Companies age just like people
Updated: Feb 5
Companies, just like people, grow from startup or youth into middle age and finally to maturity in the later years.
Through these stages, both exhibit many similar characteristics.
As a stakeholder – employee, customer, supplier, or investor – this analogy may help you relate to the behavior and deliverables of companies during the different stages of their growth journey
Young companies – the time to lay foundations
In the early years, a company, like an individual, is bursting with energy. Ambition is high, as is the desire to grow. The sense of purpose and direction are still nascent and adaptable to new opportunities and directions which will help achieve growth and a path to future success.
As a stakeholder
Commensurate with their youth, both the individual and the organization have limited track records.
Both are in the process of building a place for themselves and a community of friends or customers/stakeholders who can help in making them successful and will demonstrate a high level of responsiveness and commitment to them.
Recognizing the limited history and depth of deliverables, stakeholders will engage carefully and assign low impact, low risk work – much of which may be pilots or trials.
Engage with these young entities for their energy, adaptability, and the personalized attention they offer, less so for depth of content or deliverables.
The middle years – time to build and grow
Mid-stage, age, or size companies, like mid age people, have been around a while.
Having explored and evaluated options during the journey to this point, choices have been made on where to invest time and energy. There is better clarity of direction and purpose.
At the same time there still is ambition and energy to grow by adding new competencies or streams of revenue (A certification or skill for an individual, a new market or line of business expansion for a company) – very likely related and synergistic to current areas of success.
This is the stage at which identity gets crystallized, both for individuals and companies. Who we are, what we do, who we serve, and where investments get made towards deeper specialization, skills, and relationships
As a stakeholder
By the middle years, both the individual and company have a track record of deliverables and behavior with stakeholders and a network of friends, customers, partners, or employees. On one hand, they have demonstrated competency in certain areas and the ability to deliver consistently on them, on the other they are still actively growing their abilities and offerings.
As a stakeholder, expect predictability in performance and the potential to engage in newer areas together.
The predictable performance fosters retention and the growing set of offerings aids expansion of relationships between stakeholders and the company/individual.
Relationships built at this stage are based on predictable performance by the individual or company and choices have been made on whom to engage and associate with. As a result, relationships made at this stage have the potential to be durable and long lasting.
As a stakeholder, as well as a company, this is an opportunity to make choices of who you want to grow with.
The later years – the time to reap or change
By the later years, individuals and companies have a long track record, associations, and a history of what they stand for, and do well.
The big spend and investments are likely behind them, and if resources have been managed well, there is a predictable and consistent surplus and cash flow
This more predictable / surplus cash flow provides the ability to experiment and make investments into new initiatives which will drive growth, or discretionary funding into innovation or social causes.
Companies and individuals comfortable with the choices made thus far and their current circumstance will nurture them, investing into current business streams and relationships to ensure a continuing healthy trajectory. Chances of doing something radical are harder. There is momentum, reputation, resources and relationships at risk. Change will be incremental.
Those less happy with choices and circumstances can take this as an opportunity for new beginnings. Organizations may re-look at their lines of business; divest those which are laggards and channel resources towards their better performing or emerging lines (think GE, Bombardier, AOL, and Microsoft). Similarly, an individual may look to move into a new line of work, entrepreneurship, an avocation which she or he always wanted to pursue, or away from inclement weather and put down roots in Florida!
As a stakeholder
With a longevity come expectations of consistent behavior and deliverables as well as high availability – almost akin to a utility
To be assured of this, stakeholders will want to see measures being taken towards continuity of high levels of predictability – quality initiatives, risk management, succession planning, and investments in robust infrastructure.
Both individuals and companies who can ensure and demonstrate this will earn trust and loyalty / retention of their key stakeholders. They will become the brands or utilities which become part of the lives of their stakeholders.
This trust and loyalty also fosters a greater willingness to take risks and co-innovate and joint experimentation. It is an opportunity to expand relationships with stakeholders – launch new products or services to them, develop partnerships for new initiatives, or an investment in a ranch in Montana with an old friend.
Both individuals and companies demonstrate similarities in behavior as they age - Energy and ambition in the younger years, crystallization of identity and deliverables in the middle ones, and the consistency and predictability in the later years.
As a stakeholder, relate to companies during their lifecycle as you would to people in a similar stage of their lives.
Engage with young companies (and people) for their energy and enthusiasm while expecting lesser depth and consistency. If you are looking for more predictability and yet the opportunity to grow together, the mid-stage companies and individuals may be the ones to build relationships with, and for high consistency and predictability of performance, the mature ones with a long track record
You may also want to read Change your deliverables as you gain experience