An organization develops by stages with periods of growth alternating with periods of transition in which the basic organizing principle changes. The stages of organizational development are shown in the table below. The Managerial types characterize typical managerial behavior and Organizing Principles represent the growth capacities characteristic of each stage of development.

If an organization is in a growth phase and not in a transition phase between two stages of development, fostering the growth of the organization requires activity focused on the Organizing Principle associated with that particular stage. This principle is highlighted in the examples given below.

Stage 2: Investment

An organization at the Investment stage needs to foster its ability to attract customers and investors. Those activities that will generate interest in the organization, that make it “attractive” to outside parties will be those activities that maximize growth at this stage.

Stage 3: Incorporation

The challenges at Stage 3 are related to how well an organization can distinguish itself from others that are pursuing the same market or goals. The originality of the founding idea is gone and the organization to compete against others must adopt some form of customer-centric value proposition that can continue to create growth.

Developmental Stages

Stage 1: Conception

New beginnings require enormous energy and commitment. The founding idea must be compelling enough to carry everyone through the initial trials of the conception and birth process. In a start-up organization everything must be done at once and basic systems are far down the list of concerns.

Stage 4: Structural Redesign

The transition to Stage 4 occurs when the original structure chosen for the organization begins to break down, usually through being strained past its natural limits. Various special project teams are created to handle problem areas. Teamwork as a whole becomes more important. Various organizational structures are tried until forward momentum can be reestablished and effective delivery of products and services is enhanced.

Stage 5: Systematic Productivity

The transition to Stage 5 occurs when an organizational structure can be optimized for efficient production and meets an ongoing set of market needs. The organization grows to include a business unit structure with management and information systems providing overall coordination.

Most of our multi-national organizations moved into this stage of development during the 20th century and they are only just now moving on to the next stage.

Stage 6: Collaborative Development

Companies at Stage 6 focus on the issues of quality, legitimacy and alignment: “Why do we want these results? Are they worth it? How do we work with customers and suppliers to increase value and reduce costs for everyone?” New forms of cross-functional teams create service efficiencies that are unmatched by the large functional organizations of Stage 5.

Stage 7: Foundational Community

The transition to Stage 7 is rare and usually invisible. Whenever a powerful social/spiritual vision is articulated and efforts begun to put it into practice, we begin to see the possibilities of a Foundational Community. Dr. Martin Luther King: “I have a dream. . .” and John F. Kennedy: “A man on the moon by the end of the decade” are good examples. Usually the vision can be stated simply and is easily understood, even if not easily enacted or realized.

Stage 8: Spiritual Disciplines

The transition to Stage 8 occurs when a Foundational Community sees part of its task as working in the world for the development of the world. The community itself may seem to disappear and only individuals carrying certain missions are visible. These missions are focused on transformation: individual, organiza-tional and social. In the background a fundamental spiritual orientation and path of development can be found.

New possibilities become available through the work of these individuals. A new opening for human development is realized through efforts that in retrospect are seen as breakthroughs. Such breakthroughs are the path and goal for the individuals that work at this stage. Generativity is their call to action.

*Adapted from William Torbert, Creating a Community of Inquiry, 1976, and Managing the Corporate Dream, 1986