Scaling without breaking: How HR can help businesses grow without adding complexity

Growth is usually the goal, but as organisations get bigger, the way they operate inevitably becomes more complicated. More people means more decisions, more management layers and more points of communication. Structures that worked perfectly well with 50 employees can start to creak at 100, while founders and senior leaders who once had visibility across almost everything can suddenly find themselves becoming a bottleneck.

The challenge is how to introduce enough structure to support growth without losing the speed, accountability and entrepreneurial thinking that made the business successful in the first place.

That was the focus of our recent Scaling Without Breaking webinar, hosted by Macmillan Davies’ Chris Pestell and Ant Coen, alongside HR leaders Sarah Tanner and Justine Whitaker. The conversation covered organisational design, leadership, commercial HR and AI, with one theme running throughout: successful scaling depends on clarity.

Growth exposes the cracks

When businesses are small, a certain amount of informality works. People know who to ask, decisions happen quickly and responsibilities can overlap because everyone has a good understanding of what needs to be done.

As headcount increases, those informal ways of working become harder to sustain. Responsibilities become less clear, decisions take longer, teams duplicate work and senior leaders become involved in decisions that should be happening elsewhere.

For HR leaders, the focus should be on understanding what is causing that friction rather than adding another process every time a problem appears. Where are decisions slowing down? Where is work being repeated? Where are people frustrated? These are often the places where organisational design needs attention.

Structure should remove friction

Scaling businesses need structure, but that doesn't automatically mean more policies, approval stages and governance. Done well, structure should make it easier for people to understand what they are responsible for, where decisions sit and how work gets done.

As Sarah discussed during the session, governance can start lightly. It might simply mean agreeing how meetings work, who owns particular decisions and how performance is managed. If a new process simply adds another stage, meeting or approval without improving the outcome, it may be adding to the problem.

This becomes particularly important as organisations adopt AI. Rather than creating separate layers of governance around new technology, appropriate controls can be built into existing workflows, helping businesses manage risk without unnecessarily slowing innovation.

Are we asking too much of managers?

Middle management is often where the pressure created by growth becomes most visible. Managers can be expected to translate strategy, manage performance, develop their teams, solve operational problems, deal with escalations and, in many businesses, continue delivering their own individual workload.

When that layer struggles, the immediate conclusion can be that the organisation has the wrong managers. Sometimes that will be true, but it is also worth asking whether the role itself has become unrealistic.

Justine described middle managers as the "human glue" holding organisations together. If managers are constantly compensating for unclear responsibilities, broken processes or gaps between teams, capability alone isn't going to solve the problem.

Businesses need to consider what managers genuinely need to own, which decisions should sit with them and where responsibilities could be simplified. As technology takes on more routine coordination and administration, managers can spend more time applying judgement, developing capability and making decisions closer to the customer.

Commercial HR starts with understanding the business

For HR to play a meaningful role in these decisions, it needs to understand the commercial context behind them. Turnover, engagement, absence and time-to-hire can all be useful measures, but their real value comes from understanding what they mean for business performance.

If a vacancy remains open for three months, what does that mean for revenue or delivery? If headcount increases, what happens to margin? Where are skills shortages preventing growth?

During the webinar, Justine described commerciality as understanding how a business makes money, where value is created, where costs sit and where the bottlenecks are, before connecting people decisions back to those factors. Sarah also shared her experience of working closely with finance to connect people costs directly with revenue.

A board doesn't necessarily need another HR dashboard. It needs the right information to make better business decisions.

What does AI mean for HR?

The conversation around AI shouldn't start with which tools HR should buy. It should start with the work itself: what needs to happen, which parts require human judgement, what could be automated and where technology could remove unnecessary administration.

There isn't a finished playbook. For HR leaders, the priority is staying close enough to developments to understand how changing technology could affect roles, skills and organisational design, while making sure the right controls are in place.

This isn't solely an IT conversation. If technology changes how work gets done, HR needs to be part of shaping what that means for people and the organisation.

Building the HR capability businesses need next

At Macmillan Davies, we work with organisations at every stage of growth, from businesses building their people capability for the first time to established organisations reshaping their HR operating models and leadership teams. We recruit across permanent, interim, fixed-term and executive HR appointments, giving us a close view of how expectations of HR professionals are changing.

Increasingly, organisations need HR leaders who understand the business behind the function; people who can work alongside CEOs, CFOs and leadership teams, connect workforce decisions with commercial priorities and understand organisational design, transformation and technology.

For businesses preparing for their next stage of growth, getting that capability in place early can make the difference between simply getting bigger and scaling sustainably.

If you're reviewing the shape of your HR team, building capability for growth or looking for your next HR leader, speak to the Macmillan Davies team about the talent you'll need for what comes next.

Get in touch

If you would like to discuss this article, for further insights into the HR market, or talk about your search for work or recruitment needs, please contact Chris Pestell directly at cpestell@mdhr.co.uk or connect with him on LinkedIn.