Originally published at maturitylab.com. This text belongs to the track Maturity.
Management maturity levels describe how far a company’s processes are defined, repeated, measured and improved. The most widely used scale has 5 levels: initial, managed, defined, quantitatively managed and optimizing. This article describes the signs of each level, shows how to identify the current level by dimension and explains how to plan the move to the next level.
Where the 5-level scale comes from
The 5-level scale originated at the Software Engineering Institute (SEI) of Carnegie Mellon University, in the United States. The current reference model of the family is CMMI (Capability Maturity Model Integration). The report CMMI for Development, Version 1.3, November 2010 defines the 5 maturity levels that models in other areas still use as a base: business management, projects, risk, information security and innovation.
Names vary between models. Some call level 2 “repeatable”, the name used in the first version of the model. The logic stays the same: each level depends on the previous one, and no level can be skipped.
Measuring the level has an economic effect. The study The New Empirical Economics of Management, by Nicholas Bloom, Renata Lemos, Raffaella Sadun, Daniela Scur and John Van Reenen, published by NBER in 2014, based on the World Management Survey, attributes about a quarter of total factor productivity gaps across and within countries to management practices.
The 5 management maturity levels
Level 1: initial
Work is improvised. Results depend on individual effort, not on a known process. Signs: each person performs the same task differently; knowledge stays with whoever does the work; the same problems recur.
Level 2: managed
Each area plans its own work, follows a minimum rule and monitors execution. Signs: there are targets and deadlines by area; commitments are met most of the time; the process still varies between areas and depends on specific people.
Level 3: defined
The company has a documented standard process, and areas tailor it from that base. Signs: written, up-to-date procedures; onboarding with reference material; one person leaving does not stop delivery.
Level 4: quantitatively managed
The company sets measurable quality and performance objectives and decides based on indicators. Signs: indicators with a target, a source and a frequency; results meetings driven by data, not opinion; deviations handled with root cause analysis.
Level 5: optimizing
Continuous improvement is part of the routine and relies on a quantitative understanding of results. Signs: regular improvement cycles; process changes tested and measured before adoption; lessons learned recorded and applied.
Did you know? The CMMI for Development report describes level 1 as an environment where success depends on the competence and effort of individuals, not on the use of proven processes. That is why the first move is to make the process visible.
How to identify your company’s current level
The maturity level is not a single number for the whole company. It varies by dimension. A company can have finance at level 3 and people management at level 1. The overall average hides the weakest dimension, which usually limits the others.
The assessment follows 4 steps:
- Choose the reference model. The model defines the dimensions assessed. Examples of management dimensions: strategy, processes, people, finance and customers.
- Answer by dimension. Each answer describes the actual practice, not the desired one. When more than one person answers, disagreement between answers is a finding.
- Check against evidence. A written procedure, an indicator with history and meeting minutes confirm or correct the answer.
- Record the score by dimension. The result is a profile, with the level of each dimension, not a single rating.
How to plan the move to the next level
Each level calls for different actions. Building an indicator dashboard (level 4) on a process that is not written down (level 1) produces meaningless numbers. The plan addresses the next step of the weakest dimension.
| Move | Focus of the actions |
|---|---|
| Level 1 to 2 | Targets by area, a process owner, weekly follow-up |
| Level 2 to 3 | Written standard process, training, periodic procedure review |
| Level 3 to 4 | Indicators with target and source, data-driven results meetings |
| Level 4 to 5 | Improvement cycles, testing changes before adoption, recording lessons learned |
In practice: a plan for the next level
- Identify the dimension with the lowest score.
- Read the signs of the next level for that dimension.
- Select 3 to 5 actions that produce those signs.
- Give each action a named owner, a deadline and a completion criterion.
- Set the date of the next measurement, between 6 and 12 months ahead.
Common mistakes when reading the levels
- Treating the level as a ranking. The right level depends on strategy. A small company may not need level 5 in every dimension.
- Answering with the desired practice. The assessment loses value when it records what the company intends to do.
- Trying to skip levels. Each level builds the base for the next. An indicator without a defined process has nothing to measure.
- Measuring only once. Without a second measurement, there is no way to know whether the plan worked.
Frequently asked questions
How many management maturity levels are there?
The most widely used scale has 5 levels, inherited from CMMI: initial, managed, defined, quantitatively managed and optimizing. Some models use 4 or 6 levels, with the same logic of gradual progress.
Does the whole company have a single maturity level?
No. The level is measured by dimension. The useful picture is the profile with the level of each dimension, because the weakest dimension shows where the action plan should start.
How long does it take to move up a level?
It depends on the size of the company, the dimension assessed and the number of actions in the plan. Common practice is to measure again within 6 to 12 months to check progress.
