Introduction: The Cycles of Business Growth
The growth of a business is not a straight line—it’s more like a series of waves, each with its own rhythm of calm waters and stormy seas. Larry Greiner’s “Evolution and Revolution as Organizations Grow” (1972) provides foundational insight into how organizations progress through cycles of stability (evolution) and disruption (revolution). Greiner identified a recurring pattern of growth, where companies face periods of smooth, incremental growth—what he called “evolution”—followed by times of significant upheaval, or “revolution,” where radical changes are necessary for survival and growth. These cycles can be triggered by shifts in the marketplace, technological advancements, or leadership challenges. These cycles can feel like the company is on a rollercoaster ride: a steady climb followed by a sudden drop. Yet, businesses that understand these cycles can better navigate them and, ultimately, thrive
According to Greiner, each phase of growth is marked by specific challenges and crises that organizations must navigate. The key to managing this process effectively is understanding when to rely on steady, incremental improvements versus when to embrace bold, transformational goals. The balance between evolution and revolution, and the strategic tools used in each phase, forms the thesis of this article.
This article explores an idea at the heart of successful business management: OKRs (Objectives and Key Results) are perfectly suited for guiding companies through periods of revolution—where bold transformation is needed—and KPIs (Key Performance Indicators) shine in the evolutionary phases, where maintaining efficiency and fine-tuning operations is the priority.
By understanding when to deploy each framework, organizations can stay aligned and focused during their growth cycles, ensuring that they don’t just survive the revolution but come out stronger on the other side.
The Evolution-Revolution Growth Framework: Understanding the Phases
Greiner’s model breaks down the organizational lifecycle into two distinct phases:
- Evolution: These are the steady, incremental phases of growth. Here, companies refine their operations, optimize processes, and maintain stability. Think of this phase as “business as usual,” where operations hum along smoothly, but there’s still work to be done to improve.
- Revolution: This is the disruptive phase, where something big needs to change. Whether it’s a leadership shake-up, a shift in market dynamics, or a technological breakthrough, revolutions are periods of upheaval and bold new directions. These are the times when companies need to pivot, realign, and innovate to move forward.
Why OKRs Thrive in Revolution: Focus, Alignment, and Agility
Revolutionary periods are chaotic. There’s a sense of uncertainty, disruption, and the need for a clear new direction. This is where OKRs come in.
OKRs are a framework designed to help organizations align on a small set of bold, high-priority objectives. They create clarity and focus, helping teams stay aligned even when everything around them is in flux. During a revolution, companies need to be laser-focused on what really matters, and OKRs help them get there.
Example 1: Space Exploration and the Revolution of Rocketry
SpaceX provides a perfect example of revolution within the space industry. When the company introduced reusable rocket technology, it completely disrupted the established norms of space exploration. This revolutionized the economics of space travel, pushing the industry toward cost-effective, reusable launch systems.
For SpaceX, OKRs should be used to drive these revolutionary breakthroughs—objectives like “Reduce launch costs by 30% in the next two years” or “Land the first crewed mission to Mars by 2026.” These bold, ambitious goals provide clarity and alignment during times of extreme innovation and rapid technological advances.
At the same time, SpaceX can continue to refine and improve their existing rocket models, maintaining a focus on operational efficiency, reliability, and scale. These evolutionary improvements ensure that the company’s existing launch systems remain highly competitive while pushing forward with revolutionary technologies like the Starship and Mars colonization missions.
Example 2: Consumer Tech – The Evolution and Revolution of Cellular Technology
The evolution of cellular technology also provides a prime example of how revolutions shape entire industries. Each new generation of cellular networks—1G, 2G, 3G, 4G, and 5G—marks a revolution in how people communicate, each step requiring massive investments, new infrastructure, and new business models.
Consider the leap from 4G to 5G. The development of 5G wasn’t just an incremental improvement in speed – it was a complete revolution, enabling technologies like autonomous vehicles, real-time smart cities, and the Internet of Things (IoT). Companies in the telecom sector, like Verizon and AT&T, should set OKRs focused on launching 5G networks globally and leading the charge in the new technological frontier. OKRs can enable these companies to align their efforts across different teams and geographies, creating a unified vision around the successful roll-out of 5G technology.
Meanwhile, these same companies continue to optimize their existing 4G networks, ensuring they meet the growing demand for mobile data and keeping their customers satisfied with reliable service. KPIs should be created to track network uptime, data speed, and customer satisfaction—ensuring that business runs smoothly as they prepare for the next revolutionary leap.
Why KPIs Excel in Evolution: Steady Performance and Refinement
While OKRs are great for revolution, KPIs are what companies rely on during evolutionary periods. Evolution is about optimizing what’s already in place—keeping the engines running smoothly and ensuring that everything is on track. KPIs focus on measurable, repeatable outcomes that gauge an organization’s performance on a consistent basis.
During evolutionary phases, organizations focus on refining and optimizing existing systems. KPIs are used to track and improve ongoing operations, ensuring that the business continues to function smoothly and efficiently.
Example 1: Cellular Technology and the Evolution of 4G
Let’s return to the cellular industry. The transition from 3G to 4G is widely considered to have been evolutionary. The focus here wasn’t about disrupting the entire industry; it was about improving speed, reliability, latency and capacity within existing frameworks. KPIs such as “network uptime” or “average data speed” were critical for ensuring that the infrastructure kept pace with customer demands and the ever-growing need for mobile data.
This phase was evolutionary because it didn’t require a complete overhaul of the system—it required refinement and optimization of what was already in place.
Example 2: Post-Revolutionary Refinement in Space Travel
After the revolutionary introduction of reusable rockets by SpaceX, the company entered an evolutionary phase where the focus shifted from groundbreaking technology to scaling the existing systems. KPIs like “cost per launch,” “time between launches,” and “rocket refurbishment cycles” help ensure the company maximizes efficiency and optimizes its operations as it prepares for the next big leap in space exploration.
The Hybrid Approach: Managing Evolution and Revolution Simultaneously
Many companies today find themselves balancing the need to maintain stability with the desire to innovate and disrupt. In these cases, a hybrid approach is necessary. Organizations can’t simply focus on evolution or revolution alone—they need both.
Hybrid Growth Strategy: Companies that are both “keeping the lights on” with KPIs and shooting for the stars with OKRs can simultaneously maintain operational success while pushing forward with innovation. This dual approach allows them to optimize their current processes and achieve long-term transformational goals.
Hypothetical Example: A Company Like Tesla’s Hybrid Approach
Let’s consider Tesla. On one hand, the company should use KPIs to track manufacturing efficiency, vehicle quality, and customer satisfaction—key metrics to keep the business running smoothly and ensure the mass production of its electric vehicles. On the other hand, they should simultaneously set OKRs that drive bold, revolutionary change, such as “Expand market share in Europe by 15% this year” or “Launch the next-generation self-driving car with full autonomy.” These objectives push the company toward game-changing innovation in the automotive industry.
In this hypothetical scenario, the company’s ability to manage both types of objectives simultaneously allows it to stay ahead of competitors in the electric vehicle market while continuing to innovate with groundbreaking technologies. The balance of KPIs and OKRs lets them navigate the complexities of both evolution and revolution in a rapidly changing industry.
Connecting the Two: A Practical Framework for Businesses in Growth Cycles
So how can businesses use OKRs and KPIs effectively? The key is understanding where the organization is in its growth cycle. Knowing whether you’re in a period of revolution or evolution helps you choose the right tool for the job. Here’s how:
- Revolution = OKRs: Focus on outcome-driven, transformational goals. Align teams around a few critical objectives. Foster innovation and break down silos. OKRs are built for these moments of bold, strategic change.
- Evolution = KPIs: Track ongoing performance, optimizing processes to maintain operational success. KPIs ensure stability and help companies improve efficiency over time.
Actionable Takeaways: How to Navigate Your Growth Phase
- Assess Your Phase: Is your company going through a revolution or evolution? A quick diagnostic can tell you which framework to prioritize. Are you in the middle of a bold new shift, or are you refining your existing processes?
- Deploy OKRs Strategically: If you’re facing a revolution, use OKRs to keep everyone aligned on the big objectives. If you’re in an evolutionary phase, let KPIs guide you as you optimize operations.
- Combine Both Approaches: Some companies operate in hybrid phases, where both OKRs and KPIs are necessary. In these cases, balance OKRs with KPIs to manage the complexity of both innovation and optimization.
Conclusion: Balancing Evolution and Revolution for Long-Term Success
Business growth is a cycle of evolution and revolution. By strategically deploying OKRs and KPIs, organizations can navigate these phases effectively, ensuring they don’t just survive but thrive through both stability and transformation. SpaceX, cellular technology, and companies like Tesla illustrate how this dual approach can help organizations innovate, scale, and lead in today’s dynamic business environment.
Kevin Baum is a Global OKRs Coach with OKRsTraining.com, and the author of Lessons From the Line, Why Every Leader Should be a Firefighter For A Day.