When growth creates pressure, adding people can feel like the obvious solution. Often, the better first step is to redesign the work itself.
One of the easiest mistakes for a growing company to make is to confuse a capacity problem with a hiring problem. I learned this while building a business from around €2.5 million in revenue and 15 employees to more than €42 million and over 250 people across 35 countries. My name is Dennis Kuipers, founder of Lancestone and author of the international bestseller Breaking Out of Founder’s Prison. My answer to the hiring question today is simple: before adding another person, redesign the work.
Why does growth so easily lead to more headcount?
The logic seems reasonable. Sales increase, the team becomes busier, customer demands grow and bottlenecks appear. People are working at capacity, so another person is hired.
For a while, the pressure decreases. Then growth continues and the same thing happens again.
This is how companies gradually develop an almost automatic relationship between revenue and headcount. More revenue requires more people. More people require more managers, communication, meetings, systems and coordination. Those things create additional work, which eventually creates demand for even more people.
The company is growing, but an important question is rarely asked: is the business actually getting better?
A larger company is not necessarily a more valuable company. If every additional million in revenue requires a proportional increase in people, costs and organisational complexity, growth may produce surprisingly little operating leverage.
Hiring itself is not the problem. Great people can transform a company. The problem is using recruitment as the default answer before understanding why additional capacity is required.
The vacancy is often visible. The underlying design problem is not.
What should founders do before approving another hire?
Every significant hiring decision should begin by looking at the work rather than the job title.
When additional capacity appears necessary, I would examine the work in five stages:
- Eliminate: Does this work still need to exist?
- Automate or use AI: Can technology perform all or part of it?
- Systemise: Is capacity being consumed because the work depends on individual knowledge or inconsistent ways of working?
- Consolidate: Can activities or responsibilities be combined more intelligently?
- Hire: After redesigning the work, what genuinely requires additional human capability?
The sequence matters.
Companies frequently hire first and then give the new employee responsibility for an existing collection of tasks. Those tasks may include unnecessary reporting, duplicated administration, manual data entry, avoidable internal communication or work created by poorly designed processes.
The company has not solved the inefficiency. It has hired someone to perform it.
AI makes this even more relevant. The opportunity is bigger than giving existing employees AI tools and asking them to become more productive. A more useful question is:
If we were designing this company today, with the technology now available to us, how would we organise the work?
That question can produce a very different organisation.
What did I learn from building a 250-person organisation?
I learned this lesson from experience rather than theory.
My company eventually grew to more than €42 million in revenue, with over 250 employees and operations across 35 countries. At that scale, we began preparing for a planned UK stock-market listing.
During an intensive roadshow with potential investors, I started looking at the company differently. Investors were interested in growth, but also in the quality and predictability of revenue, margins, scalability, risk, dependencies, capital requirements and ultimately the value being created.
That perspective changed my thinking.
We had built a substantial business, but a significant part of our service model was still connected to people and hours. More growth could therefore mean more people, more management and more complexity.
Two weeks before the planned listing, I decided not to proceed. Instead, we fundamentally redesigned the company. We changed elements of the business model, introduced more structure, systems, software and tools, improved the quality of recurring revenue and reconsidered how much organisational capacity we actually needed.
Over time, the organisation moved from around 250 people to approximately 70.
The lesson was not that 70 people are better than 250. The lesson was that headcount is an input, not an achievement.
The right number of people is the number required by a well-designed business model and operating system to deliver the desired result.
When is hiring actually the right answer?
Redesigning work should never become an excuse to avoid investing in people. Sometimes the analysis leads to exactly the opposite conclusion: the company needs a capability it does not currently have.
The founder may need an experienced commercial leader rather than continuing to manage sales personally. The organisation may need an integrator who can translate strategy into execution. A specialist may bring knowledge that would take the existing team years to develop. A strong leader may unlock the capacity of many other people.
These can be exceptionally valuable hires.
The distinction is between hiring capacity and adding capability.
If a company simply has too much poorly designed work, adding another pair of hands can temporarily increase capacity while preserving the underlying problem.
If the next version of the business requires knowledge, judgement, leadership, creativity, relationships or experience that does not currently exist, bringing in the right person can accelerate growth dramatically.
Founders therefore need to ask a better question than, “Who should we hire?”
What capabilities does the business we are trying to build require, and which of those capabilities genuinely need to be provided by people?
Only then should the organisational chart be designed.
How can founders make growth less dependent on people?
There is a broader principle underneath this. A growing company should gradually become better at turning what it knows and does into assets.
Knowledge held by one employee can become a documented method or process. Repeated manual activity can become automation. Expertise can become intellectual property. Bespoke delivery can sometimes become a standardised product. Software can replace coordination. Data can improve decision-making. Recurring revenue can make future income more predictable.
This does not remove the importance of people. It changes where people create the most value.
Human capacity can then be concentrated where judgement, creativity, relationships, leadership and genuinely complex problem-solving matter most.
The same principle applies to the founder. In many growing companies, the founder becomes the ultimate piece of additional capacity. When something breaks, an important customer calls or a difficult decision appears, the issue moves upwards.
That may solve today’s problem quickly, but it can prevent the organisation from developing the capability to solve tomorrow’s problem without the founder.
So there is one final step in the framework:
Do not automatically add yourself to the work either.
Conclusion
Growth will always create new demands, and some should absolutely be solved by hiring exceptional people. But headcount should follow business design rather than substitute for it.
Before opening the next vacancy, examine the work. Eliminate what no longer matters. Use AI and automation where they improve the system. Systemise and consolidate where possible. Then identify the human capabilities the next version of the company truly needs.
The companies that master this will not simply grow bigger. They will learn how to grow with greater leverage, resilience and value.
About the Author
Dennis Kuipers is an entrepreneur, investor, and author of Breaking Out Of Founders’ Prison. Before a successful exit, he scaled his company to €42 million in annual revenue across 35 countries. He is the founder of Lancestone, an international advisory firm working with seven-figure founders who have outgrown the structure they built.
