Company Growth Without Breakdown

What works in a 10-person startup often fails in a 50-person company. Leadership becomes the art of enabling others to lead, communicate, and stay connected through change. The Growth Model by Larry E. Greiner describes six phases that organizations typically go through. Each separated by a crisis which are make-or-break moments. They require transformation leadership. In this article, we walk you through the five crises in Greiner’s model, the specific leadership challenges they pose, and how you as a leader can overcome them. You’ll also gain insights from Stephan Neumann, CEO of Munich-based BERNS Engineers, who shares lessons learned from scaling the company in the latest episode of the viadoo ChangeCAST.

1. Leadership Crisis: When founders must let go

Typical challenges: In the early stages of a start-up, founders make all the decisions – and of course all the work. People are motivated intrinsicly, leadership and communication are informal. Everyone has a highliy degree of freedom. But as the team grows, this becomes a bottleneck. Communication, execution slows down. Decisions stall. Teams wait for direction.

Stephan Neumann’s advice:

• To prevent the company from becoming dependent on him, he established business units early on. That allowed them to manage many client projects in parallel.
• He also encouraged colleagues to take on voluntary internal roles – from HR and training to travel coordination and compliance – based on their personal interests. That distributed responsibility without needing rigid hierarchies.

More leadership tips:

• Recognize when you are the bottleneck.
• Delegate not just tasks, but authority.
• Create structures where others can lead – with clear parameters and trust.

2. Autonomy Crisis: Freedom turns into fragmentation

Typical challenges: Adding new business units and middle managers creates hierarchy, formal communication, reduces freedom. Start-ups become SMEs. As a consequence, middle managers demand more freedom. They need autonomy to lead, follow their own rules, drift in silos and different directions, and the company’s cohesion suffers.

Leadership tips:

• Encourage autonomy, but build bridges between teams.
• Cross-functional roles and shared responsibilities can foster communication and alignment beyond silos.

3. Control Crisis: Values fade and alignment suffers

Typical challenges: As SMEs expand, shared values and goals become blurred. Different interpretations of culture and priorities cause friction, and middle managers are often left to lead without sufficient support. There is a loss of coordination and consistency.

Stephan Neumann’s advice:

• While his business units were effective they started developing their own cultures. Assigning internal roles across teams helped reconnect people and kept the culture coherent.
• When Stephan sensed that the shared company purpose was fading, he started to work with viadoo’s business partner and psychologist Verena Schinerl to create a strong company mission statement.
• Verena also supported BERNS leadership team with training in psychological safety, communication, and conflict management. That helped to re-anchor leadership as a unifying force.

More leadership tips:

• Don’t rely on structure alone. Invest in defining and reinforcing your core values.
• Provide leadership training and communication tools that help teams lead with clarity, empathy, and purpose.

4. Red Tape Crisis: Processes kill performance

Typical challenges: As they lkeep growing, small and medium-sized enterprises become large companies or even corporate groups. Limits of internal growth have been reached. Complexity increases, so do rules, forms, and approvals. Everything must be documented, approved, and double-checked. Decision-making slows. Employees feel like cogs in a machine. What meant to bring structure ends up stifling creativity and agility. Moral and identification drop.

Leadership tips:

• Audit your processes regularly with a cross-functional team. Are certain processes still relevant?What truly adds value?
• Empower decision-making at lower levels by establishing a risk-tolerance. Tell your team: “We can tolerate smart mistakes. We can’t tolerate inertia.”
• Replace overregulation with agile principles – lean pilots, clear decision-making frameworks, and flexibility where it counts.

5. Complexity Crisis: No one knows who’s in charge

Typical challenges: As limits of internal growth are reached, corporate groups start to build alliances and operate in networks – across countries, departments, and project teams. Responsibility becomes unclear, and coordination efforts explode. Everything is connected – and no one knows who’s in charge of what. Communication loops spiral. Decisions are stalled. Conflicts and duplicated efforts arise. That is typical for large organizations.

Leadership tips:

• Use the RACI Matrix proactively. It helps you clearly define who is responsible for what – especially in transformation or cross-functional initiatives. RACI stands for:

• • R = Responsible – Who performs the task?

  • A = Accountable – Who owns the outcome?

  • C = Consulted – Who must be involved or asked for input?

  • I = Informed – Who needs to be kept in the loop?

Why it matters for leaders:

• • Prevents double work and finger-pointing

  • Helps define expectations in complex teams

  • Enables faster decision-making and accountability

  • Especially useful during scaling, restructuring, or change projects

• Establish ‘Single Points of Truth’: Assign clear accountability for each project, process, and KPI even in overlapping structures. Use dashboards or shared documentation to prevent “version wars” in information.
• Use OKRs (Objectives & Key Results) or similar methods to focus teams and reduce overlap.

ChangeCAST with Stephan Neumann (Video)

How exactly do you guide a rapidly growing company through the critical phases of growth? In this episode of viadoo ChangeCAST, we talk about precisely this topic, based on Larry E. Greiner’s growth phases. Our guest: Stephan Neumann, CEO of BERNS Engineers GmbH, who has made the leap from start-up to medium-sized company. In just eight years, the team has quadrupled in size and experienced the classic growing pains. In conversation with ChangeCAST host Dr. Dominik Faust and Dipl.-Psych. Verena Schinerl, Neumann openly describes how he mastered the growing complexity, particularly with the establishment of business units, the delegation of internal tasks, and the establishment of a common set of values. Comprehensive. Practical. In just 30 minutes.