For the first year or two, governance doesn’t feel like a thing you need. Everyone knows what everyone else is doing. Decisions happen in the room. If something’s unclear, you ask. The whole organisation fits in one conversation.
This works beautifully. It’s fast, flexible, and low-overhead. Nobody’s writing things down because nobody needs to – the context is shared, the understanding is implicit, and everyone who needs to know already knows.
Then you hit somewhere between 30 and 50 people, and it stops working.
Not dramatically. Not obviously. Just quietly, in ways that are hard to pin down. Decisions start taking longer. Things fall through gaps. People aren’t sure who’s responsible for what. The same conversations happen multiple times because there’s no record of what was decided before.
This isn’t failure. It’s scale. What you’re experiencing is the breakdown of “everyone knows” as a governance model.
How “everyone knows” actually works
“Everyone knows” is tacit governance. It doesn’t require documentation, formal decision-making processes, or explicit ownership structures. It works through proximity and shared context.
When you’re small, everyone’s in the same conversations. Everyone sees the same problems. Everyone understands the constraints. When a decision gets made, everyone who needs to know about it was probably in the room, or will hear about it organically within hours.
This creates natural accountability. If Sarah’s handling customer onboarding, everyone knows that. If James owns infrastructure decisions, that’s understood without needing to be written down. Ownership is implicit but functional.
Information flows naturally because the organisation is small enough that there aren’t really information silos. If something important happens, word spreads quickly. There’s no need for formal communication structures because informal communication works fine.
The system is elegant. It’s also completely dependent on everyone having access to the same context.
When shared understanding stops being shared
As you grow, context fragments. Not everyone’s in the same conversations anymore. New people join who weren’t there for the original decisions. Teams form around different priorities. The organisation no longer fits in one room, one meeting, one Slack channel.
Suddenly, “everyone knows” stops being true. What’s obvious to the people who’ve been there from the start isn’t obvious to people who joined six months ago. What’s understood in one team isn’t understood in another. The shared context that made tacit governance work has fragmented.
This creates gaps. Someone makes a decision based on context from their team that conflicts with a decision someone else made based on context from a different team. Neither person knows about the other’s decision because there’s no systematic way of sharing that information.
Or a decision gets made, but six months later nobody can remember exactly what was decided or why, and the people who were in the room have moved to different roles or left the organisation entirely.
The informal system that worked through shared understanding breaks down when understanding stops being shared.
Decisions get made, but not traceable
One of the subtlest signs that “everyone knows” has stopped working is that decisions are still happening, but nobody can trace them afterwards.
Someone asks “why do we do it this way?” and the answer is “I think Sarah decided that” or “we talked about it at some point” or “I’m pretty sure that’s how it’s always worked.” There’s no record. No documentation. No clear rationale that someone can point to.
This becomes a problem when you need to revisit the decision. The context that informed the original choice is lost. You can’t evaluate whether it’s still the right choice because you can’t reconstruct why it seemed right at the time.
It also becomes a problem when you need to defend the decision to external parties. Auditors, customers, insurers, regulators – they ask why you made certain choices, and “everyone knew it made sense at the time” isn’t an answer they can work with.
Good governance isn’t about creating paperwork. It’s about making decisions traceable so you can understand them later, defend them when needed, and change them when the context shifts.
The visibility problem
In small organisations, everything is visible. You can see what everyone’s working on. You can see what decisions are being made. You can see what’s going well and what’s struggling.
This visibility is what makes “everyone knows” work. Accountability happens naturally because problems are obvious. If something’s falling through the cracks, someone notices and picks it up.
As you scale, visibility disappears. You can’t see what everyone’s doing anymore. Teams are working on different things in different contexts. Decisions are being made in conversations you’re not part of. Problems can develop for weeks before anyone outside the immediate team notices.
This loss of visibility is normal. It’s what happens when organisations grow beyond the point where one person can keep the whole thing in their head. But it means you need different mechanisms for maintaining control.
Knowing what you’re protecting becomes critical when you can’t see everything directly anymore. You need systematic ways of understanding what’s happening, not just ad-hoc awareness.
Tribal knowledge becomes a liability
In the “everyone knows” model, tribal knowledge is an asset. The deep understanding that long-tenured people have about how things work, why decisions were made, what the constraints are – that knowledge keeps the organisation running smoothly.
But tribal knowledge doesn’t scale. It lives in people’s heads. It doesn’t transfer to new hires easily. It’s not documented. And when the people who hold it leave, it goes with them.
This creates brittleness. Key decisions depend on specific people knowing specific things. If those people are unavailable – on holiday, off sick, or gone to another company – the decisions can’t be made well because the context is missing.
At small scale, this is manageable. You have redundancy through proximity – multiple people are close enough to the work to pick it up if needed. At larger scale, you don’t have that redundancy anymore. Tribal knowledge becomes single points of failure.
The transition from tribal knowledge to documented understanding is one of the hardest parts of scaling governance. It feels like bureaucracy. It feels like you’re losing the speed and flexibility that made you effective. But without it, you’re building on foundations that will collapse when key people leave.
Why this isn’t failure
When “everyone knows” stops working, it feels like something’s gone wrong. Like you’ve lost discipline, or hired the wrong people, or grown too fast, or compromised on culture.
None of that is true. What’s actually happening is that you’ve reached a scale where informal governance creates more friction than structure would. The system that worked at 15 people doesn’t work at 40. Not because it was bad, but because the conditions that made it effective have changed.
This is a normal transition point. Every growing organisation goes through it. The ones that struggle are the ones that try to force the old model to keep working – either because they don’t recognise it’s broken, or because they’re ideologically opposed to adding structure.
The ones that handle it well recognise the transition for what it is: a signal that the organisation needs more explicit governance, not because structure is inherently good, but because informal has started creating problems.
What comes next
The shift from “everyone knows” to explicit governance doesn’t mean abandoning everything that worked about being small. It means identifying what needs to be formalised and what can stay informal.
Not everything needs documentation. Not every decision needs a formal process. Not every piece of knowledge needs to be captured. The art is knowing which things do.
Start with the areas causing the most friction. Where are decisions getting stuck because ownership is unclear? Where is tribal knowledge creating dependency on specific people? Where are you losing track of what was decided and why?
Add structure there. Not everywhere at once. Just where the absence of clarity is creating real problems.
Risk management isn’t about control – it’s about understanding risk well enough to make good decisions. Decisions still need to happen quickly. The goal isn’t to slow everything down with process. The goal is to remove the ambiguity that’s already slowing things down because nobody’s sure who can decide or what the decision should be based on.
Making decisions visible doesn’t require heavy infrastructure. It requires being intentional about capturing the things that matter – who decided, what they decided, why they decided it, and what information they based it on.
When “everyone knows” breaks down, it’s not because you failed. It’s because you succeeded at growing. The question is whether you respond by adding the right structure, or by pretending the old model still works when it clearly doesn’t.
