could found their own Company:

• Id Software.

 

Nowadays, that is unthinkable:

• Video-Game Companies have grow enormously and become much more professionalized.

 

Now, Id Software belongs to Bethesda, and Bethesda to Microsoft.

 

This Company established important Alliances to continue offering some of the best games.

• Not only with Microsoft but with Hardware developers, Software companies, etc.

 

The result?

Well, their games now look a “little” more impressive:

“Doom Eternal” Gameplay.

Before looking at more examples, we want to highlight a very important moment in the Growth of a Company:

• The Red Tape Crisis.

 

What is this?

 

In English, Red Tape is an expression that means “too many bureaucracy procedures”.

 

As the Company Grows and “professionalizes” it introduces protocols, standardized procedures, etc.

• It can’t continue to operate as if it were still a small Business.

 

These Procedures (Red Tape) shouldn’t harm the Performance of the Company.

 

That is called the Red Tape Crisis and can take place between the 4th and 5th Stages of Growth.

• Between Coordination and Collaboration Stages.

The best way to understand the Greiner Curve and how you can use it is by sharing some examples with you:

Now, let’s analyze some challenges that 3 Tech Companies faced while Growing up.

• As Technology companies have been forced to Grow enormously very fast, they are interesting examples to analyze.

 

Let’s begin:

 

Microsoft is a very interesting example.

 

In the 80’s the Software Market was born and (as in the example we mentioned earlier about Doom) Creativity was much more important than Money since… There was nothing to buy.

• Software companies didn’t even exists.

 

Bill Gates created MS-DOS: An Operating System that allowed people interact with their Computers in an “easy way”.

 

But… How Microsoft became so Successful?

• They Partnered with IBM.

 

IBM was the King of Hardware and offered Microsoft an Alliance:

• All their Computers would have MS-DOS pre-installed.

But they would pay Microsoft… Zero dollars.

 

Seems a bad deal?

• All IBM Competitors had to install MS-DOS to make their Documents compatible with IBM’s.

And, o course, they had to pay for it.

 

Eventually, IBM fell, but Microsoft is still the king of Operating Systems.

 

We all know the origins of Apple:

• Steve Jobs and Wozniak in a garage, etc.

 

However, there are 2 important moments in Apple’s history that people don’t know much about:

• Its Red Tape Crisis while growing up.
• Its successful Alliances.

 

Apple’s Red Tape Crisis

 

When Apple was getting bigger, Steve Jobs hired a top Manager with experience in Large Corporations:

• John Sculley: Former President of PepsiCo.

 

The problem was that John was used to a very methodical environment with a rigid Management style.

• Pepsi was famous for its “hard” managing style at that time.

 

And that didn’t work very good in a Company like Apple.

• A Company based on Creative and innovative Products.

 

John Coordinated the Company very well, but the Internal Collaboration suffered.

• The Methods and Procedures jeopardized its Creativity.

 

Apple’s Alliances

 

One of the smartest alliances Apple made that allowed the launch of the iPhone was with Samsung.

• Samsung is the company that initially developed the screen of the iPhone.

 

But, years later, they (Samsung) decided to develop their own Smartphone.

 

In addition, Apple became very successful thanks to its subtle Alliance with “Programmers“.

• Thanks to the App-Store, programmers around the World were able to sell their products easily.

 

Google was, once, just a Search Engine. Nothing more.

 

Today, it is a:

• Navigation system.
• Cloud Storage alternative.
• e-Mail platform.
• Video-Conference tool.
• …
• And, the best Web Browser available.

 

To become so big and successful, Google has had to guarantee excellent Collaboration and Coordination of its different Teams.

 

At the beginning, their Creative algorithm allowed them to increase its popularity and Grow.

 

But, as years went by, they had to establish “Alliances” in order to maintain their Growth.

What Alliances?

• Apple’s iPhone has Google as the default Search Engine on its Safari Web Browser.
• Android Operative System use Google Applications.
• Samsung mobiles (use Android O.S) have Google also as their default Search Engine.
• etc.

 

We could say that Google is trying to do what Microsoft did (in Operating systems) but with online Applications.

The Greiner Curve is a Tool that guides Companies in their Growth Stages based on their Size.

 

It describes 6 Stages of Growth and What makes a Company Grow in each one of them:

1. Creativity: Companies Grow thanks to their “Differential Factor”.
2. Direction: Companies need good Direction if they want to Grow.
3. Delegation: The original founders and Directors must Delegate some of their tasks.
4. Coordination: The different Departments must Coordinate their Actions properly.
5. Collaboration: The Company creates Synergies thanks to internal Collaboration.
6. Alliances: The Company Grows by establishing Alliances with other Companies.