How to Navigate Rapid Growth

In 2019, two Dutch entrepreneurs founded an environmental, social, and governance (ESG) consulting firm with six like-minded friends and former classmates. United by a shared vision to transform their industry, the close-knit team members poured themselves into the venture, working long hours and celebrating every small win.

Within a year, their growing success led to the hiring of nine additional employees. By the end of 2022, the firm had expanded to 147 employees, bringing in a wide range of expertise, functional specializations, and international knowledge to meet surging demand.

This phenomenal success came at a cost, however. As the company scaled, the very qualities that had driven its early success — homogeneity, cohesion, and easy collaboration — began to erode. Tensions surfaced. Operations were disrupted, and four of the original six members eventually departed.

Such challenges are not unique. Rather, they are emblematic of a recurring pain point we have identified through our combined decades of research on high-growth ventures and our advisory work with over 25 growing companies across Europe and Asia. We’ve observed that rapid growth often leads to a breakdown in unity due to divisions that emerge between early joiners and newcomers.

We term this phenomenon the growth fault line: the paradox whereby the initial homogeneity that fuels strong connections and rapid growth must give way to growing heterogeneity, requiring a departure from the very culture that once drove the organization’s success. We’ve identified three ways for leaders to combat this division and thrive during times of expansion: They must actively work to create a shared language, foster a shared identity, and encourage a culture of dissent.

The Tricky Dynamic Between Early Joiners and Newcomers

As new employees enter an organization with their own work norms, values, and assumptions about how things should be done, the cohesion of the once unified team often begins to strain. This transformation introduces two key challenges that we have observed firsthand in our work with growing businesses.

The first challenge is the rise of division among employees in the form of subgroups. Employees break into factions based on shared experiences or characteristics. In many of the organizations we studied, these fault lines emerged prominently between early joiners and newcomers.

At the ESG consulting firm, for instance, the two founders and the first six joiners consisted of seven men and one woman, all Dutch, in their early to mid-20s, and graduates of the same business school. None had children. All had similar work and social habits. Three years later, newcomers differed across multiple dimensions: Nearly half of the 147 employees were female, and the age range had expanded to include people in their late 40s. The company had become more international, with employees representing 12 nationalities. They had a broader range of educational and professional backgrounds, and many had families and different expectations about work-life balance.

For the original team members, the rapid influx of new employees represented a loss of the close-knit identity and norms that had defined the company’s early days. Many clung to the familiar by reinforcing bonds with fellow early joiners, forming a tight subgroup to preserve their shared history and ways of working. This was their way of resisting what felt like a dilution of the company’s original spirit. In parallel, newcomers, facing exclusion and a lack of openness to their perspectives and knowledge by early joiners, formed their own connections with others who felt similarly sidelined. Over time, these subgroups became entrenched, further deepening divisions within the organization.

The second challenge is a lack of shared understanding of the organizational reality across early joiners and newcomers. While the expansion process aims to bring in employees who will broaden a company’s capabilities, these newcomers also introduce a wider variety of behavioral norms, work styles, and values. This phenomenon is well documented in group dynamics research. Heterogeneous groups often struggle to develop shared mental representations of their tasks and goals, meaning that team members lack a common cognitive map of how the work is structured, who does what, and how actions are meant to fit together. At high-growth ventures, this disconnect quickly becomes a barrier to effective collaboration. Instead of capitalizing on the expanded resources and knowledge available, the organization risks underperformance due to misalignment.

At the Dutch firm, these tensions led to frequent misunderstandings about work standards, role division, priorities, and expected levels of initiative. Those misunderstandings, left unaddressed by management, escalated into conflicts and power struggles, limiting the company’s ability to realize the potential benefits of growth.

A Way Forward: Three Steps Toward Better Integration

Those two challenges — division into subgroups and a lack of shared understanding — pose significant risks to organizations navigating the transition from small, cohesive teams to larger, more complex ventures. As we have observed in numerous cases, this transition phase often comes with high costs, including the departure of both early joiners and promising newcomers, a loss of momentum, and a diminishment of the very innovation and agility that growth is meant to amplify.

For organizations to thrive amid rapid growth, they must address these challenges head-on. Here’s how.

1. Create a Shared Language

Founders often believe that newcomers will intuitively pick up on informal norms and implicit rules, and they avoid formalizing processes to maintain what they see as a culture of flexibility. However, as the workforce grows, this approach frequently leads to misunderstandings and conflicts. Managers often turn to informal bonding activities, such as offsite retreats or social events, hoping to spark new cohesion. While well meaning, these activities can unintentionally amplify cultural and behavioral differences, further deepening divides.

Instead, the first priority for managers should be to establish a shared organizational language that aligns employees around consistent understandings of processes, norms, roles, and goals. Much like an architectural blueprint enables varied professionals to collaborate on a construction site, a shared language ensures that early joiners and newcomers can work together effectively.

In our work with organizations experiencing rapid growth, we’ve come across various tools to do this. One effective approach is to develop lists of appreciated actions and unwelcome actions. At a German health care company experiencing a rapid international expansion, this approach involved holding regular meetings where employees and managers discussed misunderstandings or conflicts they had encountered, with the dual aim of uncovering differences in behavioral norms among employees and collaboratively forming a consensus.

These discussions resulted in a dynamic document categorizing behaviors into green-light actions (those that were expected and appreciated) and red-light actions (those that were discouraged or unwelcome). For example, in one meeting, early joiners voiced frustration over newcomers’ reluctance to respond to client emails during evenings or on weekends. The discussion resulted in a consistent understanding among employees regarding work-life balance norms and customer service standards. The document that emerged from the meeting now serves as a practical onboarding tool, helping new employees quickly get up to speed on the company’s culture and expectations. Importantly, the company does not use the green-light/red-light tool for imposing rigid rules but rather to foster a shared understanding of organizational norms.

Another method is the three C’s planning approach, which Jacques developed during his tenure as CEO of ING Bank Asia/Pacific to address organizational complexity and misalignment. The name refers to a road map that records processes, goals, and priorities in a way that is comprehensive, complete, and consistent. This starts with a bottom-up process, where managers provide documentation of their teams’ activities, objectives, and workflows in a structured manner. In the second step, a dedicated team integrates these inputs into a unified organizational map, using well-defined terminology and KPIs. In the final stage, this map becomes a formal tool for planning, coordinating, reporting, and communicating activities across the organization in a consistent form.

Both the green-light/red-light process and the three C’s approach demonstrate that the goal of a shared language is not to suppress differences but to create a foundation for harnessing them. They uncover and resolve misaligned understandings of the organization’s structure and priorities while also providing leadership with greater control over the increasing complexity of operations.

2. Foster a Shared Identity

Research that Meir conducted found that the impact of growth on organizational success hinges on the degree of shared identity among employees. In a series of studies on team dynamics (in 2016, 2019, and 2024), our research teams found that employees who strongly identify with their organization tend to interpret differences in work styles, values, and priorities as complementary assets that enhance collaboration. Conversely, those with weaker identification often see such differences as divisive, leading to friction and stalled teamwork. Thus, a key challenge for managers is to actively foster a stronger shared identity. This can transform internal differences between early joiners and newcomers into a resource rather than a liability.

The fast-paced nature of high-growth organizations often pushes issues of cohesion to the back burner until a crisis demands attention. At the Dutch ESG consultancy, a growing disconnect between early joiners and new hires led to the departure of founding team members. These early joiners cited a loss of connection and purpose as the organization expanded. Leadership was left scrambling to repair the rift.

To avoid such scenarios, managers must address their audiences in distinct ways.

First, as the shared vision that once defined the organization gives way to growth and change, managers should reconnect with early joiners and recognize their frustration. Managers must address this situation by crafting a refreshed story that reflects the company’s larger, more heterogeneous structure. A strong new narrative must strike a balance: honoring the contributions of early joiners while making it clear that the organization is maturing and that change is essential. In our work, we have seen companies do this in several ways: by acknowledging early joiners as stewards of core values and publicly recognizing their contributions; directly involving them in shaping the next growth phase through strategy workshops; and assigning them formal mentoring roles in onboarding. In many cases, this involvement helped replace nostalgia with shared ownership of what would come next. This approach reassures early joiners of their continued importance while reinforcing that adaptability is critical for future success.

Second, managers need to focus on integrating newcomers. Managers should emphasize the unique value newcomers bring, framing their differences as assets that enhance team success. Integration begins with creating deliberate opportunities for cross-functional collaboration and shared work-related rituals that unite employees around common goals. Equally important is addressing subtle, everyday practices, such as cliquish seating arrangements, that can unintentionally deepen divides. One German tech company we worked with put these principles into practice in two concrete ways. Every new hire was introduced organizationwide by highlighting their expertise and business contributions, without mentioning work-irrelevant information. And managers avoided subgrouping by ensuring that newcomers were not clustered into single teams and that project assignments mixed early joiners and new hires from day 1. This prevented minority isolation and reinforced that integration, not separation, was the norm.

3. Encourage a Culture of Dissent

While the first two steps address ways to mend the growth fault line, they are not enough to fully unlock the benefits from the growing range of perspectives and working norms that newcomers bring with them. A shared understanding of organizational reality and a shared identity lay the foundation, but to benefit from the full spectrum of ideas that heterogeneity brings, organizations must go further.

Harnessing differences requires a culture of dissent, where disagreements are not only respected but encouraged and rewarded. Such a culture brings differences to the forefront, transforming them into opportunities for growth and innovation.

Management best practices often highlight the importance of fostering psychological safety — ensuring that employees feel secure enough to share their perspectives. Practices like engaging in open dialogue and active listening are critical to achieving this. However, there’s a paradox: Efforts to create psychologically safe environments can sometimes discourage employees from weighing in on difficult topics. This avoidance prevents organizations from accessing a full range of valuable perspectives. To overcome this, managers must deliberately foster a freedom to disagree.

Promoting a full range of conversation, including views opposed to those expressed by the stronger voices in the room, requires intentional leadership. Managers must lead by example, actively seeking out and welcoming a variety of opinions. Structured feedback mechanisms, such as anonymous channels or dedicated forums, enable employees to voice differing views. Recognizing and rewarding thoughtful disagreement, such as by publicly acknowledging employees who challenge ideas constructively and by incorporating such behavior into performance reviews and promotion criteria, signals that such contributions are both valued and essential to organizational success. Transparency in decision-making is equally important: Leaders should explain the rationale behind decisions and demonstrate that opposing opinions were considered.

The true test of a dissent-friendly culture is whether employees feel encouraged to voice concerns about the very changes that growth and heterogeneity bring about, without fear of reprisal. By creating a culture where skepticism and constructive criticism are not only tolerated but embraced, organizations can fully realize the potential of their growing workforces.

Moving Forward, With Intention

Successfully navigating the challenges of rapid growth requires more than good intentions. It demands deliberate action. Building a shared language, fostering a shared identity, and cultivating a culture of dissent are critical steps in this process.

In our experience, the sequence of these actions is crucial to their success. A common misstep is attempting to promote dissent or to focus on a cohesive identity without first establishing alignment and clarity around cultural norms. Likewise, emphasizing alignment and process formalization without attending to how to capitalize on the value of a growing workforce risks leaving deeper cultural and structural issues unresolved. Both approaches risk undermining the very benefits that growth and heterogeneity are meant to deliver.

Leaders, particularly early joiners, must abandon the belief that the organization can grow when they continue to cling to its early-stage culture. Acknowledging that growth requires a shift in mindset as a prerequisite is essential to unlocking the full potential of this transformation.

Leaders who embrace this evolution position their organizations to adapt, innovate, and thrive in increasingly complex environments.