Organizations are like organisms in the sense that they have largely predictable life cycles. They are formed, they grow, they mature, and then they decline and possibly, die. There are a number of models that seek to explain the life cycle of organizations, and there are some differences among them.
However, it’s clear that companies change over time because of both external and internal factors. In this article, we propose a four-stage model in which success varies over time depending on the stage the organization is in. More specifically, we focus on what companies need to do to make the most of the Birth Stage in which they can launch a new chapter.
The Stages Organizations Go Through
The A stage is all about growth. Production and sales increase, and gross margins decline. The organization’s success goes from low to medium, and competition is likely to increase. As growth starts to plateau, the C stage starts.
It’s marked by change, chaos, and confusion due to multiple factors, including the fast pace of growth, decline, leadership changes, and market development. Perhaps most evident at this time, public health challenges such as a global pandemic can also throw companies off their growth path and into a state of confusion.
When an organization is in the C stage, the leaders are faced with a choice. They can either allow the organization to fall in the D stage that’s marked by decline, denial, death, and “the drift” or set out on a new path. The B stage is marked by the birth of a new chapter in which people find new ways of doing things, and instead of giving into doom and gloom, they develop positive attitudes. The organization undergoes a cultural shift that enables it to reach the highest levels of success.
Stage B involves embracing change at multiple levels. One of the things that most companies need to do is leverage the growing aging workforce. Many organizations have a large number of people sitting right below top management levels because there are only so many opportunities at the very top.
This “bulge” is usually made up of people who are in their late 40s and over. They’re often the most expensive, and they can cause lots of problems if they’re unhappy, unmotivated, and unproductive. There’s a lot to be gained by ensuring the people with the most knowledge, experience, and connection are happy and committed to the organization.
Making the Most of the B Stage
Given current demographic trends, companies seeking to reinvent themselves need to pay special attention to their mature employees. Let’s take a look at some of the things you should seriously consider.
Allocate a Larger Percentage of Your Training and Development Budget to the 45+ Age Group
Managers are often eager to train young employees. However, mature workers are more likely to stay with the organization for the long haul. The average age of the workforce is increasing because of both demographic trends and national policies designed to delay retirement. Having an engaged, productive workforce is now less about attracting skilled new hires and more about upgrading the skills of existing workers.
The economies in developed countries are becoming more and more knowledge-intensive with an emphasis on service-oriented jobs. Providing mature employees with training could help them to respond to the changing environment. Not only would they be able to avoid becoming obsolete, but they would be better able to adapt to ongoing organizational and technological changes. Upgrading the skills of older workers can help to reduce the potential negative effects of an aging workforce.
One of the threats to mature workers’ productivity is a decline in health, physical strength, and cognitive decline. This isn’t to say that these workers can’t continue to make a significant contribution to your organization or that all 50-plus employees are in a stage of decline.
However, there are changes that come with age, and training and re-training could help to counteract them. If mature workers don’t get the training they need, not only could their individual employability be reduced, but the economy could also suffer a decline. This is because the average age of the workforce is steadily increasing.
Build Intergenerational Teams to Ensure Experience Is Paired With Energy
Many people will continue working into their 60s and even 70s. This means that some organizations will have employees spanning five generations. Each generation has something different to offer, so it’s important to build teams with people of all ages. Older people have wisdom and life experience that younger people lack, but younger workers bring fresh approaches, creativity and lots of energy. By combining various philosophies and approaches, you’ll be able to come up with more innovative ideas.
Some of the benefits of leveraging intergenerational teams include:
- Providing opportunities for employees to learn from each other. Contrary to what many people believe, it’s not just younger employees who have a lot to learn. Employees of all ages can teach each other new ways of approaching tasks or doing business. An older employer would probably benefit from a younger worker teaching them how to automate tasks. At the same time, the younger employee could learn about interpersonal skills or how to deal with office politics.
- Generating unique solutions to problems. Every generation tends to approach problem-solving in a different way. Generally, mature workers will prefer tried and true methods while younger people would be more willing to think outside the box. Embracing a multigenerational workforce can help your organization to find new ways to deal with common problems.
- Gaining an understanding of different demographics. If you have people of all ages in your organization, you can get feedback from multiple audiences before you take a product or service to market. Often, companies assume they know what their target market wants. By seeking guidance from your in-house team, you’ll get a better understanding of what each generation wants.
Create Policies and Systems That Benefit Everyone in the Organization
Employees want to know that their employers will take reasonable steps to ensure they’re happy. By implementing policies and systems that benefit people of all ages, you’ll become a more attractive employer. Often, organizational leaders find it challenging to keep so many different people happy. However, there are things you can do to make the process easier.
- Understanding what employees want from their careers. People value different things as they get older. While everyone wants to be treated well and paid fairly, they put different amounts of emphasis on other factors such as organizational culture, company values, and opportunities for promotion.
- Offering flexible working options. This is an inexpensive way to meet the needs of people of all ages. To be sure that it’s something people at your company want, you can conduct a survey to gauge interest. However, most people will appreciate an opportunity to better balance their careers and their personal lives.
- Building an inclusive company culture. This can help to promote age diversity in the organization. One of the first things you need to focus on is communication since this affects morale and camaraderie. Try to communicate with each employee via their preferred method. Some workers will want a phone call or an email. Others will be fine with a text message. The more readily available information is, the better it will be for workers and the company as a whole.
- Holding social events that appeal to everyone. If not planned correctly, company events can isolate some employees. If you’re hosting a holiday party or team-building event, you should think carefully about the location, activities, menu, and music.
- Provide training on age discrimination in the workplace. Many people have age-related biases that they may not even be aware of. If you want to build an inclusive workforce, you should educate your employees about what age discrimination looks like and teach them how to treat everyone professionally regardless of their age. Make sure that you offer the same training opportunities to all employees.
Help Employees to Find Meaning and Purpose in Their Work
One of the biggest contributors to employee performance is feeling a sense of purpose. Workers of all ages want to know that their work matters, but this may be especially important to millennials. Employees who are driven by a sense of purpose are likely to be more engaged. Their performance levels are higher, and they’re more productive. These workers are also more likely to be satisfied with their jobs.
You’ll need to show employees how their work contributes to the larger picture. One way to do this is to provide positive feedback. This indicates that the individual’s contribution is noticed and valued. If customers or clients give the company a positive review, pass this on to the team members who were involved. This will inspire them and help them to see what they’re helping other people.
The Role of Training and Professional Development
We’ve touched on training before,, but it’s also important here. Employees want to know that they matter to the organization to the extent that leaders are willing to invest in their personal development. Younger people are more likely to be selected for training. However, you need to invest in the education of all your employees including those in the 50-plus age group.
Otherwise, mature workers can feel unappreciated, and this leads to reduced morale. It can also cause “the drift” to set in. This is when employees become so demotivated that their performance suffers, and they eventually leave the organization. Given all that mature employees have to offer their employers, you want to avoid driving them away. Remember, the B stage is all about birthing something new.
Regardless of age, well-trained employees are more innovative and more likely to take on challenges. This is because they feel more confident in their abilities. Developing a culture of learning and making the necessary investments is important if you want the organization to emerge stronger and poised for the highest levels of success.
Moving Workers from the “Bulge” to the Boardroom
Often, when organizations have big problems to solve, they hire external consultants. They do so while overlooking the insights that their most experienced workers have, and in doing so, they incur avoidable expenses. Experienced employees have lots of knowledge about your organization and industry, especially if they have been with the company for decades. They have insights that people outside the organization may not have despite their qualifications or fancy titles.
Creating a Company for the Future
If your organization is in the chaos stage, you need to make the hard decisions that will get you to stage B rather than D. In light of the ongoing COVID-19 pandemic, many businesses are dealing with change and confusion. Even though there’s lots of uncertainty in the world today, you can plan for the future.
Keys to A Future-Focused Organization
One article published by McKinsey & Company offers some useful insights. The authors note that while the pandemic has resulted in the need for change, the pressure has been building for some time. They posit that many companies were structured for a standardized and predictable world that’s disappearing. Organizations have long been bureaucratic, slow, and stuck in complex structures. Today, Aaron De Smet, Chris Gagnon, and Elizabeth Mygatt argue that
four trends have changed the game:
- Changing demographics
- Reduced transaction costs
- Increased automation
- Greater connectivity
The authors point out that “companies everywhere are recognizing that the pandemic offers a once-in-a-generation opportunity for change.” Drawing on their own experience and the practices of 30 companies, they suggested nine imperatives for companies:
- Taking a stance on corporate purpose
- Having a clear value agenda
- Fostering a strong company culture
- Simplifying organizational structure
- Making decisions quickly
- Seeing talent as scarcer than capital
- Building partnerships and taking an ecosystem view
- Making the most of data
- Promoting continuous learning
Getting Started on Organizational Transformation
Consulting firm Deloitte made some suggestions for companies seeking success in an age of disruption. They noted that recognizing the need for change is only part of the battle. Knowing exactly what to do is another matter.
Deloitte suggests that organizations need two things to adapt to meet future demands. These are:
- A business model that can respond nimbly to needs as they emerge.
- An organizational culture that helps employees to work, innovate, learn and lead no matter what the market conditions are.
This may sound like a complex undertaking, especially since Deloitte recommends that both the business model and the organizational culture be addressed at the same time. However, the company recommends approaching it as a journey along which changes can be made as the need arises.
Deloitte advises companies to think big, start small and then scale responsibly.
Before you can make any changes, you need to have a clear vision. This involves setting goals, looking for new market opportunities, and creating a vision statement that reflects what your future organization should look like. It’s important to keep in mind that the goals don’t need to be realistic. They can be big and risky since, at this point, you’re not taking action. You’re simply getting into the habit of being more bold and creative than you have in the past.
When you have a clear idea of the type of organization you want in the future, you can begin the transformation. Deloitte recommends throwing your team in at the deep end rather than trying to teach them how to be creative. You should choose a project that large enough to be impactful but small enough that it doesn’t get bogged down in red tape. What fits within these parameters will vary from one organization to another. However, the aim is to get your employees thinking and solving problems in a new way.
Once you start implementing changes, there will likely be a temptation to go back to what you’ve always done. That’s why you need to set standards for how you will scale initiative and have a timeline for what needs to be done and by whom. You also need to have a strong leader in charge of the process.
Although you’ll be embarking on a new journey, you shouldn’t forget everything you already know about change management. Your organization is made up of people who vary in age, background, education, and more, and some may be resistant to change. However, buy-in will be essential if you want to build an organization of the future.
Get Help in Making Your Organization Future-Ready
The world is changing rapidly, and organizations need to be transformed accordingly. Modernizing a business is a process, and the sooner you get started, the better it will be for you. You don’t want your business to die when it could be succeeding at previously unforeseen levels. If you want help in building an organization that leverages demographic and organizational trends, contact WiseForce at email@example.com for a consultation.