The Over-Correction Trap: Why Scaling Leaders Accidentally Break Their Culture

Scaling a business is tough for SME leaders. You think everything is gearing up nicely and then, thwack, it can feel like reward is stretching further away.

Up to 50 people in the team, recruitment is a joy. Every hire feels like an addition to a carefully curated collection. Potential and cultural fit are far more important to you than anything else. When you find the right person and they accept, the gratitude is mutual.

But all this time, your organisation is assuming shape and structure. As soon as one person is managing another, that process has begun.

Eventually, you hit a point of inflection where growth slows down because recruitment becomes painful. It happens, imperceptibly, between 51 and 250 people. It is impossible to be more accurate because it depends entirely on the nature of your business and the types of people you need.

The Shift in the Packet

You can always tell after the shift has taken place.

Junior roles become much easier to fill. You find it simpler to write a job description because you’re doubling up an existing role. Because you’re more established, people who wouldn’t have taken a punt on a 25-person team suddenly make themselves available. That’s the easy part.

But then you realise you need to fill gaps in the middle of the organisation - people you don’t need to train from the ground up.

Now, each hire takes much more time, carries a far greater risk of failure, and trying to tempt these people in becomes deeply frustrating.

The false solution is to start collecting senior talent like Panini stickers.

You’re quite convinced you know the exact gap you’re filling. You trust your developed recruitment system to open the packets and find the exact sticker you need. Stick one down, pile up the duplicates, and move on to the next packet. You don’t care that you’re sticking in Real Madrid's No.4 – Ramos is completing that page, however obnoxious, and job done. But will the rest of the team thank you? No, they won't. And even worse, you'll likely be the person that suffers the most.

Dropping a Grenade into the Pool

At this stage, in frustration a leader may even find themselves saying things like:

• "Culture doesn’t matter anymore."

• "Skills are far more important than cultural fit."

  
  

When once you recruited a very excellent team on cultural fit and potential – in fact the team that got your business to where it has arrived - you now think you need to swing all the way to skills and knowledge fit only.

You find out how wrong you are the moment you drop a senior person into the pool and watch them rip things apart.

As they rip, you are changed by having to deal with it. The people around them are changed. And because you’ve made very sure that culture is no longer important, that culture isn’t going to come to the rescue either. You've thrown the proverbial baby out with the bathwater.

The Hand on the Tiller

SME leaders, especially those building their first business, get totally and utterly fixated on having their hand on the tiller at all times.

With the exception of the few narcissists who winkle their way into this position, the impetus behind this is entirely admirable. They feel a deep responsibility to their families, their backers, their staff, their clients, their network. The buck stops with them.

But at this inflection point, they totally forget to take a breath, to have a good think, and to ask for help from others. Whether they like it or not, they get hooked on making decisions and driving things forward. And people issues are the thorniest, because they take time and effort, whether most other issues demand less.

This is the best explanation for missing the very obvious way to deal with this inflection in their team: The Three Phases.

• Phase 1: The "Organic Village" (1–50 people)

  You hire heavily on potential and cultural fit.

• Phase 2: The "Small Town" (51–250 people)

  You hire on skills and experience, but you specifically check for counter-cultural behaviours so you don't upset a finely balanced team.

• Phase 3: The "Impersonal City" (250+ people)

  You hire on pure skills and experience. The numbers around a person mean cultural fit is carried by the vast majority, and those who stick out are not disruptive.

The Neglected Phase - the middleground

It is Phase 2 that is neglected. In fact, it is very often missed entirely. Exasperated leaders move straight from Phase 1 to Phase 3, throwing the baby out with the bathwater. The fallout can be excessively disruptive.

But Phase 2 isnt' there to make your life harder - it is to make it a darn sight easier than it was.

So how do you pinpoint these Phase 2 risks before they enter the building? You don't look for technical incompetence; you look for behavioural friction. Where once you were looking for fit, instead you design interviews that specifically flush out the mismatches. Spotting these counter-cultural behaviours isn't about finding flawless angels - it is simply about ensuring their default habits won’t rub your existing team up the wrong way. And it isn't just about keeping the team happy, becuase if you're honest, you don't want to work with someone who thinks blind ambition is of higher value than skill or experience.

So in Phase 1, you look for all the things you really like. In Phase 2, you're honest about the things you really don't. And only in Phase 3 do you say "We no longer need to consider culture at all, because we are of a size where it can stand on its own in our recruitment processes, and we can absorb a few people won't don't fit because of the strength of the team around them". You can save yourself a lot of pain in this way.