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Why Too Much Informality Hurts Long-Term Scale

Jun 20

3 min read

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What helps you start can quietly sabotage your ability to grow.

A business owner once shared:

“We were five people doing everything. No roles, no job descriptions—just hustle. It worked... until it didn’t.”

Another said:

“I used to approve vendor payments on WhatsApp. Now, with 20 people and 3 locations, things are slipping—and I’m firefighting.”

Welcome to the growing pain of informality.

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In the early days, informality feels efficient.

  • Decisions are quick

  • Communication is fluid

  • Everyone does everything

But as your business scales, the very same informality turns into:

  • Confusion

  • Delays

  • Founder bottlenecks

  • Burnout

Let’s break down why informality feels helpful at first—and why it becomes the hidden enemy of sustainable scale.


Step 1: Informality Is an Advantage—Up to a Point

In the startup stage, informality works because:

  • Teams are small

  • Communication is direct

  • Roles are flexible

  • Trust levels are high

You move fast because you don’t need permission, processes, or paperwork.

But this only works until volume, complexity, or people count increases.

Beyond that point, what was once agile becomes fragile.


Step 2: Signs That Informality Is Hurting You Now

✅ Decisions get delayed unless the founder intervenes

✅ Tasks fall through the cracks—because “someone thought someone else was doing it”

✅ Approvals are inconsistent or undocumented

✅ New hires are confused about expectations

✅ Vendor or client issues take longer to resolve

These aren’t people problems.

They’re structure problems.


Step 3: Why Informality Blocks Scale

🔁 No role clarity → accountability diffuses

📦 No process documentation → onboarding is slow and error-prone

💬 No structured communication → internal loops get lost

💸 No financial discipline → spending happens by instinct, not policy

🧠 No delegation frameworks → everything comes back to the founder

You can’t scale a business that only runs when you’re watching it.


Step 4: Structure Doesn’t Mean Bureaucracy

Many founders avoid formality because they fear:

“We’ll become corporate.” “Things will slow down.” “People will feel controlled.”

But structure ≠ red tape.

Structure =

  • Clear roles

  • Documented processes

  • Transparent communication loops

  • Repeatable systems

These aren’t constraints. They’re freedom enablers.


Step 5: Where to Formalize First (Without Killing Speed)

Start small:

Area

Informal Today

Formal Next Step

Payments

WhatsApp approval

Google Form with limits + email trail

Hiring

Gut feel + referrals

Basic JD + 2-step interview + trial task

Onboarding

Verbal brief

Checklist + 1-pager SOP

Team roles

“Everyone helps”

Defined outcomes per role

Meetings

Ad hoc, founder-led

Weekly check-in with agenda + notes

Structure lets teams operate independently, so the founder can think strategically—not constantly intervene.


Step 6: Review Structure Every 6–12 Months

As you grow:

  • What worked at 5 people won’t work at 25

  • What worked at ₹50L revenue won’t work at ₹5Cr

  • New hires need clarity, not chaos

Every 6–12 months:

  • Review systems

  • Upgrade what’s not scaling

  • Ask: “Where is informality creating friction?”

This turns structure into a living asset—not a one-time exercise.


TL;DR – Too Long; Didn’t Read

  • Informality works in early stages—but breaks when team size or business complexity increases.

  • Signs of trouble: delays, founder bottlenecks, onboarding confusion, approval chaos.

  • Structure doesn’t mean slow—it means scalable.

  • Start by formalizing payments, roles, communication, and onboarding.

  • Review systems every 6–12 months and upgrade gradually.


You don’t need to turn your business into a corporate giant.

But you do need systems that work even when you’re offline.

Because freedom doesn't come from being informal.

It comes from building a business that doesn’t collapse without you.

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