What does research say about the benefits of the business lifecycle model?
Research findings and journal articles back up the need for business planning that takes the business lifecycle into account. According to Madhu Bala, Ph.D., “Each of the phases in the industry life cycle requires an appropriate business strategy, which in turn demands innovative knowledge of relationships that link the past, the present, and the future of the firm.”Disclosure 1
In an article published in the journal Sustainability, researchers concluded that leaders and owners must design business models that can provide a “platform for stability” by making “strategic decisions relevant to the life cycle they are in.” This, they say, is the only way to ensure an “acceptable level of growth and development” that allows a business to be successful “over a long period of time.”Disclosure 2
In a review of organizational lifecycle models in the Journal of Organization Design, researchers noted that growth is no longer a given for a business—and the movement through the lifecycle may not be linear. As a result, the authors recommended looking at why things change at each stage of a business rather than focusing solely on business size or growth.Disclosure 3
“Making plans and decisions based on your business lifecycle stage is most effective if your advisory team shares this holistic, long-term view—and works with you on a day-to-day basis, not just during important transactions,” says David Weaver, head of Truist Commercial Banking. “At Truist, this begins with your relationship manager getting to know you through candid, ongoing conversations to provide proactive solutions and insights to help you get where you want to go in the near—and distant—future.”
Learn more about what clients experience through the Truist Business Lifecycle Advisory approach.
What are the origins of the business lifecycle model?
One of the earliest models of the business lifecycle (also called the organizational life cycle, or OLC) was discussed in the Harvard Business Review in 1967 by researchers Lippitt and Schmidt. They proposed that just three stages—birth, youth, and maturity—exist in the life of a business. They looked at the “personality” of each stage to help owners, leaders, and advisors predict, recognize, and cope with stage-related challenges.3
Their report identified the critical concerns associated with each of these stages and the likely consequences to a business if those concerns were not addressed in a timely and effective manner. For example, the authors noted that mature businesses are concerned about their contribution to society, as well as whether (and how) they should share what they’re doing with the world. According to the report, a failure in this area could result in a loss of public respect—and, ultimately, profits.4
How has the business lifecycle model evolved?
In later models of the business lifecycle (sometimes expressed as three words: business life cycle), stages were added, renamed, or redefined. Still, they commonly noted that businesses in each stage have typical characteristics with somewhat predictable impacts on key areas of the business, including leadership, talent acquisition and retention, product development and innovation, standardization of procedures and operations, and more.
Interestingly, the business lifecycle models from the 1960s to the 1980s suggested that the growth of a business is linear and sequential. But today the view is more flexible—largely because the economy is more volatile and globally interconnected. This modern economic landscape makes it possible for changes in the macroeconomic environment to impact the stage of a business quickly and significantly, whether temporarily or for a longer time.
Think about the ripple effects to the supply chain that could be caused by, say, the closure of a major trucking enterprise or a strike among railway workers. These types of events could put tens of thousands of people out of work and delay deliveries for millions of households and businesses. Such disruptions can shake the foundations of businesses at every stage of the business lifecycle. And the impact can extend far beyond the borders of the country in which they occurred—and far into the future, as well.
Why does the business lifecycle idea sound so familiar?
Even if you haven’t thought much about business lifecycle advisory, you’ve likely looked at other types of lifecycles within your business. And with good reason.
- Principles of product lifecycle management can help businesses find and fix inefficiencies to get products to market faster.Disclosure 5
- Looking at all aspects of the software development lifecycle means tech pros can make improvements and implement security measures well before launch.Disclosure 6
- If sustainability is on your radar, a lifecycle assessment of goods or services can help you see how your activities impact the environment, from resourcing materials to the product’s end of life (and disposal). This is often called the “cradle-to-grave” model.Disclosure 7, Disclosure 8
- Even marketing teams have found success mapping the customer lifecycle (or customer journey) to better target messages to new prospects (sparking curiosity) or loyal customers (who might be inspired to promote your product by word of mouth).Disclosure 9
In all these cases, it’s easy to see that a lifecycle approach can benefit a business’s bottom line, timelines, and more.
The business lifecycle advisory approach takes this same basic principle—namely, breaking down an aspect of a business into smaller segments—to examine typical or potential challenges, solutions, and opportunities for gaining or maintaining a competitive advantage in the marketplace.
When did business lifecycle advisory emerge in banking?
Traditionally, banking relationships—in personal and business sectors alike—have been largely transactional and not very customized. In recent years, however, B2C (business to customer) banks have begun shifting away from this one-size-fits-all approach toward a model that puts customer experience (CX) at the center of decision making. This has resulted in the creation of product and service bundles, as well as more differentiated options for things like loans and accounts. Banks began using data analytics to deliver more creative and customized solutions to clients. In 2019, professional services firms like Boston Consulting Group and Genpact suggested that retail and commercial banks follow suit.Disclosure 10
In “Commercial banking and the customer experience imperative,” Genpact noted that customer experience is a key differentiator today—and they suggested that banks “map your customer journeys around the axis of your customer’s needs rather than the bank’s products.” At the time the report came out, they said, “although commercial banks are making wide use of customer-journey mapping, they tend to apply it within product or functional silos.”Disclosure 11
Truist has been focused on the client experience for years, providing individualized, contextualized products and services that meet today’s needs—while also keeping future goals and plans in mind.
How does Truist take business lifecycle advisory to a new level?
Your business’s lifecycle stage is important—and can tell us a great deal about your current and potential needs. However, each business, leader, and team is different. To customize your experience, we also look at your lifecycle stage as well as your industry, geographic footprint, size, competition, and any other factors that make your business unique.
“We look at your business from all angles, including your business lifecycle stage and beyond, to help us deliver the most comprehensive, holistic, customized, contextualized, and collaborative experience possible,” says Weaver.
Put another way, the Truist relationship manager looks at a client’s business lifecycle stage and related needs, then assembles the right team at the right time—including internal and external partners—and brings them to the client.
“Many business leaders are used to thinking about what their goals are for the next five years,” says Weaver. “But what we’re asking them is, ‘What are the key platforms that are mission-critical to your business?’ Those are the things that need to be constantly reevaluated all year, every year, with respect to the business lifecycle stage they’re in, so businesses can pivot in real time as the forces around us change.”
Learn more about what Truist Business Lifecycle Advisory looks like in action.
