Every growing business pays a coordination tax that never shows on the P&L. Here’s where it hides — and how to stop overpaying it.
There is a cost in every growing business that never appears as a line item: the cost of keeping everyone aligned. It has no budget code and no owner, so it goes unmeasured — but it is often one of the largest drains on a scaling company’s time. We call it the coordination tax, and almost every business pays more of it than it realises.
The cost that never shows on a P&L
Coordination is all the work that isn’t the work: the meetings, updates, approvals, status messages and “quick syncs” that exist so people can do their actual jobs in concert rather than in conflict. A little of it is essential. Too much of it quietly consumes the day.
The trend is not subtle. Harvard Business Review, drawing on two decades of data, found that the time employees and managers spend on collaborative activities has grown by 50% or more. At many organisations people now spend the majority of their time in meetings, on calls, and answering colleagues’ requests — leaving surprisingly little for the focused work only they can do.
Because none of this is billed anywhere, it accumulates unchecked. A business can add coordination cost for years without a single conversation about whether it is worth it.
Why it compounds so quietly
Coordination cost rises with connections, and connections rise faster than headcount. Add a person, and you don’t add one relationship — you add one to everyone they must work with. Add a team, and you add a web of new handoffs to every team it touches.
That is why the tax compounds. The same growth that makes a business more capable also makes it more connected, and every new connection is another thing to keep aligned. Left alone, coordination expands to fill — and then exceed — the capacity created by hiring. This is a core reason work slows down as businesses grow, and why adding people to a coordination problem tends to make it worse.
Good collaboration versus collaborative overload
The goal is not less collaboration. It is less waste in how a business collaborates. HBR’s research makes the distinction sharp: a small share of employees — often the most capable — absorb a hugely disproportionate share of collaborative demands, becoming bottlenecks that everything waits behind. The value is real, but so is the overload, and it lands on exactly the people you can least afford to slow down.
Useful collaboration moves a decision or a piece of work forward. Overload is everything else: the meeting that could have been a message, the approval that adds a wait but not a judgment, the eight people cc’d “just in case.” Telling them apart is where the savings are.
Reducing the coordination tax
You cannot remove coordination, but you can stop paying for the kind that creates no value:
• Clarify ownership. Most standing meetings exist to align people because no one is sure who decides. Clear decision rights remove the need for much of the alignment.
• Default to asynchronous. Reserve live time for genuine discussion; move status and information-sharing to written updates people can read when it suits them.
• Protect your connectors. Identify the few people everything routes through and deliberately reduce the demands on them, or the whole system slows.
• Put knowledge in the process. When how-things-work lives in documentation rather than in people’s heads, far less coordination is needed to get anything done — the same principle that makes a well-run operational team start the day with clarity instead of catch-up.
The takeaway
Coordination is the price of being an organisation rather than a collection of individuals — but most businesses overpay it without noticing. The ones that stay fast as they scale treat coordination as a cost to be managed, not an unavoidable fact of growth. They keep ownership clear, keep alignment cheap, and make sure their best people spend their time doing the work, not just coordinating it.
Sources
→ Rob Cross, Reb Rebele & Adam Grant, “Collaborative Overload,” Harvard Business Review, January 2016 — hbr.org
→ Michael Mankins & Eric Garton, Time, Talent, Energy (Bain & Company) — bain.com
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