pizza night
🍕Monday night is not the night for eating Pizza...
I've recently been talking with colleagues about optimal team size and particularly in the area of investment decision making. How many people should you have on an effective investment committee? Jeff Bezos famously said “If you can’t feed a team with two large pizzas, it’s too large.”
How many is that then? I guess it depends how hungry people are? Seriously, it's 8, 9 or 10. Any more and you start to creep into 'Team Scaling Falacy'.
The term "team scaling fallacy" refers to the mistaken belief that adding more people to a team will automatically increase productivity or improve the speed of completing a task. It is a common misconception that simply increasing the team size will bring proportional benefits, but in reality, there are several factors that can limit or even decrease productivity as the team grows larger.
1. Social Loafing
Maximilien Ringelmann was a French agricultural engineer and psychologist, best known for his research on social loafing. In 1913, his experiment studied teams of people pulling rope (image below). It turned out that people in smaller teams were doing more effort than the same people in bigger teams. Being a part of a bigger team, they rely on others and feel less responsibility for the final result.
2. Relational Loss
This concept was introduced by Jennifer Mueller, which describes a situation when
“an employee perceives that support, help, and assistance are less available within the team as team size increases”.
Dr Katy Milkman from Wharton at the University of Pennsylvania studied students working in a team of 4 vs a team of 8, constructing a Lego figure and estimating their time for construction. The team of 4 were 35% faster yet participants expected the larger team to be quicker.
How to combat it?
1.Keep teams small and agile - Helps massively with communication and flexibility when adapting to change. Also helps with transparency and accountability.
2. Be honest about membership - The late J.Richard Hackman of Harvard said
"In truth, putting together a team involves some ruthless decisions about membership; not everyone who wants to be on the team should be included, and some individuals should be forced off."
3. Regularly ask if people are still committed to the end goal - I see this all the time, people stay on an investment committee for too long because there is status attached to it, however they don't have the time to commit as they once did. It happens. Life and responsibilities change and that should be reflected in the ability to commit.
Keep Mr Bezos in mind when thinking of group decision making functions. Can we feed this group with two pizzas?
