What it means in practice
A small founding team typically operates with near-total shared context — everyone in the room knows what the product is trying to do, why, and for whom, because that understanding was built together, in real time, through the company’s earliest and most formative decisions. As the company scales, this shared context does not automatically travel with new hires. Each new person joins with a slightly less complete version of the original “why,” absorbed secondhand from documentation, onboarding conversations, or simply observing what the team currently does rather than understanding the reasoning that produced it. Individually, none of these gaps are large. Collectively, across dozens of new hires, the company’s sense of its own focus becomes a composite of increasingly diluted versions of the original, rather than the sharp, shared understanding it started with.
Donald Sull, Rebecca Homkes and Charles Sull’s research on strategy execution offers a directly relevant complementary finding: across more than 250 companies, only 9% of managers believed they could reliably rely on colleagues in other functions and units, and the central execution problem their research identified was horizontal coordination — not, notably, the quality or clarity of the original strategy. A technology company’s loss of focus during scaling is rarely a failure of the founders’ original vision; the vision itself typically remains sound and is usually still stated clearly in company materials. What breaks down is the coordination needed to keep that vision consistently translated into decisions across a rapidly multiplying set of teams, each interpreting the same stated priorities slightly differently as shared context thins.
Why it happens
Jay Galbraith’s research on organisation design describes this as a natural consequence of rising information-processing demand: a growing organisation has more decisions to make, more people needing context to make them well, and informal, proximity-based coordination — the kind a small founding team relies on without even noticing it is a mechanism — simply cannot carry the same volume of shared understanding once the group has grown past a certain size. Unless a company deliberately builds an explicit way of carrying and refreshing its sense of focus, the informal mechanism erodes quietly, and focus fragments not through any bad decision but through the simple mathematics of more people holding less complete context each.
Where this varies
The erosion is sharper in companies growing primarily through hiring rather than through acquiring already-aligned smaller teams, since hires joining individually absorb context one relationship at a time, while acquired teams at least arrive with a coherent internal understanding of their own, even if it differs from the parent company’s. It is also sharper in companies expanding into multiple product lines simultaneously, since each new line adds its own version of “why,” multiplying the number of distinct contexts a growing organisation needs to hold coherently at once.
It is worth noting that this fragmentation is largely invisible in the metrics a growing technology company typically tracks. Revenue, headcount, and product velocity can all look healthy while the organisation’s shared sense of why it is doing what it is doing quietly thins out across an increasing number of people, which is part of why the erosion tends to be recognised only in hindsight, once a genuinely costly misalignment has already occurred.
A recognisable early symptom is two teams independently building solutions to the same underlying problem, each unaware of the other’s work, because neither had a clear enough shared picture of the company’s actual priorities to recognise the overlap in advance. Neither team is at fault; both are behaving reasonably given the incomplete, secondhand version of company context each happens to hold.
Where this shows up
People working in technology companies will probably recognise this pattern first. The wider Professional and Knowledge-Based grouping and the other sectors page show how it presents elsewhere.
Questions worth considering
- How much of this company’s original sense of focus is currently held by people who were present when it was first established, versus people who absorbed it secondhand?
- If the founding team were unavailable for a month, would the company’s current priorities look the same as they do today?
- What deliberate mechanism, if any, currently refreshes shared understanding of the company’s focus as new people join?
Your team is facing similar challenges?
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