Hi-Tech Series: Chapter 8: The Business of Lifecycles

There are several stages to the business lifecycle. If you search for Business Lifecycle there will be sites with 7 stages, 5 stages, 4 stages but I am here to tell you there are only three. The typical lifecycle goes from Change to Containment followed by Consolidation. Any given company may get stuck at one stage and never move on while others go through the whole cycle every year. Every company has to go through the cycle sooner or later, like taxes. Technically there are 5 stages if you include birth and death but only the other three keep recurring in a never-ending loop.

Change is the first stage of the business lifecycle. If there is no change, there is no lifecycle. Change is always the result of some disruption that caused the change. We like to use the catch phrase Change Management but it is a contradiction in terms when management is all about stability and predictability while change is not. There was a time we tried to manage the change but now we accept that Change is in charge and we never will be able to manage it.

Here are some of the telltale signs that your company is suffering Change.

• Lower Standards: It’s much easier to change if you don’t have to follow the rules.
• Increased Budget: Change always costs lots of money.
• Increased Headcount: Someone has to take the blame. There is always plenty of blame to go around during change, and who better than new hires.
• Buying other Companies: Sooner or later there has to be a good one.
• Bad News: Scandals are inevitable.
• Good News: Here comes the microscope.

After a period of Change companies must evolve into the next stage; Containment. It should be obvious that this includes layoffs, reduced budgets and all the other money saving efforts of cost containment but it goes even further where they try to contain the workers and products from leaving. When things get bad companies will do anything to contain the disruption that caused the change. Contain the bad news… contain the competition… buyout the competition.

Another branch of the Containment bureaucracy is Reorganization aka; re-org. It can go by other names; retool, retrofit, right-size and smart-staff are some of the insulting euphemisms in current use but in the end it amounts to musical chairs. It can be as simple as a name change or a complete shake down. My computer services department has been moved from the original place in the Engineering department, to the HR group, then Facilities, then Financials and finally to the current location under the Operations department.

Finally comes Consolidation. If you didn’t die then you must be stronger. Things either get back to normal or you get bought out by some other company that is in another stage of the life cycle. Consolidation brings a period of stability that can lead to productivity and worst of all profitability. That’s just the kind of thing that can start the ball rolling again. If you are lucky enough to survive all the way through the lifecycle to the Consolidation stage then you know it’s only a matter of time until the Change will start again.