As companies grow, complexity and bureaucracy grow as well. As bureaucracy grows, agility, responsiveness and vitality decrease.

It’s an old story we’ve seen repeated many times—but the companies that are booming in this new economy have found a way off this ride.

They’ve uncovered—and exploited—a flaw in the premise that the only way to regulate the rising chaos of complexity is by adding regulations. Most organizations assume that growing complexity is the problem. It’s actually just a symptom.

Growing complexity only becomes an issue when it surpasses the ability of your people to handle it. Small businesses—where most businesses start—thrive because they operate in a low-complexity, high-talent environment. Simply trying to confine the chaos with rules is just treating the symptom. Instead focus on maintaining a high talent to complexity ratio.

As long as you can attract and retain enough quality people to off-balance your growing complexity, you’ll remain an agile and innovative organization—regardless of your size. A few ideas on managing that ratio:

1. Develop your Talent. Offer competitive salaries. Treat your top performers well. Offer them the freedom and tools to make a huge difference. Stick to your values and concentrate on your culture.

2. Prune your Bureaucracy. Choose simplicity over complexity. Review your system regularly for “policy creep” and get rid of it. Where you can, consider a values-based approach versus a policy-driven approach to aligning everyone’s behavior.

Bottom line, to stay relevant and responsive in today’s world, you’ve got to grow your people faster than you grow your business.

How is the talent to complexity ratio in your organization? What can you do to increase it?