In 2019, two Dutch entrepreneurs founded an environmental, social, and governance (ESG) consulting firm with six like-minded friends and former classmates. United by a shared vision to transform their industry, the close-knit team members poured themselves into the venture, working long hours and celebrating every small win.

Within a year, their growing success led to the hiring of nine additional employees. By the end of 2022, the firm had expanded to 147 employees, bringing in a wide range of expertise, functional specializations, and international knowledge to meet surging demand.

This phenomenal success came at a cost, however. As the company scaled, the very qualities that had driven its early success — homogeneity, cohesion, and easy collaboration — began to erode. Tensions surfaced. Operations were disrupted, and four of the original six members eventually departed.

Such challenges are not unique. Rather, they are emblematic of a recurring pain point we have identified through our combined decades of research on high-growth ventures and our advisory work with over 25 growing companies across Europe and Asia. We’ve observed that rapid growth often leads to a breakdown in unity due to divisions that emerge between early joiners and newcomers.

We term this phenomenon the growth fault line: the paradox whereby the initial homogeneity that fuels strong connections and rapid growth must give way to growing heterogeneity, requiring a departure from the very culture that once drove the organization’s success. We’ve identified three ways for leaders to combat this division and thrive during times of expansion: They must actively work to create a shared language, foster a shared identity, and encourage a culture of dissent.