People Feel That There Are Not Enough Hours in the Day

One of the most common organizational growing pains is the complaint that there is never enough time. Employees feel that they could work twenty-four hours per day, seven days a week, and still not have sufficient time to get everything done. They begin to complain about overload and excessive stress. Both individuals and departments feel that they are always trying to catch up but never succeeding. The more work they do, the more there seems to be, resulting in a never-ending cycle. People feel as if they are on a treadmill.

The effects of these feelings can be far-reaching. First, employees' belief that they are being needlessly overworked may bring on morale problems. Complaints may increase. Second, employees may begin to experience physical illnesses brought on by excessive stress. These psychological and physical problems may lead to increased absenteeism, which can decrease the company's productivity. Finally, employees may simply decide that they can no longer operate under these conditions and may leave the organization. This will result in significant turnover and replacement costs related to recruiting, selecting, and training new people.

When many employees feel that there is not enough time in the day, usually no one is suffering more from this than the company's founding entrepreneur (if he or she is still present). The entrepreneur, feeling ultimately responsible for the company's success, may work sixteen hours a day, seven days a week in an effort to keep the company operating effectively and help it grow. As the organization grows, the entrepreneur begins to notice that he or she can no longer exercise complete control over its functioning. This realization can result in a great deal of personal stress.

The presence of this growing pain can suggest that the company lacks or has an underdeveloped planning system, that there is a lack of a formal structure (in which roles and responsibilities are clearly defined), or that individuals do not understand how to effectively manage their time. It might also suggest that the company does not have enough of the right resources to support current and anticipated future operations or that its operational systems are underdeveloped.

People Spend Too Much Time “Putting Out Fires”

A second common growing pain shows itself in excessive time spent dealing with short-term crises. This problem usually results from a lack of long-range planning and, typically, the absence of a strategic plan. Underdeveloped or weak operational systems can also contribute to this growing pain. For example, when these systems do not produce the accurate and timely information managers need to make decisions, there may be a number of “fires to fight.” This growing pain can also result from the tendency to hold on to a culture that rewards fire fighters, rather than planners. Individual employees and the organization as a whole live from day to day never knowing what to expect. The result may be a loss of organizational productivity, effectiveness, and efficiency.

Examples of the putting-out-fires problem are easy to find. In one $10 million service firm, a lack of planning caused orders to be needlessly rushed, resulting in excessive pressure on employees. Drivers had to be hired on weekends and evenings to deliver orders, some of which were already overdue. At one residential real estate company, lack of planning resulted in shortages of salespeople. Because of these shortages, the company was forced to hire new people and put them to work almost immediately, sometimes without adequate training. This, in turn, contributed to short-term productivity problems because the new people did not possess the skills necessary to be good salespeople. The lack of personnel planning in a $100 million manufacturing company also created problems but for different reasons. There, personnel were hired to take up the slack when business was good. Once the crisis was over, the company found it had a number of people it simply did not know what to do with.

Fires were so prevalent at one $75 million manufacturing company that managers began to refer to themselves as fire fighters, and senior management rewarded middle management for their skill in handling crises. When it became apparent that managers who had been effective in “fire prevention” were being ignored, some of them became “arsonists” to get senior management's attention. The arsonists set fires that could be fought as a way of showing that they were contributing to the organization.

Many People Are Not Aware of What Others Are Doing

People are increasingly unaware of the exact nature of their jobs and how these jobs relate to those of others. This creates a situation in which people and departments do whatever they want to do and say that the remaining tasks are “not our responsibility.” Constant bickering between people and departments over responsibility may ensue. The organization may become a group of isolated and sometimes warring factions.

These problems typically result from the lack of a formalized structure, including an organization chart and well-defined roles and responsibilities. Relationships between people and between departments, as well as individual responsibilities, may be unclear. People can become frustrated by this ambiguity and begin creating their own definitions of their roles, which may not always be in the company's best interests. The president of one of our clients vividly described this phenomenon when he said, “We were a collection of little offices working toward our goals without consideration for the good of the company.”

The isolation of departments from one another may result in duplication of effort or in tasks that remain incomplete because they are “someone else's responsibility.” Constant arguments between departments may also occur over territory and organizational resources. This was a problem at a large technology company where there were eighteen different divisions, each focusing on its own product line to the exclusion of the overall corporate goals. Even as product lines evolved and began to overlap, the salesforce continued to focus only on its own line to the exclusion of others. This resulted in some customers being called on by three or more salespeople, each representing a different product group and sometimes even offering similar services for different prices. In essence, the company competed against itself. Ultimately, the company lost control of its own destiny and was acquired by one of its competitors.

People Lack an Understanding About Where the Company Is Headed

Employees may complain that “the company has no identity” and either blame upper management for not providing enough information about the company's future direction or, worse, believe that not even upper management knows what that direction will be. This can result from the inability of senior management to agree about the company's future direction or can be due to a communication breakdown.

When insufficient communication is combined with rapid changes, as is often the case in growing enterprises, employees may begin to feel anxious. To relieve this anxiety, they may either create their own networks for obtaining the desired information or come to believe that they know the company's direction, even though management has not actually communicated this information. In one company, employees' speculations, as well as real information obtained from people who were close to senior management, circulated freely on the company's grapevine. Rumors were rampant, but in fact very few people really knew why certain changes were being made. Hence, employees experienced a significant amount of anxiety. If anxiety increases to the point where it becomes unbearable, employees may begin leaving the company. It should be noted that turnover of this kind can be very costly to an organization.²

The primary factor underlying this growing pain tends to be inadequate strategic planning. Either the organization has an inadequate or underdeveloped planning process, or plans that are made are not effectively communicated throughout the organization.

There Are Too Few “Good” Managers

Although a business may have a significant number of people who hold the title of “manager,” it may not have many good managers. Managers may complain that they have responsibility but no authority. Employees may complain about the lack of direction or feedback that their managers provide. The organization may notice that some of its divisions or departments have significantly higher or lower productivity than others. It may also be plagued by managers who constantly complain that they do not have time to focus on managing their team or their department because they have too much technical work to do. When any or all of these events occur, something is wrong with the management function of the organization.

Problems like these suggest that the company has not adequately defined managers' roles or is not providing sufficient training to ensure that those in these roles have the skills needed to effectively fulfill them. If there are unclear role descriptions, those in management positions may not understand what they are expected to do. In an effort to “do something,” these individuals may revert to re-creating their old roles—focusing too much attention on doing work, rather than managing it. If training exists, the company may be relying too much on on-the-job training rather than on formal management development programs. In some companies, this on-the-job training is carried to such an extreme that companies literally or figuratively walk the new manager to his or her office and say, “Here's your department. Run it.”

Management problems may also result from real or perceived organizational constraints that restrict a manager's authority. In one company, the perception that only top management could make decisions greatly affected lower-level managers' effectiveness. One person at this firm described the managers as “people with no real responsibility.” The feeling that only upper management has decision-making responsibility is common in organizations making the transition to professional management. It is a relic from the days when the founding entrepreneur made all decisions.

Everyone Feels “I Have to Do It Myself if I Want to Get It Done Correctly”

Increasingly, as people become frustrated by the difficulty of getting things done in an organization, they come to feel that to get something done, they have to do it themselves. The underlying cause of this growing pain is typically a lack of clearly defined roles, responsibilities, and linkages between and among roles. It may also result from a lack of resources (e.g., there are not enough people or enough of the right people to get the job done) or the inability (or unwillingness) of managers to relinquish control over results to others.

As was discussed previously, when roles and responsibilities are not clearly defined, individuals or departments tend to act on their own because they do not know whose responsibility a given task is. They may also do the task themselves to avoid confrontation, because the person or department to whom they are trying to delegate a responsibility may refuse it.

Operating under this philosophy, departments become isolated from one another, and teamwork becomes minimal. Each part of the company does its own thing without considering the good of the whole. Communication between management and lower levels of the organization and between departments may be minimal because the organization has no formal system through which information can be channeled. The lack of coordination between areas can lead to productivity problems and inefficiencies.

Most People Feel That Meetings Are a Waste of Time

Recognizing that there is a need for better coordination and communication, the growing organization may begin to hold meetings. Unfortunately, in many companies these meetings are, at best, nothing more than discussions among people. They have no planned agendas, and often they have no designated leader. Participants may be allowed to take cell phone calls, check email, “work” on their computers, hold side conversations, and focus on many things other than the content of the meeting. Meetings become a free-for-all, tend to drag on interminably, and seldom result in decisions. The same agenda items appear again and again. As a result, people feel frustrated and conclude that “our meetings are a waste of time.”

The impact of ineffective meetings can be significant. For example, after five full days of work, a $150 million technology company's senior management team had yet to finalize its strategic plan. Why? Each day of meetings was constantly interrupted by “today's crisis,” which took one or more members of the team (including the CEO) out of the meeting for an extended period of time. Executives continually checked email, resulting in a lack of focus on the discussions taking place. When each executive tuned back in to the discussion, the rest of the group had to spend time helping him or her catch up. Each executive had a specific agenda of items that needed to be discussed and, instead of listening to and staying focused on the topic that was on the table, decided to share whatever was on his or her mind. As a result, the discussion jumped from topic to topic, with only limited resolution of issues. After five days of meetings, over a period of three months, the team decided that the plan was good enough, simply because they didn't have the time to finish it.

Other complaints about meetings involve lack of follow-up on decisions that are made. Some companies schedule yearly or monthly planning meetings during which goals are set for individual employees, departments, and the company as a whole. These sessions are a waste of time if people ignore or fail to monitor their progress toward these goals. At one residential real estate company, the budgeting process suffered from this condition. In a frustrating yearly exercise, managers met and set goals, then met again the following year with no idea of whether they had achieved the previous year's goals.

Although the problems listed result from too many meetings or meetings that are poorly managed, at the other extreme are companies where meetings are seldom held. In these situations, there is limited communication and coordination. As a result, the company frequently suffers from productivity problems, including duplication of effort.

When Plans Are Made, There Is Very Little Follow-Up, So Things Just Don't Get Done

As an organization grows, company leaders may recognize the need for and actually embark on a formal process of strategic and operational planning. Unfortunately, there are times when people may go through the motions of preparing these plans, but the things that were planned just do not get done. In one amazing case, there was no follow-up simply because the plan, after being prepared, sat in a drawer for the entire year until the next year's planning retreat. When asked about the plan, one senior manager stated: “Oh that. It's in my desk. I never look at it.”

Sometimes, there is no follow-up because the company has not yet developed adequate systems (that is, performance management systems) to monitor progress against goals. For example, many companies desire to monitor financial goals but have not developed an accounting system that can provide the information needed to do so.

In other cases, follow-up does not occur because personnel have not received proper training in setting, monitoring, and evaluating goals. They set goals that cannot be achieved or cannot be measured, or they do not know how to evaluate and provide useful feedback on goal achievement. These problems tend to appear most often in the performance appraisal process. This issue is discussed further in Chapter 8 (which deals with how to design and effectively use performance management systems).

Some People Have Begun to Feel Insecure about Their Place in the Company

As a consequence of the other organizational growing pains, employees begin to feel insecure about their places in the company. In some cases, the entrepreneur (if he or she is still present in the company) has become anxious about problems facing the organization and has therefore hired a “heavyweight” manager from outside. This action may have been accompanied by the termination of one or more current managers. Employees feel anxious, partly because they do not understand the reasons for these and other changes. When anxiety becomes too high, it may result in morale problems or excessive turnover.

Employees may also become insecure because they are unable to see the value of their position to the company. This occurs when roles and responsibilities are not clearly defined and terminations are also occurring. Employees begin to wonder whether they will be the next to get the axe. In an attempt to protect themselves, people keep their activities secret and do not make waves. This results in isolation and a decrease in teamwork.

Entire departments may come to suffer from the need to remain isolated in order to protect themselves from being eliminated. This can lead to a certain amount of schizophrenia among employees. They begin to ask, “Am I loyal to my department or to the organization at large?” In one company, a Stage IV firm, an employee expressed her sense of anxiety this way: “This company could give me a trip around the world for free, and I would think they were trying to get rid of me.” In this same organization, people indicated that they were afraid they would be fired if they said anything controversial. However, when pressed about the extent to which people had been terminated for speaking up, no one could identify a specific case. In effect, the culture of the organization had become one that promoted anxiety and fear. It also created a situation in which people spent more time covering their own vested interests than working toward achieving company goals.

The Company Has Continued to Grow in Sales, But Not in Profits

If all the other growing pains are present, this one final symptom may emerge. In some instances, sales continue to increase while profits remain flat, so that the company is succeeding only in increasing its workload. In the worst cases, sales increase while overall profits actually decline. Companies may begin to lose money without having any idea why. The business loss can be quite significant, even though sales are up.

In a significant number of companies, the decline in profits may be the result of an underlying philosophy that stresses sales. People in such companies may say, “If sales are good, then profit will also be good,” or “Profit will take care of itself.” Profit in these companies is not an explicit goal but merely whatever remains after expenses.

In sales-oriented companies, people often become accustomed to spending whatever they need to in order to make a sale or promote the organization. For example, at one prestigious magazine publishing company, employees believed that it was important to the company's image to always “go first class.” They made no effort to control costs, because they believed that no matter what they did, the organization would always be profitable. Organizations may also suffer because of systems that reward employees for achieving sales goals rather than profit goals.

For nonprofits, this growing pain can be restated as, “Our administrative costs have increased more rapidly than our funding (budget).” This growing pain can result from inadequate focus on fund acquisition (for example, in some nonprofits only a very few people are responsible for fundraising), from a belief that sources will continue to provide the same level of funding year after year, or from underdeveloped budgeting processes that do not provide the information needed to track administrative costs. The result is a lack of balance between “what we have” and “what we need” to support ongoing operations which can, at times, lead to the nonprofit's demise.

Scoring the Survey

Once the survey has been completed, the number of check marks in each column is totaled and recorded on line 11. Each item on line 11 is then multiplied by the corresponding weight on line 12, and the total is recorded on line 13. For example, Exhibit 5.1 shows four check marks in column B. Accordingly, we multiply 4 by the weight of 4 and record the result, 16, on line 13 of column B.

The next step is to determine the sum of the numbers on line 13. This total represents the organization's growing pains score. It can range from 10, which is the lowest possible or most favorable score, to 50, which is the highest possible or most unfavorable score.

Interpreting the Severity of Growing Pains Scores

Drawing on our research concerning the degree of seriousness of problems indicated by different growing pains scores, we have developed the color-coding scheme shown in Table 5.1. This table shows five different levels of severity of growing pains from a very healthy organization to one that is at grave risk of failure.

More detailed interpretation of score ranges is as follows:

• A green score represents a fairly healthy organization. It suggests that everything is probably functioning in a manner satisfactory for the organization at its current stage of development.
• A yellow score indicates that the organization is basically healthy, but there are some areas of concern. It is like hearing from your doctor, “Your cholesterol is in the normal range but on the high side.” It's something to watch and be careful about but not an immediate concern.
• An orange score indicates that some organizational problems require attention and action. They may not be too serious yet, but corrective action should be taken before they become so.
• A red score is a clear warning of present or impending problems. Immediate corrective action is required.
• A purple score indicates that the organization is having very serious problems and is in crisis. The organization is in distress and may be on the verge of collapse. There may not be enough time to save it.

If an organization's score exceeds 20, a more in-depth analysis to identify problems and develop recommendations for future action is warranted. Such a score may be a signal that the organization has reached a new stage in its development and must make major, qualitative changes. Failure to pay attention to a score of this magnitude can produce very painful results.

Growing Pains Scores for Different Business Sizes and Industries

Table 5.2 presents average organizational growing pains scores of companies with different annual revenues, based on our extensive research and data collection over almost 40 years. Interestingly, these results have been very stable over this period and virtually without change. As can be seen, organizations of every size experience some growing pains. Our data suggest that growing pains tend to increase in severity as companies increase in size from less than $1 million to $1 billion in revenues. However, organizations that reach $1 billion have (on the average) reduced growing pains. This suggests that, at revenue levels greater than $1 billion, an organization has developed the “critical mass” sufficient to bring these problems under a greater degree of control.

Table 5.3 shows scores broken down by type of industry. Figure 5.1 graphically depicts these scores, showing the trends in growing pains as revenues increase. Clearly, timing of the occurrence of significant organizational growing pains differs across industries.

In the service industry, growing pains become severe when an organization reaches $5 to $9 million in revenues (Stage III for a service firm) and diminish slightly as revenues exceed $10 million. This dip in severity of growing pains may indicate that $10 to $24 million in revenue is an easier service company size to manage than those over $24 million and those between $1 and $9 million. Growing pains begin to increase in severity again as the company's revenues exceed $25 million and remain significant until revenues exceed $1 billion.

High-tech companies appear to experience significant problems when they reach the $25 to $99 million range of revenues (Stage III). Problems then continue into the $500 million to $1 billion range, after which they begin to drop. Low-tech companies, in contrast, experience the most significant problems in the $5 to $9 million revenue range. Growing pains in low-tech companies also drop significantly at revenues over $1 billion. In fact, low-tech companies with revenues greater than $1 billion experience the least severe growing pains of companies in any industry at any size.

Companies in the financial industry begin experiencing significant growing pains when revenues reach $10 to $24 million (Stage III for financial firms), which continue through the $500 million to $1 billion revenue range. Financial companies with revenues exceeding $1 billion experience a significant drop in growing pains.

The information presented here suggests that companies in different industries need to be concerned with growing pains at different periods of their organizations' lives. For organizations in the finance industry, critical periods occur when revenues begin to exceed $10 million. For high-tech companies, significant growing pains begin when revenues are at $25 to $99 million, whereas, for service companies, they appear at $5 million in revenues and again when revenues begin to exceed $25 million. For low-tech companies, this critical point occurs when revenues are between $5 and $9 million. These data also indicate that large ($500 million to $1 billion in revenues) financial companies experience the most severe organizational growing pains, whereas large low-tech companies (in excess of $1 billion in revenues) experience the least severe growing pains.

Although the data presented in Table 5.3 and Figure 5.1 indicate that there are certain stages of growth in which organizational growing pains are likely to be severe, growing pains at any stage can be alleviated. This is best done through early detection of problems and careful plans for handling them.

The data suggest that growing pains typically increase as an organization's size increases to approximately $1 billion in revenues. Although companies with more than $1 billion in revenues do encounter difficulties and even fail (for example People Express, Boston Markets, Borders, and Maxicare), this appears to be a critical size for reduced growing pains. We can hypothesize that when an organization exceeds $1 billion in revenues, it may have achieved the critical mass and resources necessary to deal with its problems and overcome its growing pains, and that the probability of continued survival is increased. In brief, most companies that achieve this size are likely to have become professionally managed and have a high probability of continued success.

Distribution of Growing Pains Scores by Degree of Severity

Since 1980, we have been collecting Growing Pains Survey results from companies of all sizes in a variety of industries. The companies in our database were either clients of our firm, Management Systems, clients of one of our affiliates, or were participants in seminars or university-based education programs. We have also analyzed our database of growing pains survey results (which consists of over 5,000 companies from around the world) to identify the distribution of growing pains scores at each degree of severity. Table 5.4 shows the percentage of companies in our database with each of the five different levels of severity of growing pains from a very healthy organization to one that is at grave risk of failure.

As can be seen in Table 5.4, fewer than 3% of companies have a growing pains score of 14 or less, and 7% have scores between 15 and 19. Most companies have scores in the range of 20 to 39 (88%). Only 2% of companies have scores 40 or greater, the highest level of growing pains risk.

Our data and experience indicate that companies with growing pains scores greater than 40 are at considerable risk. If the underlying business conditions that are causing these scores are not treated, these organizations have about 12 to 18 months lead time before they face economic disaster, or bankruptcy.

Use of Growing Pains Measurements in Making Transitions

The Growing Pains Survey and related data presented here are important tools in helping organizations manage transitions successfully at different stages of growth. They indicate the degree of distress being experienced by an organization and can function as an early warning of serious problems to be encountered by an organization, such as those ultimately experienced by Borders, Osborne Computer, People Express, and Maxicare.

We have been using the Growing Pains Survey since 1980 as part of our consulting practice to help organizations of all sizes identify the need to make the transition from one stage of growth to the next. Measures of growing pains are useful in creating the motivation for change. Without the measurements, there can be a vague awareness of organizational problems, but the growing pains measures identify the issues with clarity, and, we have found, are more likely to serve as a stimulus to action. This is consistent with the theory of “data-based change,” developed by the University of Michigan's Institute for Social Research.

The survey can be used as part of the first step in the process of transition required between growth stages (described in Chapters 3 and 4). This is the evaluation of the company's effectiveness at its current stage of growth. It also serves to create a “baseline” against which progress can be assessed, as we shall see in the example of Guangzhou Construction Company later in this chapter. In fact, many of our clients have used repeated measurements of growing pains over several years to assess their progress in organizational development. Progress is assessed not only with respect to the overall score but for each individual item as well.

The Risk of Growth with Inadequate Infrastructure

When a company (large or small) does not have an adequate infrastructure, it is at risk. One of the most difficult things to tell an entrepreneur is that the company is not really prepared for growth, and that he or she needs to slow down the growth plan. As advisors, we have done this several times. As an example, we were asked by Dr. Tim Bain—an entrepreneur whose business involved holistic medicine—to help assess the extent to which his firm was ready for growth. His business was very successful and he was about to embark on a major expansion. Having read Howard Schultz's book, Pour Your Heart into It: How Starbucks Built a Company One Cup at a Time, Dr. Bain was aware of our work with Starbucks and in 2011 he engaged the authors to assist with the process of scale-up for his company.⁷

Our first step was to do an organizational assessment to identify the company's strengths, limitations, and the extent to which the infrastructure was in place to support Dr. Bain's growth plan—which included taking new leases on stores where his services were delivered, representing a major financial commitment. Our conclusion was that although promising, the business was not prepared for this type of growth and that it would entail considerable financial risk. We recommended that Tim begin a strategic planning and organizational development process, introduce a performance management process, develop clear role descriptions for all positions, and systematize the delivery process of his services prior to expansion (all aspects of infrastructure).

Dr. Bain accepted our conclusions and deferred his growth plan. He focused instead upon building the infrastructure required to support profitable growth. We worked with him for one year, and he continued the work on his own after that. By 2015, Dr. Bain had redefined his business concept and grown his business to $15 million in annual revenues. In 2015, as a stronger enterprise, he was planning further expansion both in terms of services offered as well as in the size of the business.

Organizational Growing Pains at Guangzhou Construction

As noted in Chapter 2, the Growing Pains Survey was administered twice at Guangzhou Construction—first in 2009 and then again in 2010 to measure progress after an organizational development program was conducted. As seen in Table 5.5, overall, in 2009, the growing pains of Guangzhou Construction were virtually in the red zone. The score of 29.5, while technically in the orange zone with rounding placed the company in the red zone, indicating the existence of some very significant problems. The consultant team working with Guangzhou also calculated the severity of each growing pain and found that five of the ten growing pains were ranked red. The complete scores are shown in Table 5.5.

As seen in Table 5.5, five growing pains were in the “red zone” (that is, over 30) in 2009. The measurement of growing pains is like taking someone's temperature—that is, it is possible to determine if there is a “fever” (if growing pains are high), but identifying the exact cause of the fever (or the growing pains) requires additional research and analysis. At the same time, however, it is possible to identify some of the factors that might be leading to these results, as described below.

At Guangzhou Construction, the most severe growing pain in 2009 (35.0) was that there are too few good managers. This, in fact, is a common problem among companies in China, where it is typically ranked as the number 1 or number 2 growing pain. Although typical in Chinese enterprises, it is still a serious problem. The underlying problem is typically a lack of focus on management and leadership development.

The high scores on two growing pains—People are not aware of what others are doing (33.3), and Everyone feels that they need to do everything themselves (30.0)—suggest that there are opportunities to enhance the effectiveness of the organization's structure (through, among other factors, clarifying roles and responsibilities) and increase the effectiveness of the company's communication and coordination processes. In addition, people feeling that they need to do everything themselves combined with the high score on “too few good managers,” might indicate that there are opportunities to help managers better understand and embrace their roles (that is, make the transition from “doing” to “managing”).

The high score on People are spending too much time “putting out fires” (31.7) suggests that there are opportunities to develop and implement a more effective strategic planning process (which would minimize the fires). It also suggests that there is a need to ensure that the culture of the company promotes and reinforces effective planning versus fighting fires.

Most significant, perhaps, is the very high score the company received on The company has continued to grow in sales, but not in profits. This suggests that there are significant infrastructure problems that are now affecting the company's financial performance. This is a significant “warning” that there is a need to identify and address these issues in a timely manner.

The remaining growing pains were all in the orange zone (with the lowest score being 25.0). This suggests that there are additional infrastructure improvements that need to be made. These include improving the effectiveness of meetings, creating and implementing effective performance management systems (to decrease the extent to which people feel that there is no follow-up on plans, once they are made), and helping everyone on the team understand (through effective planning and effective communication of plans) where the company is headed.

Overcoming the Growing Pains

The Growing Pains Survey results and findings from the Organizational Effectiveness Survey (discussed previously in Chapter 2) served as the catalyst for Guangzhou Construction's CEO to embark on a program of organizational development, as described in Chapter 2.

Results of the Organizational Development Initiatives

Within two years of the organizational assessment (which included the administration of the two surveys), Guangzhou Construction had dramatically improved its management systems. More important, profits had tripled. About one year after first administering the Growing Pains Survey, it was readministered to members of the organization. The results were dramatic: Guangzhou Construction's score had improved by a full color band, going from the red to the orange zone. Further, seven of the ten individual growing pains had decreased in severity as shown in Table 5.5. Two remained unchanged, and only one growing pain increased in severity—People feel that there are not enough hours in the day.

It typically requires two years to make significant progress in organizational development and reduce growing pains; however, Guangzhou Construction had made considerable progress in just one year.