In the town I grew up in in Iowa, there was a rutted, bumpy, unmarked dirt path across a cornfield that had been used as a shortcut to Highway 61 south of town since I was young. It was called the “Cow Path” and saved a good 5 minutes off of a trip to Wapello, if you were willing to risk destroying your truck’s suspension system. Technically it was private property, but no one cared.

Over time, the Cow Path got more and more popular. Soon, teenagers were running it in their pickups as fast as they could, for fun. Eventually, the cow path got too popular, the price of corn and liability insurance too high and the path was plowed under, and planted with corn.

As high trust, low headcount organizations scale, they inadvertently force their most trustworthy employees into a conundrum similar to that of the cow path’s owners. The employees are forced to choose between the older, faster, unofficial ways of doing things-taking the cow path to Wapello -and following an organization’s rules that were put in place as the organization grew and was no longer able to rely on uniform trustworthiness.

There is a distinction in Silicon Valley between a startup person and a “Big Company” (BigCo) person. Startup executives detest politics (I think of business politics as (time spent managing irrational egos/total time)), and big company people love to prattle on about business terminology that doesn’t mean anything, and implement new rules. Organizations grow, add layers of bureaucracy and begins to resemble other companies. The scale leads to lower trust; self policing and decision making become increasingly difficult as the liability from one additional bad actor doesn’t outweigh the marginal benefit of freedom.

Companies keep adding Byzantine rules and processes as they scale, which forces early employees to either prove they care about the company by breaking the new rules, or prove they are trustworthy, but don’t care about the company, by honoring the new rules. Which, paradoxically, makes them less trustworthy.

For instance if an early engineer at a company could purchase a new tool without approval, so long as he thought he needed it, and now has to wait three weeks for a supervisor to sign off, the best thing for the company is for the engineer to just purchase the software on the company card and deal with consequences later. But if the engineer purchases the software, he will be perceived as low trust by the org, while engaging in trustworthy behavior for the betterment of the entire org!

Action without waiting for organizational approval is the simplest example of this concept. So are informality in communication, lack of documentation, taking time off without supervisor approval, controversial marketing statements, and many other actions.

As well-trod cow paths get plowed up and replaced by rules, startup people leave in droves. There is a way to save the cow path: hire trustworthy people, and de-centralize the company further as it scales.