The Cycle: Why Organizations Rotate Through the 2/3 Pattern
This is the question I keep coming back to. Lencioni says organizational health is the ultimate competitive advantage. Jim Collins talks about "First who, then what."
But I've been reflecting on whether this is even possible, or if we're dealing with something more fundamental about how complex systems work.
What I think I'm realizing is that this isn't about phases you pass through once. Organizations navigate this loop continuously throughout their existence. Even mature companies cycle through these patterns as they face new challenges, market shifts, or leadership changes.
What if the answer involves recognizing that organizations move through cycles? What if the 2/3 pattern isn't a permanent trade-off, but a loop you can navigate intentionally?
Maybe it's about phases?
I've started wondering if all three can coexist, but only in cycles. Here's what I've been thinking:
Phase 1 (0–10 people)
Leadership + Team dominate. Strategy is mostly a hunch. At this stage, you don't need deep strategy, you need alignment and trust. The team is small enough that leadership can directly influence everyone, and strategy emerges through experimentation.
Phase 2 (10–50)
Strategy + Product take center stage. Team friction emerges as you scale. You've proven something works, and now you need to scale it. But scaling requires focus, you can't optimize for everything. The team that worked at 10 people doesn't automatically work at 30. New people bring new dynamics, and the old cohesion breaks down.
Phase 3 (50–200)
Team health must be rebuilt intentionally or execution collapses. By now, strategy is established, but the team has become fragmented. You can't scale through personal relationships anymore, you need systems. But those systems feel impersonal, and trust erodes.
And then the cycle repeats. As you enter Phase 3, you might find that Leadership + Team becomes critical again. You need strong leadership to rebuild the team culture that got lost during scaling. Or you might discover that your strategy needs a major pivot, shifting you back to Leadership + Strategy. The point isn't that you're stuck in one configuration forever, but that you're constantly rotating through them.
I've seen this cycle play out. But here's what's interesting: the weak pillar doesn't disappear, it's more that different phases require different balances. The system itself forces you to prioritize, but that prioritization can shift over time.
I should mention: when I was writing this, I debated whether to correlate these phases to the number of people in the organization. I think it gives helpful context for first-time understanding; these patterns often show up at different scales. But I think the important thing is realizing this is a cycle. It happens in sub-systems within larger companies too. A product team within a 500-person company can go through these phases. A department can cycle through them. Even individual projects can show this pattern. It's not just about organizational size, it's about how systems prioritize and adapt. A new market threat forces Leadership + Strategy. Team burnout after a major push forces Leadership + Team. Stagnation forces Strategy + Team. The loop continues because the system itself creates the conditions that require rotation.
This continuous loop explains why leadership changes are so disruptive. When a new leader comes in, they're often responding to the weak pillar the previous leader let slide. A CEO who focused on Leadership + Strategy gets replaced by someone who prioritizes Leadership + Team because team burnout became unsustainable. The new leader isn't fixing what was broken. They're rotating the focus to a different part of the loop. That's why it can feel like the previous leadership was completely wrong. They weren't wrong. They were optimizing for a different combination.
Or maybe it's about attention and energy?
I've been thinking about this from a systems perspective. Seeing organizations as finite systems with limited attention, limited energy, limited capacity for change. When you optimize for two pillars, you're directing that attention and energy in specific ways. The third pillar isn't just passively "weaker", it's actively getting less reinforcement in the system's feedback loops.
In Denmark, our emphasis on balance helps mitigate this. Flat structures reduce leadership silos, and laws like 37-hour weeks force sustainable teams. But even here, I've seen the 2/3 pattern. So I think the constraints are real, even with good intentions and resources.
The big question
Can mature orgs with resources get all three? Or is it always about consciously managing the weak link? I'm leaning toward the latter, not because it's impossible, but because it might be that healthy organizations are the ones that know which pillar is weak and actively mitigate it, rather than pretending all three are strong.
I've seen very few organisations push all three, but I did see one. New leadership came in, correctly spotting that ultimately it's people that drive organisations. They started building a stronger team with better competencies, removed the leadership that was there by coincidence, and also focused on strategy. What happened was that the few leaders left started leaving as they took over teams they hadn't set. Because they were being asked to build on a strategy with a team that fundamentally wasn't built for anything but compliance. The leadership was trying to optimize for Leadership + Strategy + Team simultaneously, but the team's foundation couldn't support the strategic direction. The system collapsed under the weight of trying to maintain all three pillars at once.
The key insight
Healthy organizations recognize which pillar needs attention at which stage, and they actively rotate their focus. They understand they're navigating a loop that requires ongoing attention. They dare make choices that prioritizes, and most important down prioritizes.
I'm curious, does this hold in your context? In remote-first teams? In AI-driven engineering? Have you seen exceptions? Have you noticed your organization cycling through these patterns?
#Leadership #OrganizationalHealth #Scaling #TeamDynamics