The Real Reason Company Cultures Collapse During Scaling
Company culture doesn't break because founders stop caring, but because the organization has outgrown its coordination methods.
The collapse of a company's culture during scaling is often attributed to factors like toxic hires or a lack of founder attention. However, a primary driver is the obsolescence of the company's coordination mechanisms as it grows.
In early stages, culture thrives on personal relationships, fostering trust and accountability. As companies expand, these relationships can no longer scale effectively, leading to cultural breakdown if leadership relies solely on personal connection and care.
The issue isn't necessarily a lack of caring from founders, but rather that the company's original methods of operation are no longer sufficient. As the workforce grows and direct founder-employee connections dwindle, relationship-based coordination needs to be supplemented or replaced by more structured processes.
Achieving a sustainable culture requires balancing high care with high performance. This often necessitates a shift from relationship-based alignment to agreement-based systems, with clearly defined roles, standards, and expectations. Such transformations may require leadership changes and disciplined change management to succeed.