This paper examines Intuit's organizational state prior to CEO Steve Bennett's arrival in early 2000 using three analytical frameworks: the stages of organizational growth, the pyramid of organizational development, and the eight hurdles model. It evaluates how Intuit navigated each phase—from early chaos through stability to high performance—and identifies where the company succeeded or stumbled. The paper also explores whether Intuit was better characterized as a billion-dollar entrepreneurship or a professionally managed firm, reviews the sweeping changes Bennett introduced in his first eight months, assesses their intended and unintended consequences, and offers three practical recommendations an advisor might have made to the new CEO in August 2000.
In many ways, Intuit was a classic entrepreneurial success story. Seventeen years after its founding, the company had reached $1 billion in sales, was solidly profitable, and its stock price stood at 40 times fiscal year 2000 earnings. An evaluation of Intuit's state prior to Steve Bennett's arrival in early 2000 can be conducted through organizational development and evolution models. Applying these frameworks helps determine the degree of success Intuit had achieved relative to its strategies and objectives. Three models are particularly relevant: the stages of organizational growth, the pyramid of organizational development, and the eight hurdles model.
This model involves three stages of organizational growth. The first stage is the chaos stage — a period when policies and procedures are unclear, priorities shift constantly, and goals and direction are poorly defined. In Intuit's case, this stage corresponds to the founding period, when the company had minimal funds to facilitate operations and expand production. This chaotic beginning was nonetheless the foundation from which rapid development would eventually grow (Bonham, 2008).
The second stage is stability. During this phase, the company clearly outlines its priorities, goals, objectives, and strategies. For Intuit, stability came as the company secured enough funds to sustain operations, settled on a clear market segmentation strategy, and focused on satisfying consumer needs. This allowed the organization to increase revenues while minimizing production costs — the ideal conditions for rapid growth. The stability Intuit achieved is a primary reason the company transformed into a multi-billion-dollar organization. Maintaining employees over the long term also enabled the development of a strong organizational culture, which worked in tandem with stability to drive continued growth (Bonham, 2008).
The third stage is high performance. At this point, the organization focuses on improving service and product delivery to consumers. Intuit conducted extensive market research to determine consumer needs and preferences, which allowed it to capture a large market share. High performance was sustained through culture, market knowledge, and commitment to the organization's mission and vision. The benefits of effective top management cascaded to lower ranks, further enhancing the organization's capacity for rapid growth and development (Bonham, 2008).
Organizational development represents the process by which a firm plans and implements relevant changes across its entire capacity with the aim of increasing effectiveness and profitability. The pyramid of organizational development model involves six key levels that are crucial to long-term success (Blythe, 2005).
The first level is the identification of a viable market. An organization's success depends heavily on how effectively it identifies its audience. Intuit clearly identified its target audience and conducted extensive research on how to serve consumer needs effectively. This provided a crucial competitive advantage and set the company on a path to rapid economic and financial growth.
The second level is product identification. Products must satisfy the needs of the identified market. Intuit's flagship product, Quicken software, captured a large market share because it effectively addressed consumer needs. Intuit's commitment to understanding those needs through market research allowed it to serve consumers efficiently and maximize profit levels.
The third level concerns available resources. Resources at the company's disposal determine the potential for growth and development. In its early stages, Intuit solicited the funds necessary for organizational development through personal wealth, promotional activities, and third-party contributions. Acquiring sufficient resources allowed the company to execute its plans and experience rapid growth prior to Bennett's arrival.
The fourth level is operational systems. Effective operational systems determine an organization's capacity to support its daily activities, including customer service. Intuit applied strong operational systems to gain a competitive advantage, and customer care programs both attracted new clients and retained existing ones (Blythe, 2005).
The fifth level is the management system. Intuit benefited from an effective and efficient management system that focused on planning and executing strategies for long-term growth. The founder's management approach provided crucial momentum for development at all levels of the organization.
The sixth and final level is culture. Intuit recognized the importance of organizational culture and applied it deliberately in addressing consumer needs. This enabled the company to maximize profits while expanding its market coverage, contributing to the rapid growth experienced prior to Bennett's arrival (Blythe, 2005).
In the process of developing a business entity, it is crucial to overcome eight key hurdles. The first hurdle is identifying strategic direction and maintaining focus on the main objective. Intuit excelled here; its core strategy was to serve consumer needs through effective and efficient means, which produced a strong competitive advantage.
The second hurdle involves positioning products and services within an expanded market. Quicken's dominant market share resulted directly from effective positioning in a competitive environment, and Intuit successfully cleared this hurdle.
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