>> Without pockets of expertise, a vast group of mediocre people will drift at times.
I completely agree with each thing you said. I should have been more clear and said "a large company does not need to fill their entire workforce with smart people with tons of experience. Just a few is enough once a good process is in place."
A small company needs very smart people when starting up. They don't have any processes in place and each problem is new.
As companies grow, these experts develop and polish processes. As time goes on, more and more can be done with less capable people.
Not all experts can be eliminated as a company grows. There will always be problems that don't fit the process. An expert is needed for those. A process also needs to adapt with the times. Experts are needed for that.
However, for any class of problem, the pareto principle is in play. An army of mediocre people with an excellent process can handle 80%* of the issues. The remained will need to be handled by experts.
If you have a small company you may need 10 experts to handle X load. You don't need 1000 experts to handle 100x load. You need 20 experts, a good process, and 980 hard working people.
* - numbers depend on actual cases. These values are for illustrative purposes only.