The paradox of getting bigger
The qualities that make a company nimble start to disappear right when growth demands them most
A strange thing happens to some successful companies. The qualities that made them nimble, fast-moving, and able to win big start to disappear as they grow. The startup that once made decisions with a few people around a small table, comfortable moving into uncertainty, is suddenly mired in layers of departments, meetings, and approval processes that take weeks instead of an afternoon. The gears slow as they grow.
But growth is the point. Roughly three-quarters of mid-market companies expect to grow revenue in 2026, and 64% project higher profits, according to the J.P. Morgan Business Leaders Outlook. Growth is also the thing that erodes the very agility that once helped them hit new heights.
The physics of size
Nelson Repenning, an MIT professor who studies organizational design, doesn't think the effects of growth are a failure of leadership so much as a fact of physics. "It's just naturally harder for big organizations, substantively," he says. "If you're building software for a tiny startup and you're all in a room together, the communication challenges are relatively minor. But when you have a 3,000-person organization, the number of connections you need to coordinate goes up, and different issues naturally arise."
Repenning has a simple way of detecting when that complexity has started to actually hurt an organization, rather than just support it. Watch how long important work takes. "An early sign is when core activities start to take longer," he says: developing a product, making a decision, resolving a customer's problem.
The second tell is easy to miss but more revealing: people start working around the official system, quietly creating informal approvals, spreadsheets, side channels, or shadow workflows because the formal process is too cumbersome. That gap, Repenning says, is the real warning sign: not the workaround itself, but when people feel they need to hide it.
Growing companies don't have to become bureaucratic companies. But they do have to be deliberate about what they allow to accumulate—systems, processes, approvals, tools, and assumptions.
Tyler Sloat
CFO and COO, Freshworks
Even when those tells are visible, leaders often miss them, because they assume the connections that made the company nimble in the first place are still intact. Steve Hart, a business consultant who spent decades managing at companies like Adobe and Hearst, has watched nimble companies balloon into sprawling organizations of tens of thousands of employees, piling up layers of process, silos, and incentives that drown out what customers are actually saying. "They think they remember how to stay connected to their customers," Hart says. "But they don't."
Blame a bias toward addition over subtraction. "Our default problem-solving style is addition, not subtraction, usually in the name of improvement," says Bob Sutton, a Stanford professor who studies evidence-based management.
Read also: Why every organization needs a ‘Simplifier in chief’
The governance tax
Still, all those systems and layers in themselves aren’t in themselves the problem. "Efficiency and adaptability by themselves are not a bad thing," says Charlie Rataj, an organizational-change practitioner. "But when you push either one too far, unintended trade-offs occur."
At Freshworks, CFO and COO Tyler Sloat has watched this play out across the company’s software footprint. Early on, he says, different parts of the business bought whatever tools they wanted: hundreds of tools on the go-to-market side alone, including three separate reporting systems generating three different answers to the same question. "It creates a massive inefficiency when you have a situation where you have three different dashboards that are supposed to be presenting the same exact data, and they're all different," he says. “People waste cycles trying to reconcile and rebuild something that should live in a system. Our tools get in the way of our productivity.”
Eventually the case for governance outweighed the case for letting every team stay nimble on its own terms, and Freshworks consolidated. "Growing companies don't have to become bureaucratic companies," Sloat says. "But they do have to be deliberate about what they allow to accumulate—systems, processes, approvals, tools, and assumptions."
Fellowmind learned this after acquiring sixteen companies across five countries in quick succession. The Northern European IT firm discovered it was running eighteen different service-management systems, with legal, compliance, and HR each stuck in their own silo. "Innovating and building for the future is impossible if you run different systems," says Gorm Priem, the company's chief of staff. After consolidating onto one platform, Fellowmind's managed services revenue more than doubled while its delivery team grew only 10 to 20%.
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The AI factor
AI isn’t necessarily the answer to staying nimble. Mid-market IT teams already spend 26% of their AI-related time on troubleshooting, integration, and firefighting rather than strategic work, according to Freshworks research, and 86% of IT leaders say managing AI complexity has increased their team's workload. But AI can help when companies make a point of auditing their processes and optimizing them for automation. Simplifying first.
Ultimately, the biggest trick to remaining an “agile organization” is just seeing the complexity coming and staying ahead of sludge in the gears. The measure of success is how fast the company can move in the moments that matter.
"It's whether, despite all that growth, someone with a good idea can still get it heard," Sloat says, "and whether the organization can still move to meet new opportunities."
