# Why growing companies keep hitting a glass ceiling
Date: 2026-11-12
Author: Richard Brooks
Canonical: https://richard-brooks.com/greiner-growth-curve/
Some ideas change the way you see everything after them. For me, one of those was a simple curve in a 1972 *Harvard Business Review* article by Larry Greiner.
Before I saw it, I couldn't understand a pattern I kept running into. Companies would grow happily to a certain size, with no obvious problems, and then seem to hit a glass ceiling. They'd break through it, grow again, and hit another one. And another. It felt like bad luck, or bad management, or both.
Greiner's curve showed me it was neither. The crises are built into growth itself. Each way of running a company works brilliantly for a while, and then becomes the very thing that holds it back. Once you know that, you can see the next ceiling coming, and prepare for it.
Here's the curve, the five phases, and what I think it means for anyone running or building a business, with five figures to explore.
## What is the Greiner curve?
A model of how organisations grow, published by [Larry E. Greiner](https://en.wikipedia.org/wiki/Larry_E._Greiner) in "[Evolution and Revolution as Organizations Grow](https://hbr.org/1998/05/evolution-and-revolution-as-organizations-grow)" in the *Harvard Business Review* in July–August 1972 ([full text](https://ils.unc.edu/daniel/131/cco4/Greiner.pdf)).
Greiner used two words to describe a company's life:
- **Evolution:** long periods of growth with no major upheaval in how the company is run.
- **Revolution:** periods of real turmoil, when the old way of managing stops working.
His central idea is that each period of evolution creates its own revolution. The management style that drives growth in one phase eventually causes the crisis that ends it. And the way management solves that crisis decides whether the company moves on to its next phase of growth.
Watch the curve build, then click any label for what each phase looks like.
Figure 1
Evolution and revolution as organisations grow
Our drawing, after Greiner (1972). Size rises over time; each jagged section is a revolution. The second set of labels is my own rough guess for language companies, not research.
## Where did it come from?
Greiner was a professor at the University of Southern California's Marshall School of Business, with an MBA and a doctorate from Harvard. He built the model from Harvard Business School case studies and research on how companies developed, and set out to make a general statement about growth where most research had stayed specific.
He identified five forces that shape a company's development: its **age**, its **size**, its **periods of evolution**, its **periods of revolution**, and the **growth rate of its industry**.
His starting point is worth quoting, because it's the opposite of how most managers think. He argued that an organisation's future may be shaped less by outside forces than by its own history. Most management teams spend their time looking outward, at markets and forecasts. Greiner asked them to look back at where they'd come from, because the next crisis is usually sitting in the last solution.
When *HBR* republished the article in 1998, Greiner added a commentary. Summaries of it describe a possible sixth phase: growth through alliances, partnerships and networks outside the company ([MindTools](https://www.mindtools.com/aks7u4n/the-greiner-curve)).
## What are the five phases?
**1. Creativity, then a crisis of leadership.** The founders make and sell the product, communication is informal, and everyone works long hours for modest pay and the promise of ownership. It works brilliantly, until the company is too big to run on enthusiasm. More people, more customers and more money to manage bury the founders in management they never wanted. The way through is a strong business manager the founders will accept.
**2. Direction, then a crisis of autonomy.** Structure arrives: functions, budgets, accounting, incentives and decisions made at the top. Growth resumes, until the people closest to customers and operations know more than the people at the top, but can't act. Good managers leave. The way through is delegation.
**3. Delegation, then a crisis of control.** Regional and unit managers get real responsibility, profit centres and bonuses, and the top manages by exception. Growth comes from motivated managers close to their markets. Then the top realises it has lost control, and the units are running their own shows. The way through is coordination. Greiner notes that trying to recentralise usually fails.
**4. Coordination, then a crisis of red tape.** Formal planning, product groups, a bigger head office and careful capital allocation pull the company together. Then the systems multiply until procedure matters more than solving problems, and head office and the front line stop trusting each other. The way through is collaboration.
**5. Collaboration, then a crisis nobody knew.** Cross-functional teams, matrix structures, simpler systems and team rewards. Greiner admitted he didn't know what crisis would follow. His guess was "psychological saturation": people exhausted by constant teamwork and pressure to innovate.
## Can you skip a phase, or go back?
No, on both counts. Greiner was clear that each phase is both the result of the one before and the cause of the one after. Delegation grows out of the demand for autonomy, and it's delegation that eventually creates the control crisis.
So the range of solutions is narrow. A company with an autonomy crisis can't solve it with more direction, however tempting that is. And skipping ahead doesn't work either: each phase builds strengths and lessons the company needs later. Greiner compared it to a child prodigy, who may read like a teenager but can't behave like one until they've lived through the years in between.
## How long does each phase last?
It depends on your industry. Greiner found that companies that survive a crisis usually enjoy four to eight years of steady growth before the next one. In fast-growing industries the phases come faster, because headcount grows quickly. In slow-growing industries a company might only pass through two or three phases over many years. And when profits come easily, the crisis can be delayed, sometimes until the market turns and it arrives all at once.
Figure 2
Twenty years, three industries
Illustrative only. Growth periods of eight, five and three years, each followed by a year of crisis, based on Greiner's observation of four to eight years between crises.
## Why isn't the team that starts a business the team that grows it?
Because each phase needs different people. The founders who thrive on creativity and chaos are rarely the people who enjoy budgets and reporting lines. The managers who brought order in phase 2 often can't let go in phase 3. Greiner saw this clearly. He wrote that founders often resist stepping aside, even when they're not suited to being managers, and that the first critical choice is to bring in a strong business manager the founders will accept.
Pick a phase and see who it needs.
Figure 3
Who each phase needs
The people who make one phase work are often the ones who struggle in the next.
This leads to an uncomfortable question for every entrepreneur. You might not be the right person to run the business you started.
That isn't a criticism. Starting a business and growing one are different jobs, needing different skills and temperaments. If you're a founder who loves the creative phase, your time might be better spent starting a new business and letting professional managers run the one you've built. Greiner made a similar point about managers: a good phase 2 manager facing phase 3 might be wiser to find another phase 2 organisation that suits their talents.
He also pointed out that you can choose not to grow. A management team that knows what's ahead might prefer to stay small and keep the informal way of working it enjoys. That's a legitimate choice, as long as it's a choice.
I've written more about what happens when founders and families don't plan the handover in [six family business pitfalls to avoid](/family-misfortunes/).
## When should you prepare for the next crisis?
Now. The best time to fix the roof is when the sun is shining. John F. Kennedy used the line in his [1962 State of the Union address](https://en.wikipedia.org/wiki/1962_State_of_the_Union_Address), and it's the most useful thing I know about growing a business.
Most companies wait until the crisis is upon them, when everyone is stretched, cash is tight and tempers are short. Research like Greiner's lets you see it coming. He argued that managers who understand the pattern should be able to predict future problems and prepare solutions before a revolution gets out of hand. He also warned that management must be ready to dismantle current structures before the turbulence becomes too great.
So, where are you? Tick the statements that are true for your business.
Figure 4
Where are you on the curve?
A rough guide to start a conversation, not a diagnosis. Different parts of a business can be at different phases.
A good way to use this is with your leadership team, separately. If you all tick different boxes, that's a conversation worth having. Then turn what you find into a plan, for example with the [3-12-6 framework](/3-12-6-planning-framework/).
## What does this look like in a language company?
I've spent much of my career in the language industry, and I use the curve when I talk to language service providers. Switch Figure 1 to "a language company" to see my rough guess at where the crises hit: around $500,000 in revenue, then $1.5 million, $5 million, $10 million and $100 million.
I want to be clear that it is a guess. It's me having a think, based on companies I've known. No research has gone into those numbers, and every company is different.
What I'm more confident about is the work that each stage demands. Pick a revenue band.
Figure 5
Operational milestones for a growing language company
The milestones I use with language companies. The revenue bands are approximate.
Read them against the curve and you can see Greiner's phases. At around $1 million, the work is putting in the structure and management team that move a company from creativity to direction. At $8 million, it's expanding into new offices and markets, which needs delegation and soon tests control. At $25 million, it's programme management, compliance and restructuring, which is coordination, with all the risk of red tape. And at that size, a founder-led company may decide it's time for a non-founder CEO.
## What are the model's limits?
It's a model built from case studies, and Greiner called his five phases "only approximations". Not every company follows the sequence neatly, and researchers have criticised it for being unclear about what exactly triggers the move from one phase to the next ([Lambert and Méreaux](https://hal.univ-reims.fr/hal-02571461/document)). The crisis after phase 5 was a guess, and the sixth phase came twenty-six years later.
It was also written for large American companies in the early 1970s. Today, small companies can use outsourcing, software and freelancers to do things that once needed a head office, which may stretch some phases or change their order.
But the core insight has lasted more than fifty years because it keeps proving true: the solution to one stage of growth becomes the problem of the next.
## Does AI change the curve?
Possibly, and it's an open question. AI may let a small team run systems, reporting and coordination that once needed a much bigger organisation, which could push some ceilings further out. It's just as possible that it makes companies grow faster, so they hit the crises sooner. Either way, the people questions at the heart of each crisis, who decides, who's trusted and who leads, don't go away. And if you're deciding when to bet on a new technology, [Gartner's Hype Cycle](/how-to-use-gartners-hype-cycle/) is a better guide than the headlines.
## Where should you start?
Find your phase. Ask what's working brilliantly right now, because that's probably what will cause your next crisis. And ask the hardest question honestly: are you the right person to lead the business through the next phase, or is your best contribution to start the next one?
Then fix the roof while the sun is shining.
**Sources:** Greiner, L.E. (1972) "Evolution and Revolution as Organizations Grow", *Harvard Business Review*, 50(4), pp. 37–46, republished in 1998 at [hbr.org](https://hbr.org/1998/05/evolution-and-revolution-as-organizations-grow), [full text of the 1972 article](https://ils.unc.edu/daniel/131/cco4/Greiner.pdf); Wikipedia, [Larry E. Greiner](https://en.wikipedia.org/wiki/Larry_E._Greiner); MindTools, [The Greiner Curve](https://www.mindtools.com/aks7u4n/the-greiner-curve); Lambert, G. and Méreaux, J.-P., [on the limits of Greiner's model](https://hal.univ-reims.fr/hal-02571461/document); Wikipedia, [1962 State of the Union Address](https://en.wikipedia.org/wiki/1962_State_of_the_Union_Address).