5 Phases of Growth and Development in every business

The idea of a similarity between an organisation and a living organism goes way back.

From as early as 1890 an economist by the name of Alfred Marshall compared companies with trees in the forest in terms of their development.  Decades later others compared the life cycle of an organisation to the same life cycle as a living organism – birth, growth, decline and death.  Amazingly for 120 years research has been carried out on the life cycle of organisations coming up with an impressive variety of analysis.

In the 1970’s Larry Greiner, an Associate Professor of Organisational Behaviour at the Harvard Business School, added a perspective to the development of a company.  He said that a company’s past has clues for management that are critical to future success.  I studied his material while doing my MBA at Management School and it left a lasting impression on me.

Greiner maintained that a company that is growing will move through 5 distinguishable and predictable phases of development each of which contains a relatively calm period of growth that ends with a management crisis.

He argues that since each phase is strongly influenced by the previous one, management with a sense of its firm’s history can anticipate and prepare for the next developmental crisis.  As a consequence he believed that management can prepare to turn a crisis into an opportunity for growth and development.

According to Larry G the 5 phases of growth in an organisation are indicated by an ‘evolutionary’ and subsequently a ‘revolutionary’ phase.

By ‘evolution‘ he was referring to an extended period of expansion with little or no significant disruptions.  By a ‘revolution‘ phase he was referring to a period of considerable disturbance within a company.

It is this theory on which he bases his view that historical forces do indeed shape the future growth of organisations.  He thinks that many clues to a company’s future success lie within their own company and their evolving states of development.

In addition he also thinks that the inability of management to understand its own firms development problems can result in a firm becoming “frozen” in its present stage of evolution or ultimately in failure.

Larry G argues that each evolutionary period is characterised by a dominant management style used to achieve growth, while each revolutionary period is characterised by the dominant management problem that must be solved before growth can continue.

His big play is that the future of a company may be less determined by outside forces than it is by the organisations history.  He based this on what he has drawn from the legacies of European psychologists – their thesis being that individual behaviour is determined primarily by previous events and experiences, not by what lies ahead.

Unpacking this analogy of individual development to the problems of organisational development leads him to describe a series of developmental phases through which growing companies tend to pass.

The table below outlines his 5 Phases:

5 Phases Evolution Revolution
Phase 1 Growth through creativity Crisis of leadership
Phase 2 Growth through direction Crisis of autonomy
Phase 3 Growth through delegation Crisis of control
Phase 4 Growth through coordination Crisis of red tape
Phase 5 Growth through collaboration Crisis of ?

Below is a an exhibit from his paper which illustrates the above table:

He also exhibits (see below) an overview of organisational practices during evolution in the 5 phases of growth:

I know that all this business theory from management schools can turn people off rather than switch them on.  I get that.  However, there is something in this study that resonates with my experience of the businesses I’ve either been a part of or had the privilege of advising.  Businesses do have periods of evolution followed by revolution – check out your own.  You can see from practices illustrated above a mirror on so many owner managed businesses.  Check out focus, structure, management style as it’s outlined above and compare and contrast it with your own business and current management style.

Anyway, this is just meant to be a thought shaker and help us in gaining a fresh perspective on our business.  It’s not meant to be a full blooded outline of Larry G’s theory of growth and development.

Perspective is everything.  Check out Julian Beever’s 3D Pavement Drawings below to ‘see’.  I hope this short thought shaker might be a little bit like Julian Beever’s amazing 3D drawings – arresting, altering and shifts your thinking for a moment:

Perhaps your perspective on the 5 phases just might shift a little!

Tom Bathgate MBA

Minimum Contributions Increase On 6th April

Employer Duties Regarding Workplace Pensions in the New Tax Year

By law, the total minimum contributions you must pay into your staff’s workplace pension schemes increase on 6 April 2019.

You do need to be ready for this increase, to make sure you are paying the correct amounts into your staff’s schemes.

Are You Ready?

From 6 April, the total minimum contribution including employer and employee payments must be no less than 8% of qualifying earnings.

Employers must pay a minimum of 3%, with employees making up the rest of the 8%.

You can choose to pay more than their 3% minimum contribution if you wish. If you do, employees won’t need to pay in as much to meet the total minimum contribution of 8% of qualifying earnings.

Date effective Total minimum contribution Employer minimum contribution Staff contribute the remainder

Current rates

5% 2%

Up to 3%

6 April 2019 8% 3% Up to 5%

Next steps

– It should be simple for the new rates to be applied, particularly if you use our   payroll service as our payroll software service providers have made sure their systems are ready

– We recommend that employers write to their staff to let them know about the increase in contributions – letter templates are available from The Pensions Regulator website.

If you are unsure call us on 0161 703 8353 and ask for Christine McCarthy.

If you would like us to do your payroll for you please get in touch with Christine McCarthy on: christine.mccarthy@jeffreyahuddart.co.uk

If you would like to write to us with your questions and any concerns drop us an email on: hello@jeffreyahuddart.co.uk

 

 

Tom Bathgate MBA

 

 

Your Breakthrough Move To Making Tax Digital

Making Tax Digital (MTD) is one of the biggest shake ups since the introduction of Self-Assessment in the 1990s in terms of how businesses MUST interact with HMRC.

In a nutshell MTD mandates that businesses will HAVE to use some form of compatible, functional, DIGITAL tool to SUBMIT financial information TO HMRC on a regular basis.

In Just 7 Days we will all be in a new tax year and ‘Oh My God’ I read recently that apparently less than 10% of companies in the North West are MTD ready.

I’ll get right to the point. First to be impacted are VAT registered businesses that have turnover ABOVE the VAT registration threshold currently of £85,000 and commences for VAT periods starting on or after 1 April 2019.

So unless you already really know what you are doing with your VAT returns and are most definitely using accounting software which is MTD ready and fired up, YOU Need a Breakthrough Move to get your business ready for a pain free way of getting your VAT returns immediately MTD compliant and here’s the quick and easy way to do just that:

1  Call Us Now on 0161 703 8353 and ask for Andrea Parr or Charles Lucas or

2  Email Us Now on hello@jeffreyahuddart.co.uk

As soon as we hear from you can expect us to advise you on how you can get ready, what accounting software is MTD ready, and how we can help make it all happen.

PS: don’t risk being late with your VAT returns this new tax year

Tom Bathgate MBA

SumUP – we can now accept credit card payments

I’m pleased to announce that following a number of requests from clients we are now able (at our office) to accept credit card payments should clients wish to pay this way.

Below is a picture of the card machine we are using:

SumUp are a leading mobile point-of-sale (mPOS) company in Europe. They say this about themselves on their website:

“We started out 6 years ago and built our payment service from scratch to shake up the industry and wake up the entrepreneur within anyone. We created a unique device that with the smartphone that’s in your pocket, allows small merchants to accept card payments anywhere.

Whether our merchants are brewing coffee or fixing cars, we want to make technology that anyone can use – so our merchants can get on with what they do best. From our paperless onboarding to taking the first payment, we make it easy. Traditional offerings leave out small businesses, we don’t. We are open and honest about our pricing and have no hidden fees.

Launched in August 2012, our company enjoys impressive global reach and has since expanded into 31 countries, including Germany, the U.S. and Brazil. SumUp continues to grow and is backed by American Express, BBVA, Groupon, Holtzbrinck Ventures and other renowned venture capital investors.

Today, hundreds of thousands of small businesses around the world rely on SumUp to get paid. Beyond our original hardware, mobile and web apps, we have gone on to develop a suite of APIs and SDKs for integrating SumUp payment into other apps and services.”

If you are thinking about possibly using one for your business then some Key points to be aware of are:

No fixed costs

Only pay 1.69% per transaction. Payouts go directly into your bank account.

Accept all debit & credit cards

Connects via Bluetooth. Compatible with iOS / Android smartphones and tablets.

Signup in 5 minutes

100% online. No fixed contract. No paperwork.

Check out their website by clicking on the link below:

https://sumup.co.uk/

Tom Bathgate MBA
Broadthunder Accounting Limited

We are officially ready for Making Tax Digital with Xero Accounting Software!

We are officially ready for Making Tax Digital with Xero.  HMRC is Making Tax Digital from April 2019 and we are ready.  Want to know how we can help you prepare for HMRC’s new VAT rules? Just ask. Get in touch via the contact page of phone us and ask for Andrea Parr.

Phone: 0161 703 8353

Email: andrea.parr@jeffreyahuddart.co.uk

 

 

Tom Bathgate MBA
For and on behalf of Broadthunder Accounting Limited