Getting to Prime

Interview with management consultant Ichak Adizes on growing a company to attain peak corporate performance.

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Ichak Adizes on why some companies age prematurely while others go on to attain peak corporate performance

We generally don't publish interviews with consultants about their management theories. OK, we ran one with Peter Drucker a few years ago, but that was a little like making an exception for God. When we began hearing about Ichak Adizes from various company presidents we knew and respected, they made no claims about his immortality or his infallibility. They simply said that he was a new breed of management consultant, one who really understood how businesses work and what could be done to make them better.

Adizes is, in fact, more than a consultant. He is a pioneer in the field of management -- a serious, insightful, and astute observer of organizational behavior, which he has been studying for 25 years. Born in Yugoslavia and raised in Israel, he received his doctorate from Columbia University and is currently an adjunct associate professor at the John Anderson Graduate School of Management at the University of California at Los Angeles. In addition, Adizes has one thing going for him that even Drucker does not: he has built his own company, Adizes Institute Inc., in Santa Monica, Calif., which he founded in 1975. In the process, he has experienced many of the trials of management about which he writes, lectures, and advises other companies.

Over the years, Adizes has developed what amounts to a general theory of management, which he presents in an unusually lucid book titled Corporate Lifecycles: How and Why Corporations Grow and Die and What to Do About It (Prentice-Hall, 1988). His basic contention is that organizations have life cycles just as living organisms do. They go through normal struggles and difficulties at each stage of the life cycle, and they face predictable problems in moving from one stage to the next. But unlike living organisms, business organizations do not have to grow old and die, he says. It is possible for them to arrive at and stay in their prime forever, and he describes a methodology that he claims will allow them to do it.

Adizes talked about getting to prime with senior writer Bruce G. Posner and editor-at-large Bo Burlingham.

INC.: We often think that any company could be like Federal Express if it only had Fred Smith as its founder. You apparently feel you've developed a methodology that allows a company to reach its competitive peak even if it isn't run by a superstar.

ADIZES: That's correct, and it is a liberating process, because in the American work culture we tend to look for individuals. When things go bad, we ask, "Who did it? Who should be fired? Who is going to save us?" I take a different approach. I say there is no savior. You have to learn how to work together if you want your company to operate at its peak. It is really a matter of getting the company to the stage of the corporate life cycle called prime.

INC.: Tell us what you mean by that.

ADIZES: A company's place in the life cycle depends on two factors -- flexibility and control. When a company is young, it is very flexible, but its behavior is erratic, which is a function of self-control. It's like a baby. You never know when it's going to smile, when it's going to wet its diaper. So what happens as the company ages? Flexibility goes down, and self-control goes up -- for a while, that is. Then it goes down, just as it does in a person. Prime is the point at which the two lines cross. The company is both flexible and controllable. You can decide to change direction, and then you can make it happen.

INC.: Are you saying that reaching prime is just a matter of time and experience?

ADIZES: No, no, no. This has nothing to do with chronological age or even size. A company can be 100 years old and extremely flexible. It can be 10 years old and bureaucratic. When I looked at Philip Morris, it had $8.5 billion in sales, but it was much more flexible than some food brokers I've seen. So when I say a company is young, I mean that it has flexibility with limited control. Old means that a company has a lot of control but little propensity to change. Every company has to be young at some point, but it doesn't have to become old. It can be in prime forever. The trick is to get there and stay there.

INC.: That's awfully hard to swallow. What about changes in the market, in technology, in product life cycles? You seem to be suggesting that a company can get rid of its problems and go merrily along its way as if nothing were happening in the world outside.

ADIZES: I didn't say anything about getting rid of problems. You can't get rid of problems, but you can make sure that you are focusing on the right ones.

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