Go-Go stage of the organizational Lifecycle

An organization will emerge from Infancy and move into the next stage of the organizational Lifecycle where cash and activities become somewhat stabilized. The negative cash flow and the need for cash infusions are not bothering much. Customers start bringing repeat business, there is some brand loyalty, suppliers stabilize and operation problems are no longer a daily crisis. The founder finally has time to breathe. Once this stabilization occurs, the Infant organization moves into the next stage which is called Go-Go.

What is Go-Go organization? First an Idea (courtship stage), then in Infancy the idea was put to work. Now, reached a stage where the idea is working. The company has overcome negative cash flow and sales are up. Seems that it is not only surviving, it’s flourishing. This makes the founder and the organization intoxicated.

The greater the success, the more intoxicated the founder becomes. Sometimes he starts believing she/he is invincible. As a result, Go-Gos usually get into trouble by going in too many directions at the same time. They see no problems/challenges – every opportunity is a priority.

On Friday night, the founder of a Go-Go company, a shoe business, goes away for the weekend. On Monday morning, she/he walks into the office and announces: I just bought a shopping centre. No surprises for employees- it has happened before.

“The Real Estate business? How did we get into that?”

‘’Well, I got a deal that was too good to pass up. Besides, what we did for the shoe business, we can do for real estate!’’

Present success has made the founder forget challenges of Infancy era. The success of the Go-Go is the realization of the founder’s dreams; and if one dream can be realized, why not other dreams, too? They become like mini-conglomerates; they tend to be involved in many related and unrelated businesses. Unfortunately, this diversification usually means that Go-Go are spread too thin. They inevitably make the mistake of being in a business about which they know nothing. The company loose money overnight on a shopping centre, than they made in a whole year in shoe business. Almost every opportunity seems to be the priority. Too many priorities mean they have no priority.

In the Go-Go stage, sales are up fast and easy, so the founder becomes sloppy in her/his investments. She/he does not plan for results – she/he just expects them. Frequently she/he will have to pay the price.

There is a vision to begin with (courtship), followed by experimentation with the vision (in infancy stage), thus a product orientation. Once the experimentation is completed, in Go-Go, the organization moves to a sales orientation. This sales orientation can have abnormal outcomes. Go-Gos assume fixed profit margin on sales, thus believing more sales means more profits – as a matter of fact, they might be losing money. For increasing sales, they give discounts to channels, commission to sales personnel, and rebate to clients – cost of goods sold becomes higher than sales.


Conflict and Inconsistencies

  • An “”us versus them” mentality – old timers against new comers
  • Inconsistency in organizational goals
  • Inconsistency in incentive and compensation system

Why this happens?

  • Delegation of authority – founder’s willingness to delegate
  • Change of Leadership – from entrepreneurship to professional management
  • Goal displacement

Are you in a Go-Go stage? We at Pathfinders, are meeting regularly with our clients for finding ways of smooth transition from Go-Go stage to Adolescence. Why not join us – write to me: suresh@mypathways.net or better call me on #097439495
Suresh Shah, M.D., Pathfinders Enterprise

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