When Growth Goes Wrong: The Risks of Scaling Too Fast with the Wrong Leaders
Megan Rose, T.
SHRM-CP | Future-Ready Talent & Leadership | AI-Driven & Trauma-Informed Career Coaching | Workforce Development & Strategy | DEI & Neurodiversity Advocate
Let’s talk about an issue that’s easy to overlook when the excitement of growth kicks in. Rapid growth can feel like a dream come true — the company is thriving, revenue is up, and there are opportunities everywhere. But here’s the catch: growing too fast without the right leadership can quickly turn that dream into a nightmare. When companies rush into expansion and don’t carefully consider who’s leading, things can spiral in ways that harm the organization and the people working there. So, let’s dig into why this happens and, more importantly, what can be done about it.
The Hazards of Rapid Growth
First, let’s talk about the common pitfalls of rapid growth. According to a Forbes article by Mary Ellen Biery (2014), expanding too quickly can strain resources, disrupt quality, and lead to poor financial management. When organizations grow fast, there’s often pressure to fill new roles quickly, and sometimes that means people without the right skills or experience are placed in leadership positions just to meet demand.
In a rush to keep up with market demands or investor expectations, a business might skip the steps that ensure new leaders are truly aligned with its culture and capable of guiding teams. This is especially dangerous for morale and productivity. When the wrong people lead, they may lack the vision, emotional intelligence, or strategic thinking needed to inspire and support teams. As a result, employees can feel overwhelmed, unappreciated, and frustrated by poor decision-making. And when turnover rates climb due to low morale, that disrupts the whole organization, ultimately impacting quality, customer satisfaction, and profits.
How the Wrong Leadership Affects the Culture
Think of an organization’s culture as its backbone. When you place the wrong people in leadership, the culture can go from supportive and collaborative to chaotic and even toxic. Leaders influence the daily experience of employees, and when they’re unprepared or ill-suited for their roles, that influence can become a liability. For instance, a leader with a clear vision, good communication skills, and the ability to inspire can be a 'right' leader. On the other hand, a leader who is indecisive, lacks empathy, and is unable to communicate effectively can be a 'wrong' leader.
For example, leaders placed in roles without the necessary skills may make rash decisions that don’t align with the company’s values or long-term vision. They may lack the insight to manage diverse teams effectively, leading to conflicts, miscommunication, and a lack of cohesion. The once-thriving company culture can become strained, leaving employees feeling disconnected from the organization’s mission and from each other.
When employees lose trust in leadership, engagement drops. And when engagement drops, so does productivity. It’s a ripple effect that can spread quickly, especially during times of fast-paced growth where stress levels are already high.
Operational Risks: Quality Slips and Communication Breakdowns
Another big risk in fast-growing organizations with poor leadership placement is that quality starts to suffer. Leaders who aren’t equipped to handle high-stakes demands may prioritize speed over quality to keep up with the rapid expansion. And while this might seem effective in the short term, it’s not sustainable.
Take communication, for instance. In stable organizations, communication flows more naturally, and teams are generally aware of changes or priorities. But in a fast-growing company with inexperienced leaders, communication can become fragmented. Important updates might be missed, teams can lose sight of their goals, and confusion becomes the norm. This breakdown not only causes stress but can lead to serious errors — especially when customers are involved. Poor communication and lack of coordination can lead to mismanaged projects, poor customer service, and even product failures.
The Financial Toll
It’s also worth noting that growth without the right leadership can be financially costly. As Mary Ellen Biery (2014) mentions, rapid expansion can stress financial systems, leading to budget overruns or cash flow issues. Leaders without the necessary skills in budgeting or resource management may not be able to keep costs in check or allocate funds efficiently. They may approve unwise investments, fail to prioritize cost-effective solutions, or even neglect budget tracking altogether. Over time, these financial missteps can create significant deficits, even jeopardizing the business's stability.
How to Support Healthy Growth and Leadership
So, what’s the solution? It’s all about taking a holistic approach to growth and making sure you have the right people in the right roles. Here are some strategies that can help.
领英推荐
Fast growth doesn’t have to mean reckless hiring. Focus on hiring strategically, especially for leadership roles. Look beyond technical skills and assess candidates for qualities like adaptability, vision, and empathy. Leadership training programs can also be valuable here. By investing in continuous learning for both new and existing leaders, companies can ensure that their leadership is prepared for the demands of growth. This strategic approach to hiring will give you the confidence that your leadership team is equipped to handle the challenges of rapid growth.
During rapid growth, it’s crucial to protect and reinforce your company culture. Create opportunities for leaders to engage with employees, encourage feedback, and celebrate the values that define the organization. Leaders need to model the behaviors and attitudes that reflect the company’s mission and show that they’re genuinely invested in supporting their teams.
Communication is key in any organization, but it’s especially important during times of growth. Set up systems for regular updates and clear reporting channels. Make sure all teams know where they can get information and how they can voice their concerns. By prioritizing transparency, leaders can build trust and reduce the confusion that rapid growth can cause. This open and inclusive communication will make everyone feel part of the journey and understand their role in the organization's growth.
When you’re growing quickly, it’s tempting to cut corners to save time. But quality should never be sacrificed for speed. Emphasize to leaders and teams that maintaining high standards is essential to the organization’s reputation and long-term success. Encourage a mindset that values thoughtful, deliberate action over rushing to the finish line.
Rapid growth can create financial strain, so financial oversight is essential. Leaders should have clear expectations about budget management and financial reporting. Investing in finance and accounting training for leaders or hiring a dedicated financial expert for guidance can help prevent costly mistakes such as overspending on unnecessary resources or failing to allocate funds for future growth. Regular financial audits and reviews can also keep leaders on track and ensure that spending aligns with organizational goals.
Cultivate a Healthy and Sustainable Organization
Fast growth can be exciting, but it’s not without its risks. When organizations prioritize sustainable growth over speed and carefully place the right people in leadership, they can create a thriving environment that benefits everyone. Remember, true success comes from the right mix of talented leaders, supportive culture, clear communication, and a focus on quality and sustainability. With the right leaders, your organization cannot only survive rapid growth but also thrive and reach new heights of success.
If your organization is experiencing rapid growth, consider whether you have the right leaders to guide that growth effectively. With the right steps, you can ensure that your organization remains healthy, resilient, and ready for whatever comes next.
Take care out there, and keep leading with heart!
Reference
Biery, M. E. (2014). Five hazards of growing a business quickly. Forbes. https://www.forbes.com/sites/sageworks/2014/08/10/five-hazards-of-growing-a-business-quickly/