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At the start of the week we were in the all too familiar position of steady, but not dramatic improvement. Surely there is room for larger scale improvement: our average SHV is evidence that there is potential to do much better. But how do we continue to grow in a market that appears to have plateaued in terms of growth? That was the problem we faced this week, and consequently it was hard to make decisions without a concrete goal (for our improvement) to focus our decision making on.

In Brazil there doesn’t seem to be much more room for growth. Although there is still consumer surplus, we are all in the same markets so are struggling to take advantage of this. Previously an underlying focus of our weekly strategy was to try and increase our sales: more sales = more profit. However now that growth has plateaued in our markets, we find ourselves struggling for answers as to how to significantly increase our SHV. After reading Greiner’s literature, I found myself looking at my group’s performance over the semester in progressive stages. We started producing and selling, which is what Greiner (1972) categorises as phase one. We progressed to making our operations more efficient and expanding our market share. Up to this point we are improving in accordance with Greiner’s phases, however this is where it ends. We have reached a point where it seems like we are unable to move forward and continue along Greiner’s Graph trend. Greiner (1972), suggests that perhaps our struggle for improvement is because we succumb to the temptation of using old solutions. These had previously proved successful, however, preceding phases require completely new solutions, thus making it impossible for new phases of growth to evolve.

Interestingly, although Greiner suggests using an entirely new solution; we did the exact opposite. As a group we realised that the best move for us (approaching the final rollover) was to fine tune our operations and become more efficient. This was our solution when we moved into stage two – so Greiner would argue that this is not the ideal solution (at least not from progressive into the next phase). However we realised there were still a lot of areas where we could cut down costs, so perhaps we had done what Greiner warns managers not to do – skipping a phase. As a result we decided to go back and perfect it. Another way we decided to try and increase our shareholder value (without increasing sales) was to give as much advice and guidance to our subsidiary team.

Our rollover yesterday was successful and it was pleasing to see that our decision to go back (to Greiner’s phase 2) and concentrate on efficiency paid off. I now understand the importance of completing developmental stages before rushing to the next – ultimately you’re just going to have to go back and get it right a second time. A slightly disappointing outcome of this week’s rollover was the our subsidiary’s SHV did not increase as much as we hoped. This is a whole other problem to discuss in a separate learning journal – but I think it came down to wanting to help without being controlling. Trying to find a balance here was challenging, and their SHV indicates that we didn’t do a very good job at finding this balance which hopefully we will do better at next week.

 

References:

Greiner, L. E. (1972). Evolution and revolution as organizations growHarvard Business Review, 50(4), 37--46.

2 Comments

  1. I find your use of the Greiner reading relevant and well used; it was interesting to see your mimicking the phases in your own siutation. One thought I have is that Greiner's growth phases are all about crisis and revolution. However, for your concern about stable SHV it doesn't really seem like a crisis. While this depends on your team objectives of course, it doesn't seem that relevant to constantly search for new phases of growth. The decision you actually took seems more logical to me, perhaps you could have referred to the reading on 'Double-Loop Learning' about having a deeper assessment of your goals (increasing sales seems fairly illogical as the market plateaus) and then you could have related this to your goals for your subsidiary. Although as you say that would have to be a whole separate journal. 

    You don't spend much discussing possible other solutions but for me this seems to be because your initial problem does not seem like it requires as much reflection, although I suppose it's just because I would have been more interested to hear your thoughts on your subsidiary. 

  2. This would have to be one of the top journals I've had to review in regards to using a reading thoroughly throughout the journal instead of just having one reference to the reading.  I though you managed to relate it really well to your current mikesbikes situation.  I don't really see how you could improve greatly, hopefully the following rollovers allow you to aid your subsidiary as this is probably an area where you have the potential to increase your she dramatically.