Greiner's growth model: company development phases and the crises between them
Greiner's growth model describes how a growing company passes through periods of steady development punctuated by management crises. The article sets out the phases and crises according to Larry Greiner, shows how to diagnose the current phase with a worked numerical example, and covers the model's limitations.
Amounts and values in the examples are illustrative and show how the calculation works. In projects, we use the client's data.
Dominik Dębski · Lemur Media · · reading time: 4 min
Reviewed by Dominik Dębski, 1 November 2026
What is Greiner's growth model?
Greiner's growth model describes organisational development as a sequence of phases of evolution interrupted by crises (revolution). Larry E. Greiner presented it in the article "Evolution and Revolution as Organizations Grow" (Harvard Business Review, 1972).Each phase has a dominant management style that at some point stops being sufficient and triggers a crisis. Resolving the crisis opens the next phase. In 1998 HBR republished the article with a commentary by the author.
Which phases and crises does Greiner identify?
The original model comprises five phases of growth and four named crises. Greiner left the crisis ending the fifth phase open in 1972. In the table we have added symptoms observed in Polish companies and the corresponding phase in the Lemur Media Problem library.
| Growth phase | Crisis at the end of the phase | Typical symptom | Phase in the Problem library |
|---|---|---|---|
| 1. Creativity | Crisis of leadership | Founders cannot keep up with operational decisions | Creativity phase |
| 2. Direction | Crisis of autonomy | Middle managers wait for approval of minor decisions | Direction phase |
| 3. Delegation | Crisis of control | Departments pursue their own goals and head office loses sight of the whole | Delegation phase |
| 4. Coordination | Crisis of red tape | Procedures and reports slow decisions down | Coordination phase |
| 5. Collaboration | Left open in the 1972 version | No internal sources of further growth | Renewal phase (Greiner's fifth phase combined with the Adizes life-cycle model) |
In his 1998 commentary Greiner suggested that the fifth phase may end with the realisation that internal solutions, such as new products, will not deliver further growth. He proposed a possible sixth phase in which growth comes from external solutions: networks of alliances, holding structures and equity ties.
How do you diagnose the company's current phase?
A phase is recognised by where the decision bottlenecks arise; the official organisation chart matters less. A simple measurement is to collect one month's decisions and check who made them and how long the wait was.
| Indicator (company with 50–249 employees, one month) | Value | Calculation |
|---|---|---|
| Operational decisions escalated to the board | 60 | decision log |
| Of which made personally by the CEO | 45 | decision log |
| CEO's share of decisions | 75% | 45 ÷ 60 |
| Average wait for a CEO decision | 4 working days | decision log |
| Total waiting time in the month | 180 working days | 45 × 4 |
A high share of CEO decisions at 120 employees points to the end of the direction phase and a crisis of autonomy. The response is delegation with clear decision rights and budgets, followed by control mechanisms that will prevent the third-phase crisis.
How can the model be used in planning organisational change?
The model helps predict the next crisis and prepare a solution before the current management style stops working. According to Greiner, practices that work in one phase trigger the crisis in the next. That is why a plan for organisational change has two parts: resolving the current crisis and guarding against the next one.
| Current crisis | Solution | Risk in the next phase | Safeguard |
|---|---|---|---|
| Leadership | Professional operational management, clear split of founders' roles | Centralisation of decisions | Departmental budgets and decision thresholds |
| Autonomy | Delegation with decision rights | Loss of control over the whole | Shared company goals, management report, review cadence |
| Control | Coordination through shared systems and planning | Red tape | Annual review of procedures and their owners |
In practice, getting through a crisis takes from a few months to two years. A board that knows which phase the company is in can plan the recruitment of a second line of managers, a change to the reporting system and new decision rights in advance.
What are the model's limitations?
The model describes the typical direction of change; it does not predict when a crisis will occur or how long a phase will last. Limitations we take into account in our work with boards:
- Companies in fast-growing industries move through the phases faster and may experience two crises at once.
- Different parts of a company can be in different phases, e.g. sales in the direction phase and production in the coordination phase.
- Acquisitions and demergers move an organisation between phases without natural evolution.
- The model contains no financial indicators, so we combine it with an analysis of profitability and growth rate.
What are the common mistakes in applying the model?
- Introducing coordination-phase solutions (extensive procedures) in a company that has not yet gone through the crisis of autonomy.
- Treating a crisis as a management failure rather than a sign that the existing management style has run its course.
- Hiring directors without giving them decision rights and a budget.
- Diagnosing the phase from headcount without analysing the flow of decisions.