FIVE STAGES OF

ORGANIZATION EVOLUTION
AND KEY CHARACTERISTICS
AND CONCERNS AT EACH
STAGE
1. Concept Stage
• A new organization starts out as an idea, or Concept.
• A bona fide Concept requires at least a rough outline of:
• 1. What problem the organization is to solve for whom and how.
• 2. Some seed money to cover the cost of getting off the ground.
• 3. A Core Leadership Team that will bring the concept to reality.
Objectives in the Concept stage are to:
• 1. Prepare a description of the envisioned organization
• Whose problem it will solve and how it will solve it?
• How the organization will find, sell and serve customers?
• How revenue, cost of generating revenue, ad the cost of delivery and
support activities will generate, over time, financial stability and profit at
an increasing rate?
Objectives in the Concept stage are to:
• 2. Why it makes sense to bring the Concept to reality?
• Wealth creation
• Income generation
• Contribution
Objectives in the Concept stage are to:
• 3. Study existing and past organization
• 4. Organize a forum
• 5. Produce evidence
• 6. Make as much progress with as little outside funding as possible.
• 7. Establish a leader
2. Startup Stage
• The startup likely has a few customer and up to a few dozen employees
who are gaining confidence that what they do fills a genuine market need
where no other player dominates. On the other hand, survival is far from
guaranteed.
To stabilize operations sufficient to attract customers, employees, board
members, financing, and partners, leader develop a strategic plan and an
operating plan that includes:

• 1. Mission/purpose, vision and values.

• 2. Profit and Loss statement
• 3. Initiatives and success criteria
• 4. Key players
• 5. Board of outside directors
3. Credible Stage
• If a startup is about making a pizza, a Credible organization is about
building a pizza-making business. The agenda moves from getting things
done to building systems that get things done.
For example, the odds of long-term growth and profitability increase the
closer the organization holds to a proven business model; such as one of the
following five:

• Service
• Product
• Operations
• Channel
• Exchange
More specifically, a firm’s business model determines:

• The way its finances work

• Its sales and delivery processes.
• The competencies it needs to develop.
• The competitive landscape
• Its target valuation as a function of prospects for operating income as a
percent of revenue and growth.
• Exit alternatives, potential buyers, and timing.
• Expansion prospects and targets.
• The degree of risk and difficulty.
It is critical to determine the primary source of
revenue around which to increase the scale of
operations. While it may be possible to build multiple
revenue resources, it is hard enough to do well with
just one. It is best to scale multiple sources only after
at least one is on a solid track for success.
4. Sustainable Stage
• If a business does a few things right in its early stages of evolution, it can
markedly improve the odds of sustaining accelerated growth and
outstanding performance in future stages. Conversely, it is very difficult
for an organization to make critical adjustments to its operating
characteristics once it has achieved scale and maturity. Designing the
organization well in the startup stage improves attractiveness to all
stakeholders.
5. Mature Stage
Key concerns of a mature venture are:
• Continuing to perform
• Holding the attention
• Finding a new sources of growth