Growing Businesses and the Rule of 3
Change Before Change Changes You
Growth is exciting for any business—but it is rarely smooth. In my work as a change and operations consultant, I often see that the biggest challenges don’t come from what a business is doing, but when they choose to act. Most organisations wait until performance drops, systems crack, or teams feel overwhelmed before they begin making changes.
By then, change is no longer a strategic choice. It’s a reaction.
That is why I encourage clients to embrace these principles:
- Change before change changes you.
- Disrupt rather than be disrupted.
One of the most practical frameworks for understanding this is the Rule of 3.
What Is the Rule of 3 in Business Growth?
The Rule of 3 suggests that companies hit predictable friction points every time they triple in size—whether that is revenue, headcount, customers, product lines, or operational complexity.
When a business grows 3x, everything that used to “just work” suddenly doesn’t:
- Communication breaks down
- Workflows become inconsistent and disparate
- Management visibility declines
- Decisions slow down
- Systems built for one phase collapse under the weight of the next
These “multiples of three” are natural, structural tension points—almost like geological pressure building beneath the surface. If leaders do not anticipate them, the organisation feels overwhelmed and reactive.
But when leaders plan for them, these moments become strategic accelerators.
Why the Rule of 3 Matters
At each 3x stage, a business must face a simple truth: The systems that got you here will not get you where you need to be.
What worked at:
- 3 people will not work at 10
- 10 will not work at 30
- 30 will not work at 100
And the same applies to revenue, product lines, customers, and geographic footprint.
Most companies underestimate:
- The speed at which operational strain builds
- The cost of delaying improvements
- How deeply growth alters internal dynamics
- The human impact: burnout, confusion, resistance, turnover
This is why proactive change is not just beneficial—it’s essential. In fact, it should be part of the conceptual business plan before a business has started.
Growing Pains Are Predictable, Not Inevitable
The “pain” of growth is not random. It happens when leaders don’t plan for the redesign of the organisation early enough to match the upcoming scale.
A few examples:
1. Communication
- Start-ups thrive on informal, real-time communication.
- At ~12–15 people, that breaks and you need policies
- By ~30, you need process.
- By ~60, you need structure and systems.
2. Operations
- At first, everyone can see what everyone else is doing.
- At 3x scale, overlaps appear.
- At 9x scale, duplication/redundancies —and costly inefficiencies.
3. Technology
- Manual tools work… until they don’t.
- Then the business drowns in spreadsheets, duplicated data, and slow decision-making; not to mention the inability to easily and efficiently analyse reliable data to respond to market conditions.
4. Leadership
- Founders can no longer manage everything directly, and rarely do they want to.
- Function management and skill leaders becomes essential (see my thoughts on the Circular Organisational Structure: Click to open the article).
- Culture must be intentionally assessed and nurtured, not assumed.
Each of these shifts is predictable. Yet many leaders only face them once the existing system is already breaking.
Planning Before the Pressure Hits
My work focuses on helping businesses design and implement the systems, processes, and operating models they will need next, not the ones that merely fit the present. Future proofing your business is critical at a time when we’ve moved from a S&P 500 company lifespan of about 60 years to today where your large business is expected to last about 20 years. The pace of change is ferocious and you need to be in the drivers seat of that change as it concerns you.
The key is forward visibility.
Before a business triples in size, it should already know:
- Who you are as a business and what culture and ideals you want to embrace.
- What its future structure looks like
- What roles will exist
- What systems need to scale
- What data must be captured
- What processes must be formalised
- How teams will collaborate
- What leadership capabilities need to evolve
This is not bureaucracy, it is strategic preparedness. Modern businesses are agile and dynamic. They collaborate with stakeholders to ensure their best energy is put forward. It is enabling the business to grow without eroding performance, culture, or customer experience.
Disrupt vs. Be Disrupted
Every company faces a choice as it scales:
1. Disrupt intentionally
- You redesign your business before the cracks appear.
- You realign roles, streamline operations, automate intelligently, sharpen communication, and strengthen the organisational core.
- You stay ahead of complexity.
2. Be disrupted
- You wait for the market conditions to become obvious to you that you need to change.
- You might try to resist, as the music industry did with the emergence of streaming music from Spotify and their likes, but you will find yourself on the losing end of that battle.
- Then the market, customers, systems, or internal stress forces the change—usually at a higher cost and under pressure.
One path builds resilience and reveals opportunities, the other exposes vulnerability.
What Businesses Should Do at Each Growth Stage
Here are the most important actions companies should take before hitting their next 3x threshold:
1. Audit Your Business and Market Place (some points to consider):
- Identify what already strains under current load.
- Assess changes in the market and attitudes among your stakeholders, internal as well as external. What is aligned and what is not, and what changes are coming.
- Reflect on your corporate identity and culture, through a mindful process, not from a traditional business perspective; who are you?
- Is the organisational structure fit for purpose and agile to take you into the next phase?
- Review internal stakeholders, are everybody in their right place, and are they aligning with the purpose and culture of the business? Are you hiring for skill or for culture?
- Assume that strain will triple.
2. Map Processes Clearly
- Informality works early on; it collapses later.
- Process clarity and cohesiveness increases speed, not bureaucracy.
3. Strengthen the Data Foundation
- Better data = better decisions.
- Garbage in, garbage out.
- Clean, centralised, and harmonised systems must come early.
4. Redesign Roles and Structure
- The organisation should evolve ahead of headcount, not behind it.
- Rather delay hiring to get it right than to hire out of fear that you will not have filled the position.
- Don’t hire for skill, hire for personal fit. Skills can be learned, personality can’t.
- Plan an agile circular organisational structure with managers focusing on process and data, and leaders focus on skills.
5. Train Leaders for the Next Phase
- Scaling is a leadership evolution game.
- Stay as flat as possible, and don’t promote your best people out of their roles, promote them within their roles to lead their teams.
- Managers should manage processes, data, information, etc., not people, that is the job of skill leaders.
- Most leaders need support to grow with the company; make leadership and coaching training an essential part of your strategy.
6. Introduce Scalable Technology
- Tools must support the next 3x, not the current 1x.
- Data must be in a format where it is easily integrated into future systems
- Salesforce, Hubspot and their ilk are good for what they are, but they are not best in breed in all they do and will not scale in the areas you need them to.
- Focus on best in breed systems and integrations to be able to easily switch out what ever part doesn’t work for you and slot in another without having to redesign your system.
7. Protect and evolve Culture
- Culture erodes silently during scaling, again, hire the person, not the skill.
- Manage and assess, and adjust culture constantly. Rely on your skills and function leaders to be the role models
- Intention and reinforcement keep culture aligned.
My Approach With Clients
I work with organisations to:
- Assess where they currently stand
- Identify the next “Rule of 3” horizon
- Map their operational, cultural, communication, leadership, and system bottlenecks
- Build a clear roadmap for scalable growth
- Implement the structures, processes, and tools that prepare them for their next stage
The goal is simple:
Reduce friction by making people’s jobs easier. Increase clarity of expectations and seek buy-in. Create a business that can grow without breaking.
Final Thought: Anticipate the Next 3x
Growth does not have to feel chaotic. It becomes chaotic only when the business outgrows itself before its leaders can adjust, which is when leaders are too focused on the job at hand and don’t think they have the capacity to zoom out and look at the totality.
The Rule of 3 shows us that scaling friction points are predictable. So are the solutions.
Change early, change deliberately, and change before change changes you.
