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Here's the answer – or rather, the answers:
Late Harvard professor and eminent team scholar J.R. Hackmann says a perfect team consists of less than ten with a strong preference for no more than six team members.[i] Jeff Bezos’s two-pizza team rule is notorious, suggesting a size of around six team members (depending on appetite and energy required). Jon Katzenbach, author of several team business book classics, agrees. Most high-performing teams he’s observed had been single digit, and hardly ever counted beyond 20 to 25, he states.[ii]
Team size and agility
Linking the question of team size to overall organizational agility, it’s interesting to note that the agile organizing approach of “tribes and squads” – as practiced by Spotify and as being adapted by companies such as ING – limits “squads” (as the basic unit of value delivery and task completion) to a maximum number of up to nine members, in line with the single-digit rule. Stanford professor Bob Sutton agrees: His magic team size number is seven (plus or minus two). In my own university courses (in contrast to lectures) I limit team size to maximum six but preferably four students with a preference to keep the overall class size at maximum sixteen.
Common wisdom is to keep teams smaller than ten
What’s the argument behind this and why does it need to be emphasized? Let’s answer the second question first: Managers still too often think that larger teams are better because you can get more work done if you have more people. And that’s true, discounting for the Ringelmann effect, named after a 19th century French engineer. Ringelmann observed that adding people to rope pulling teams resulted in a rise of the total force generated by the group while the average force per group member declined. Group members appeared to engage in “social loafing”, meaning hiding behind (or rather within) the group instead of putting in their best effort. But the increase in total force is only relevant as long as the task isn’t complex (as in rope pulling) and as long as work done by team members isn’t interdependent. Task interdependence, however, is the very signature characteristic of ‘real’ teams.
Task interdependence leads to the key argument behind small teams
If team members need to coordinate interdependent tasks, they often need to do so in one-on-one relationships. The number of those relationships grows almost exponentially as team size grows, along the function r = n*(n-1)/(2). Here are some examples of the effect:
It has also been shown empirically, that even engagement of all team members with each other (and not only the leader) is a strong predictor of team performance. This even engagement evidently becomes much harder to bring about in larger teams. Other effects are “relational loss”, the effect that “larger teams diminish perceptions of available support which would otherwise buffer stressful experiences and promote performance”; and the “team scaling fallacy”, the phenomenon that, “as team size increases, people increasingly underestimate the number of labor hours required to complete projects.”
When it comes to teams, small is indeed beautiful
However, there may be drivers of a larger team size, e.g. sheer workload and scope of a project. Other drivers may be calls for representation, with functions or divisions demanding a seat on the table. Such demands may be political in some cases, but often are very legitimate. Imagine pharma development teams which require that a whole variety of functions have a say in many decisions. The challenge then is to remain true to a small team size (and observe other key elements of designing high-performing teams), while devising mechanisms to scale, coordinate, and make decisions between teams.
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[i] Couto, D. (2009) Why Teams Don't Work. Interview with J. Richard Hackman, Harvard Business Review (May).
[ii] Katzenbach J.R.; Smith, D.K. (1993) The Wisdom of Teams. Creating the High-Performance Organization. London: McGraw.