How it presents in technology companies
A technology company can move from a handful of founders to several hundred employees within a small number of years — sometimes months, in cases of exceptionally rapid growth — compressing transitions that, in Greiner’s original research on more traditional industries, often played out over a decade or more. Jay Galbraith’s research on organisation design describes rising information-processing demand as the underlying driver of these transitions; in a technology company, that demand can rise nearly as fast as headcount itself, leaving very little time to build the coordination mechanisms — shared systems, explicit decision rights, formal communication structures — that a slower-growing organisation would have more time to develop gradually, almost without deliberate effort.
A further factor compounding the compression is that a technology company’s product itself often scales at a pace unrelated to its organisational headcount, adding a second axis of rapid change on top of people growth. A product’s user base can grow tenfold in a period where the organisation has only doubled, or vice versa, meaning the company must simultaneously absorb rapid change in two different dimensions — organisational complexity and product complexity — that in most other industries tend to move on more correlated, and therefore more manageable, timelines.
How it presents in professional services firms
A professional services firm, by contrast, typically grows through a more gradual accumulation of client relationships and staff, often constrained by the pace at which new senior staff can be developed or hired with the requisite judgement and relationships. This slower pace gives more natural time for informal coordination mechanisms to adapt incrementally, even without deliberate intervention — though, as related research elsewhere in this series shows, this does not make professional services firms immune to the same underlying pattern, only somewhat more gradual in encountering it.
How it presents in traditional manufacturing or asset-based industries
In manufacturing and other asset-based industries, growth is frequently constrained by physical capital — building new facilities, securing supply chains — which imposes a natural pace on organisational growth that headcount-driven technology companies do not share. Nelson Repenning and John Sterman’s research on the “capability trap” is relevant here too, but manufacturing organisations often have more built-in time, dictated by physical constraints rather than organisational choice, to build underlying capability alongside output, compared with technology companies where both product and organisation can scale almost as fast as hiring allows.
How it presents in recruitment businesses
Recruitment sits in an interesting middle position. Growth is not constrained by physical capital in the way manufacturing is, but it is constrained by market-facing relationships — client accounts and candidate networks — that take genuine time to build, in a way that a technology company’s product usage, in principle, does not. A recruitment firm can add consultants relatively quickly, but each new consultant’s actual productivity depends on building their own relationship base, which imposes a natural, if softer, pace on how fast the firm’s real capability can grow, even when headcount grows faster. This gives recruitment firms a partial, informal brake on the Greiner-style compression technology companies lack entirely, though — as the recruitment-specific articles in this series show — it does not exempt them from a milder version of the same underlying pattern.
What explains the variation
The underlying mechanism Greiner, Galbraith, and Repenning and Sterman each describe — informal coordination breaking down under rising complexity, and organisations defaulting to effort over capability-building under pressure — is common across all four contexts. What differs is simply the ratio between how fast complexity rises and how much time exists to build a deliberate response to it. Technology companies face the least favourable version of that ratio, not because their leaders are any less capable, but because their growth is least naturally constrained by anything external to the organisation’s own decisions about hiring and scope.
This has a further implication worth naming directly: comparisons between a technology company and a more traditional business in the same broader industry group can be misleading if they do not account for this timeline compression. A technology company that appears, on some measure, to be managing growth less gracefully than a slower-moving peer may simply be encountering the same universal pattern on a far shorter runway, not managing it less capably.
There is also a benchmarking risk worth naming. Technology companies often look to other technology companies for comparison — a natural instinct, since the comparison feels most relevant on the surface — but if most peer companies are experiencing the same compressed timeline and the same underlying strain, the comparison group itself may not represent a genuinely healthy standard. A company benchmarking itself only against equally fast-growing peers risks concluding that widespread strain is normal and therefore acceptable, when a genuinely useful comparison would ask what a well-coordinated organisation looks like regardless of how fast it happens to be growing.
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
- Given how quickly this company can add headcount, how much deliberate time has actually been set aside to build coordination mechanisms, rather than assuming they will develop naturally?
- Which of this company’s current processes were built for a significantly smaller team, and has anyone reviewed whether they still fit?
- If the company’s growth rate suddenly slowed, would that additional time be used to build capability, or would existing habits simply continue at the same pace?
Your team is facing similar challenges?
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