Updated: Nov 13, 2018
When we talk about growth it’s usually accompanied by a round of applause. Be it in personal development or in business, growth is more often than not a cause for celebration.
And yet, there are times when it can be problematic in business. Take, for instance, this study from 2016 showing that two thirds of the fastest growing companies fail. Communication is something that undeniably suffers when a company starts to branch out, leading to poor decision making.
The same goes for the teams that make up those companies. We believe that having smaller teams leads to more effective communication and more productive meetings. So does Jeff Bezos, who famously implemented the ‘two pizza rule’ at Amazon, stating no meeting should be big enough that two pizzas couldn’t feed the entire group. Anymore and team productivity suffers.
Here are a few scientifically backed reasons why smaller teams are more effective.
The Efficiency of Larger Teams is Overestimated
The bigger a team is the more effective right? This has actually been put to the test by behavioral research scientists, and not only is it not necessarily true, there is also reason to believe we vastly overestimate this increased efficiency, causing us to rest on our laurels.
According to Bradley R. Staats, Katherine L. Milkman and Craig R. Fox, who coined the term team scaling fallacy, with every added employee, team managers cumulatively overestimate the added efficiency. We do this because we focus on efficiency gains rather than losses. It’s normal that we wouldn’t expect new hires to adversely affect a team's productivity, but this does happen, regardless of these new hires’ competence, as described in the points below.
Bigger Teams Mean Less Individual Output
Maximilien Ringelmann, a French professor of agricultural engineering, conducted an experiment where he got volunteers to perform a simple task, they had to pull on a rope. He found that if only one person was pulling on the rope, they put in 100% of their effort. However, the more people he added to the activity, the more everyone’s effort was collectively reduced.
A live indicator of the above team scaling fallacy -everyone overestimated the collective effort and underestimated how much they had to compensate by- the finding is known as the Ringelmann effect.
Smaller Teams Make Us Feel More Connected
The worst types of workplaces can be alienating settings, and according to Jennifer S. Mueller’s research, this type of atmosphere becomes more prevalent the bigger a team.
Whereas the Ringelmann effect is an observation on how larger teams get less effective, Mueller’s research on relational loss looks at why this tends to happen. Her study suggests that larger teams diminish the perception of available support, something that affects us in subtle ways. Mueller’s research shows that though this may have a subtle and almost imperceptible effect on an individual, the accumulated negative effect can drain a team’s productivity.
Big Teams Lead To More Groupthink and Less Creativity
While the Law of Triviality is based on fairly anecdotal evidence, it does give a good indicator as to the effects of having countless people trying to impress their employers (it can become a shouting match). Also named the bikeshed effect - after a fictional team who were tasked with approving the plans for a nuclear plant and spent all their time discussing what materials to use on the staff bikeshed - the Law of Triviality states that when there is a difficult task at hand, employees who aren’t confident in their positions steer conversation towards trivialities they feel they can talk about with confidence.
This kind of groupthink is clearly counterproductive and difficult to manage in larger teams. Jeff Bezos’ response is the two pizza rule. As Richard Brandt, who wrote a book on Bezos, describes it, at Amazon "[Bezos] wanted a decentralized ... company where independent ideas would prevail over groupthink."
Working in smaller teams means employees spend less effort on trying to be heard, and more on finding solutions and overcoming obstacles.