The symptom
Consider an organisation that expands from a handful of sites to several dozen over a relatively short period. Growth itself, by most measures, goes well — sites open, revenue increases, the model appears to travel. And yet, somewhere in the process, issues begin surfacing that nobody anticipated: coordination gaps between sites, inconsistent standards, a central team stretched thinner than expected, decisions that used to happen quickly now stalling.
The natural interpretation is that growth caused these problems. A closer look at when they actually began often tells a different story: many of these issues existed in smaller, less visible form before growth started, tolerated or simply unnoticed at a scale where informal habits and personal relationships were enough to paper over them. Growth did not create the gap. It removed the conditions that had been quietly covering it.
What the evidence suggests
Larry Greiner’s research on organisational growth phases, republished as an HBR Classic more than two decades after its original Harvard Business Review publication with the author’s own updated commentary, describes exactly this pattern: the practices that enable growth at one stage of an organisation’s life are frequently the same practices that produce a crisis once conditions change, because what worked well at a smaller scale was never actually redesigned — it simply stopped being questioned while it was working. A founder’s direct, informal oversight is the clearest example: effective and efficient at a small number of sites, and quietly unsustainable well before it becomes visibly so at a larger number.
Jay Galbraith’s organisation design research, published in Interfaces, offers a compatible explanation of why the strain shows up specifically as growth accelerates. Growth increases the volume of coordination and information-processing demand an organisation has to handle; structures adequate for a lower volume do not fail gradually and evenly, they tend to function reasonably well until the demand exceeds what they can absorb, at which point strain appears relatively quickly rather than as a slow, easily noticed decline.
Nelson Repenning and John Sterman’s MIT Sloan research on the capability trap, published in California Management Review, adds a further reason this pattern tends to go unaddressed until it is severe. Their research describes how organisations under pressure default to working harder within existing approaches rather than investing time in identifying and fixing underlying gaps, because the people who would do that identifying work are the same people consumed by managing the growth already underway. This creates a specific and somewhat counterintuitive dynamic: the period when an organisation would most benefit from stepping back and asking these questions — while it is actively growing — is also the period when it has the least organisational slack available to do so, which is precisely why the questions in this article are more useful asked before expansion accelerates than during it.
The questions worth asking before expansion
A useful discipline, before committing to the next stage of growth, is to ask what the organisation currently knows about itself only because it is still small enough to know it informally — and to treat each answer as something growth is likely to remove, not something growth will simply carry forward at larger scale.
Does the central team currently know what is happening at every site through some combination of direct visits, personal relationships and informal updates? If so, that knowledge is almost certainly not going to scale linearly with more sites, and it is worth asking what will replace it before the gap opens rather than after.
Is the operating model’s consistency currently maintained more by close, personal oversight than by the model’s own design? A model that works well under close supervision is not the same as a model that works well when supervision is necessarily thinner, and growth is precisely what tests that difference.
Have any current sites already begun to diverge from standard in ways that have not caused visible problems yet, simply because they are small in number and easy to individually track? A larger network will not be able to track the same divergence the same way, which means the tolerance the organisation currently has for quiet variation will be tested at a scale it has not yet experienced.
Would the organisation currently know if it were expanding faster than it could genuinely absorb what each new site reveals? Growth pace and organisational learning capacity are two different things, and an organisation confident about the first has not necessarily examined the second.
Is there a person, or a small group, whose personal knowledge and effort is currently what holds several of these gaps together? Growth tends to expose single points of dependency of exactly this kind, not because the individuals involved become less capable, but because the volume of what they are personally compensating for eventually exceeds what any individual can continue to absorb.
Where this shows up
This perspective is written with multi-site businesses in mind. It sits within the Multi-Site and Franchise grouping, and the questions it raises recur in other sectors too.
Questions worth considering
- Which current strengths of the organisation depend on its present, smaller size, rather than on anything that would survive growth unchanged?
- If growth paused for a defined period, what would that pause reveal about gaps that expansion has so far kept moving too fast to notice?
- Does the organisation have a way of distinguishing a problem that growth caused from one that growth simply made visible?
Your team is facing similar challenges?
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