The Superpower of Small Teams

Res Extensa #31 :: learning from Max Ringelmann, Fred Brooks, and benefits of staying lean

If you've ever worked on a group project in school, or been part of large teams working on projects in a company, you're intimately familiar with the asymmetric nature of individual contribution. Some people are engaged, take charge, are okay with taking personal risk, and are willing to pick up the slack from others. Others take advantage of the spread-around workload to hide from contribution.

We're all familiar with this phenomenon. But you'll be glad to know that it has a formal name from the world of social psychology, the Ringelmann Effect:

The Ringelmann effect is the tendency for individual members of a group to become increasingly less productive as the size of their group increases. This effect, discovered by French agricultural engineer Maximilien Ringelmann (1861–1931), illustrates the inverse relationship that exists between the size of a group and the magnitude of group members’ individual contribution to the completion of a task.

In the late 19th century , Ringelmann ran "rope pulling" experiments (having teams play tug-of-war) to study the relationship of team size and individual effort — how much does an individual's level of exertion change as the team size grows? The bigger my team gets, the less overall impact my individual contribution has on the outcome.

Some of you might be familiar with "Brooks's Law", a similar sarcastic-but-true idea from Fred Brooks's The Mythical Man-Month: “adding manpower to software project that is behind schedule delays it even longer”. A slightly different perspective, but riffing on the same observation: that there's an inverse relationship between team size and productivity.

The existence of this “social loafing” effect in larger groups is undeniable. In modern knowledge work, compare a 3-person project with a 30-person one and the respective average level of engagement per person. With big projects, the cruft is massive. People can hide from work, individual contributions are obscured, and it becomes impossible for any one member of the team to know exactly what each person is bringing to the table.

Whether we like it or not, a component of human motivation is linked to status, respect, and appreciation. If I contribute to a team, a part of my satisfaction comes from the ability to separate my individual contribution from others’. Humans are driven by recognition. As teams grow, it’s impossible to resolve who exactly contributed what. If recognition blurs with team size, why not give 80% instead of 100%? Who could tell?

In an environment like this, mediocre performers can hide in the noise.

The fact that this happens isn't that interesting. It's been empirically observed in research for a century, plus we've all had our anecdotal experiences with it. But why does it happen? And what can we do to counteract this natural tendency?

Why big teams slow down

Say you have a team of two, working together on a project. The beauty of the two-person team is the simplicity: if there are 12 things to do and you’re doing 6 of them, you know your teammate is doing the other 6 (or else no one is). If you split the work this way, it’s abundantly clear who did what: if you know you didn’t do a piece of the work, you know who did. Add a third person and this division of labor gets more complex. Add a fourth and it gets even worse. It doesn’t take too big a team to reach the point where coordination overhead becomes significant.

For each person added to the group with N members, you add N new unique communication threads. Cost of coordination eventually greatly outweighs the impact of the work being done in the first place! And that’s not considering the connections from your team up the hierarchy in the organization.

Bigger teams and more "cross-functionalization" (code for an even bigger, even less cohesive team) push toward a type of collectivism of work. The work to be done becomes "The Team's" and not the individual's (at least the responsibility for outcome). Ownership is diluted.

We don't typically create big teams just for fun, though. We do it for a reason — to add resources, expertise, and get more things done faster. But Ringelmann discovered that adding those resources inserts new perverse incentives that pull backwards: risk aversion, lack of accountability, slowness.

You also have political motivations to structure teams based on signaling and not actual need. In an article for Harvard Business Review, Diane Coutu says:

Often the CEO is responsible for the fuzziness of team boundaries. Fearful of seeming exclusionary—or, on the other end of the spectrum, determined to put people on the team for purely political reasons—the chief executive frequently creates a dysfunctional team. 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.

Not all of these tendencies toward bigger teams will never work. Different companies and different types of problems need different mixes of resources. There's even a positive trade-off sometimes to the political signaling-based team structure. There aren't hard boundaries on the do's and don'ts of team structuring. But we can point to some rules of thumb on keeping team structures front-of-mind, and maintain an awareness of the tendency toward team malaise.

Resisting Ringelmann

Since Ringelmann tells us that proportional effort scales inversely with size, the natural response would be to shrink your team. Running lean isn't only a buzzphrase businesses should use to sound more cost effective. Empirical data tells us that the optimum size is fairly small, sometimes uncomfortably so.

Running lean isn't something just for early companies, either; it's something all companies could benefit from even at larger scales. It doesn't have to mean starving teams of resources or straining your people with 100-hr work weeks. I'd frame it like this:

A team should be just as large as it needs to be, but no larger. Try doing that next marginal one-off task with an existing person, versus stretching the size.

Let's go through a few tactics and considerations on keeping your teams small and, more importantly, effective.

"2PT"

Jeff Bezos famously introduced the idea of “two-pizza teams” (2PT) at Amazon years ago. The idea here is that no team should be larger than what you can feed with two pizzas. It’s a nice little rule of thumb, and probably works well within the wider culture of Amazon. For teams to try and emulate this, though, they need to be brutally honest about the real size of the team. There might be 6 people on the recurring weekly meeting, but what about the 3 pizzas worth of other stakeholders and peanut gallery members above and around the team trying to influence the work, or that also need to be convinced or sign off? If your 2PT doesn't have autonomy to decide, it's not really a 2PT — maybe it's a 2+3PT. You have the appearance of smallness advantage without the reality.

The advantage of deviants

The bigger teams get, the more likely tasks creep in or process steps get added that have no influence on the decided-on goal, but no one has enough ownership to call it out. Coutu also suggests how to resist this collectivist groupthink. Large groups incentivize conformity and complacency, so teams actually benefit (perhaps counterintuitively) from what she calls "deviants" — members of the team who are constantly swimming against the tide and questioning the work:

This is where what I call a deviant comes in. Every team needs a deviant, someone who can help the team by challenging the tendency to want too much homogeneity, which can stifle creativity and learning. Deviants are the ones who stand back and say, “Well, wait a minute, why are we even doing this at all? What if we looked at the thing backwards or turned it inside out?” That’s when people say, “Oh, no, no, no, that’s ridiculous,” and so the discussion about what’s ridiculous comes up.

Vision brings clarity

Strong vision alignment in a company effectively pre-answers many unknowns that would slow down a less-harmonized team. For every decision point encountered, teams without a strong vision and a clear set of goals generate more cross-talk, debate, and stagnation waiting for guidance on how to proceed. With the clarity you get from a strong organizational vision, individual trust, and autonomy, smaller teams can plow forward on their own. A company with a cohesive vision that maintains consistency in its decision-making culture affords strong pattern recognition abilities for teams to make their own decisions.

Leadership brings velocity

With all of this, I still believe that teams need a dedicated lead: a known, predetermined person to function as the de-conflicter and debate-resolver. Collectivizing all decision making within The Team makes it hard to get past the difficult decisions, which are the ones teams have trouble with. Easy decisions can be made by an individual OR a team; both paths work. When there's a painful call that needs to be made on a trade-off, it helps to have an "Arbiter" clearly set so that these hurdles don't become tire fire roadblocks to getting things done.

Staying small, staying focused

As a company grows — when funding and runway look good, and new revenue opportunities look promising — organizations find themselves wanting to hire ahead of growth. You certainly can't always do "just-in-time" hiring, but I think it's more possible to do than BigCo operators would have you believe. I used to say that I wanted hiring to be "pain-based"; the time to expand the team was when there was already tangible pain, not when we're imagining a future pain we don't have yet, but might. I think companies get big before they know how to be big.

"Bigness" then tempts companies to dilute attention across too many things. A smaller team forces focus and removing the unnecessary. Having hired a big group, companies linger on stuff they should cut from the workload rather than peanut-buttering team attention too thinly. One of your superpowers as a small team is relentless focus. No matter what they say, your big competitors don't have the concentration of attention you can have. They've inserted many distractions that you, as a small org, don't have to have yet.

Staying innovative

The Big Tech players have become notorious in recent years for having a ton of organizational bloat from over-hiring. The golden days of high valuations, big funding rounds, and zero interest rates created a climate of invincibility, where everyone was expanding like the party would never end. But to tie this back to Ringelmann and productivity, the bigger problem to me wasn't simply the headcount bloat of the Facebooks and Googles and Twitters. It's the combo of that bloat with a lack of innovation or productivity. Ringelmann's discoveries weren't the only contributor to the ineffectiveness of these high headcounts. But it's undeniable that the one-two punch of too many people and too-fast hiring slowed innovation to a crawl in many of these places.