How to Upgrade Your Scaling SMB’s Operating System Without Losing Agility

Growth is supposed to feel like acceleration. For most companies with 50-500 employees, it feels like wading through mud.

You added people, more layers, and “responsible adults.” But instead of getting faster, you got slower. Predictability is down, and coordination overhead is overwhelming your top talent.

I was discussing this exact problem with Dave West on the Scrum.org podcast, as part of a series focused on how agility can help small and medium-sized businesses tackle their growth challenges. We agreed: scaling doesn’t have to mean slowing down, but it almost always does. It’s because leaders fail to address four systemic traps.

How to Upgrade Your Scaling SMBs Operating System Without Losing Agility – Scaling w/ Agility Podcast

At some point on the growth journey, most leaders reach a point at which they upgrade their organization’s operating system. (even if they don’t explicitly call it that)Way too often, this upgrade doesn’t result in immediate acceleration and traction. In many cases, it feels like the organization is working FOR the new structures and ways of working, rather than the other way around.The processes often seem too rigid and theatrical, rather than outcome-oriented.In this crossover episode with the Scrum.org Community Podcast, Yuval Yeret joins Scrum.org CEO Dave West to unpack why adding these operating systems often slows down most companies instead of making them faster: * The Founder’s Trap: Why the skills that get you to 30 people (and product-market fit) are the wrong skills to get you to 100.* Functional Fiefdoms: How organizing by “departments” (Sales, Marketing, Product) optimizes for silos and guarantees systemic slowdowns.* The “Responsible Adult” Problem: When new leaders, hired to bring order, inadvertently introduce bureaucracy that stifles the system.* Scaling Framework “Theater”: Why so many implementations of EOS, Scaling Up, and OKRs become activity checklists—and how you’re likely serving the framework instead of it serving you.* The Pragmatic Fix: How to break the bottleneck by organizing cross-functional teams around outcomes (like “pipeline health”) instead of org charts.00:00 Introduction: The Paradox of Growth00:37 Scaling Challenges in Startups02:44 The Role of Responsible Adults in Scaling03:21 Why Scaling Slows Down Organizations12:18 Cross-Functional Teams and Market Segments20:29 Operating Systems for Scaling36:19 Final Thoughts and ReflectionsInterested in a deeper dive? Explore the role of operating systems and frameworks in regaining organizational traction – https://yuvalyeret.com/resources/mastering-organizational-traction-trail-map/This podcast episode was recorded and published originally on the Scrum.org Community podcast: https://www.scrum.org/resources/scaling-smbs-without-losing-agility This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit yuvalyeret.substack.com

Here’s the pragmatic breakdown.

1. Your ‘Founder Brain’ Is Now the Bottleneck. The skills that got you from 10 to 30 people (hustle, intuition, product-market fit) are not the skills that get you to 100 or 300 (operating as a system). Early-stage leaders who excel at building often hit a ceiling when they need to enable a multi-team organization. The system is now too complex for a single person to manage. It’s time to scale up.

2. You Optimized for Silos, Not for Value. As you added functions—Sales, Marketing, Product, Ops—you built functional fiefdoms. Now, each department hits its own scorecard, but the customer waits. You’re spending more time in “alignment” meetings than on execution because value flow is breaking down at every handoff. You’re optimizing locally while the system slows globally.

Instead of defaulting to departments, organize around outcomes. A cross-functional “Pipeline Health” team, for instance, will consistently outperform disconnected Sales and Marketing units trying to “coordinate” via endless meetings. Your collaboration structures should reflect the flow of value, not a list of functions.

4. Your Scaling Framework Became a ‘Responsibility’ Checklist EOS, Scaling Up, D4X… these frameworks can be helpful. But too often organizations end up serving the framework instead of making it serve them. You’re treating “rocks” and scorecards as activity trackers, not as measures of real-world traction. All of these frameworks can benefit from a healthy dose of outcome orientation, aligned autonomy and evidence-based management.

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