The Top 5 Mistakes Companies Make When Scaling and How to Avoid Them

Scaling is one of the most defining and high-stakes phases in a company’s journey. Done well, it provides access to new markets, strengthens your brand, and drives exponential revenue growth. Done poorly, it often leads to internal breakdowns, high staff turnover, customer dissatisfaction, and in some cases, business failure. According to the Startup Genome Report, 70% of startups fail because they scale too quickly without the right infrastructure in place. At Selby Jennings, we’ve helped numerous companies scale successfully through talent, witnessed the common mistakes businesses make during rapid growth, and guided them in avoiding these pitfalls by having the right people in place.

Mistake 1: Skipping systems and hoping for the best

One of the first growing pains companies encounter is the lack of documented processes and scalable systems. When teams are small, it’s easy to rely on informal communication and ad hoc workflows. But as headcount increases and operations expand, the absence of structure can cause serious issues. Inconsistent service delivery, onboarding inefficiencies, and misaligned priorities start to emerge affecting both internal performance and the customer experience.

In a recent blog from the Six Sigma Global Institute (2024), it’s noted that companies with clearly defined and optimised processes can reduce operational costs by up to 30%, while also improving productivity and service consistency. To avoid growing in a disorganised way, companies should proactively document current workflows, identify inefficiencies, and implement scalable tools such as CRM systems, ERPs, and automation platforms that can adapt as the organisation expands. Equally critical is training teams to use these systems effectively and conducting regular process reviews to ensure they continue supporting business objectives. 

Mistake 2: Hiring for hope instead of reality

Hiring is often one of the first areas to accelerate during a growth phase, but bringing in too many people too soon can be just as damaging as scaling too slowly. It is tempting to anticipate future needs and build out teams in advance, but this approach frequently results in inflated headcount, budgetary pressure, and eventually, difficult decisions around restructuring.

Companies that scale successfully take a more measured approach by aligning hiring decisions with real, trackable business milestones rather than projections or optimistic forecasts. By tying recruitment to confirmed revenue growth, market entry timelines, or customer acquisition goals, businesses can avoid premature expansion. Flexibility is also key. Leveraging interim or contract professionals allows for agility during uncertain periods, while cross-training staff creates a more adaptable team capable of covering multiple functions as the organisation evolves. Strategic workforce planning, grounded in actual performance and demand, ensures talent growth supports rather than outpaces the wider business strategy.

Mistake 3: Letting customer experience slip

When a business focuses internally on hiring, infrastructure, or operational change, it is easy to lose sight of the customer. While your internal world is evolving, your customers are still interacting with your brand in real time. If their experience starts to suffer, their loyalty can disappear just as quickly. Even long-standing customers are unlikely to tolerate delays, unresponsiveness, or a drop in service quality.

According to HubSpot, 88% of customers say the experience a company provides is as important as its products or services. That means even during high-growth periods, customer experience must remain a strategic priority. Companies that maintain consistent feedback loops through surveys, reviews, or direct outreach can stay attuned to shifting needs and expectations. As the user base grows, the support function must grow with it, whether that involves expanding the service team, enhancing self-service tools, or introducing scalable systems like live chat and ticketing platforms. Technology can help personalise interactions and improve response times, but the human element remains critical. Frontline staff need to be equipped to resolve issues quickly and with empathy. Businesses that manage to scale while preserving a high standard of service will build lasting loyalty that strengthens their competitive edge.

Mistake 4: Launching big without testing small

The allure of rapid market expansion is powerful. Whether it’s launching a new product or entering a new region, bold moves often feel like the mark of a scaling business. However, expanding without testing is a high-risk gamble. According to CB Insights, 35% of startup failures are due to a lack of market need, highlighting the danger of assuming demand before it’s been validated.

Before committing to large-scale rollouts, smart companies take a test-and-learn approach. This might mean piloting a new product in a single region, launching a service to a specific customer segment, or trialing pricing strategies in controlled environments. What matters is that the feedback loop is short, and insights are actionable. Businesses should establish success metrics before launching, collect real-time performance data, and be prepared to iterate quickly. This measured approach allows for smarter resource allocation, reduces costly missteps, and ultimately results in more effective long-term growth.

Mistake 5: Trying to do it all from the top

As organisations scale, leadership must evolve. Founders and senior executives who once wore multiple hats need to transition from hands-on operators to strategic enablers. However, many resist this shift—either due to habit, or a belief that they are best equipped to make every critical decision. This creates bottlenecks at the top and undermines team performance. Gallup found that companies with high delegation effectiveness grow 112% faster than those where decision-making remains centralised.

To scale sustainably, businesses need to empower their next tier of leaders. This involves clearly defining roles and responsibilities, developing mid-level managers who can take ownership, and creating a culture of trust through consistent communication and shared goals.

Scaling without the setbacks

Scaling is not just about growing fast; it’s about growing smart. The companies that succeed are those that lay the groundwork before they accelerate. They invest in scalable systems, make data-driven hiring decisions, protect the customer experience, test before expanding, and develop internal leaders who can carry the weight of growth.

Avoiding these five common mistakes can be the difference between thriving and merely surviving. At Selby Jennings, we partner with high-growth companies to help them build the teams they need to scale with confidence. From fintech to investment management, our track record spans industries and markets and our focus is always on aligning talent strategy with business goals. You can explore how we’ve helped businesses like yours through our case studies.

Looking to scale smarter? Let’s talk about how we can support your next phase of growth today, and for the long term.