Understanding Information Flow Challenges in Scale-ups: the Risk of Silofication A case study of the information flow challenges in scale-ups

Abstract

Scale-up companies play an important role in today’s society contributing to economic growth, innovation, and job creation. Scale-up companies are companies that sustain an annual growth of 20% or more during a three-year period. As scale-ups grow in terms of employees, the number of possible communication paths grows nearly exponentially. With the increasing growth of communication paths, information sharing gets increasingly complex. This case study presents information flow challenges within the engineering department of a Swedish scale-up company. Previous research has been focused on issues caused by a mismatch between the size of the organization and its processes, referred to as growing pains. However, there is a gap on information flow related challenges in scale- ups. Since the information flow gets ever more complex as scale-ups grow, this case study aims to address this research gap. A qualitative case study has been carried out at the mentioned company. The results from a total of 24 interviews have been analyzed with a coding process in accordance with Grounded Theory. The findings indicate that information flow impacts the creation of silos in scale-up companies, as in the case of mature companies. High growth in numbers of employees is a common factor to several of the findings. The high growth in employees makes communication paths increasingly complex, while the information flow processes are not developed to handle the complexity. Moreover, roles and responsibilities need to be adapted to the size of the company, and relying solely on a top- down informal communication flow is not efficient as scale-up companies grow. Previous research has mainly focused on silos between departments; the result from this case study shows that information flow related challenges derived from the company growth can cause silos to form within one function located at one office as well. It is concluded that when a certain company size is reached, there is a need to transition from informal to more formal means of communication.