Author Rich Karlgaard explains why small teams are more productive than large teams.
When it comes to task forces, cross-functional teams and focus groups, many organizations seem to believe that bigger is better, so they load them up with as many high performers and thought leaders as possible.
But is this the right approach? Nope, says Rich Karlgaard, author of The Soft Edge: Where Great Companies Find Lasting Success.
“As companies strive to stay agile and innovative, they’ve discovered that units of 8 to 12 people work best as the natural size of high-performance teams,” Karlgaard says. “This is the magic number for leadership teams, product teams, research teams, design teams and more.”
Karlgaard points to the success of companies like FedEx, which has streamlined its core leadership team to CEO Fred Smith and 10 direct reports. This fosters high performance, says Karlgaard, and helps the company present a single face to customers and shareholders. Karlgaard also mentions Amazon, where CEO Jeff Bezos uses the “two-pizza rule” to determine team sizes. If a group can’t be fed by two pizzas, it’s too big.
Small teams offer several key advantages, Karlgaard says:
Small teams are more entrepreneurial. Not long ago, German software giant SAP replaced the management framework for its 20,000-person development department with “mini-teams” of roughly 10 people. Each team had the competence and authority to make the decisions necessary to complete the entire product development cycle, including the quality of the software, the functionality and the architectural blueprint. As a result, product development time was cut nearly in half in a three-year period.
“That’s the power of putting aside your managerial pride and letting small teams loose,” Karlgaard says. “On their own, these mini-teams became incredibly entrepreneurial and found a faster, better way than when headquarters tried to help them.”
One key to SAP’s success, he adds, is that its teams of 10 were required to check in every two to four weeks to report on their progress. “They had support. They had to work within a system. They had accountability,” he says. “That’s the secret of innovative teams: this ability to have autonomy, to have freedom, but within a strong, well-defined support system and with clear accountability.”
Small teams move faster. Generally speaking, the fewer people there are in a group, the easier it is to round them all up and build consensus. That’s because meeting do not need to be postponed to accommodate members’ conflicting schedules. You don’t need to waste time bringing everyone up to speed on new developments. There’s no need to allow two dozen people to weigh in. And during the conversation, there are fewer arguments and misunderstandings.
People in small teams trust each other. In the last mega-group you were part of, how many people did you trust? A lack of trust has major implications on knowledge sharing, innovation and outcomes.
“When there are fewer people on a team, it’s much easier to get to know one another and become comfortable sharing ideas,” Karlgaard says. “Remember, ideas must be offered willingly. And yes, great ideas are given only to those we trust. Not surprisingly, in big groups where knowledge is treated as currency, creativity and innovation don’t exactly flourish.”
Members of small teams help out their teammates. At a dozen team members or smaller, members are not only willing to share information, they’re likelier to come to the aid of another team member. If the mission is important enough, they’ll even do so at their own expense. It’s no surprise that the basic unit of the U.S. military’s Special Forces is the 12-person Operational Detachment. Soldiers will jump on a grenade to protect their fellow soldiers. The principle works in business, too.
“In a small team, a marketing associate will stay up all night to sharpen another team member’s presentation,” Karlgaard says. “An engineer will get her hands dirty to ensure the product is perfect at launch. This unity tends to fall apart as teams scale up. At 100 people, you sort of care about your team members, but you wouldn’t be too torn up if one of them looked bad in front of the boss or missed a deadline. Their well-being is just not at the front of your mind.”
Small teams can become more specialized. In today’s workplace, there’s still value in knowing a little bit about a lot of things, but in many cases it’s more important to know a lot about a very particular area. Small teams can get to this level much faster than large ones.
“It’s frustrating and time consuming to bring a large group of people up to speed on a focused, maybe even technical, subject,” Karlgaard says. “You can’t move on until everyone understands the task at hand and the challenges you’re facing. The fewer people there are, the more streamlined the process becomes.”
Small teams don’t waste your human resources. It’s hard to say no when someone wants to join a team, yet can your company afford to spread its people so thin? Often, says Karlgaard, the answer is no.
“When you allow an unlimited number of people to join a team, you may think you’re being transparent, maximizing your brainpower and generally creating your best odds for success,” he says. “But chances are, a lot of them are not actively contributing. They’re actually wasting time that could be much better spent on other projects. When you whittle teams down to a small core group, you help ensure that everyone else is using their time and energy more productively.”
Small teams foster mentoring. Even in smaller teams, it’s likely that members will have different backgrounds, experience levels and areas of expertise. In fact, says Karlgaard, two-pizza groups are a great environment for more experienced people to teach and coach less experienced ones.
“A lot of the mentoring will happen organically as the team members work together and interact,” he says. “This is good for the team’s productivity and for your company overall, because you’re developing more junior people without spending any extra resources. Plus, mentoring fosters engagement on both ends: Mentors feel that their skills and knowledge are appreciated and respected, and those being mentored appreciate the personal attention they get as they work with in-house experts.”
Small teams weaken the glass ceiling. In small teams, everyone has to pull their weight or else. There’s no room for favoritism, bureaucracy or politics. When everyone’s collective neck is on the line, it’s in everyone’s best interests to listen to all opinions and back the best ideas.
“Of necessity, small teams become meritocracies,” Karlgaard says. “On the other hand, though, we’ve all seen large teams devolve into oligarchies, or even not-so-benevolent dictatorships. Those types of groups not only inhibit progress, they can actively poison your company culture and contribute to the disengagement of valuable employees who, for whatever reason, aren’t part of the ‘in crowd.’”
About the author: Rich Karlgaard is the publisher of Forbes magazine, where he writes the Innovation Rules column. He has been a regular panelist on television’s Forbes on FOX since the show’s inception in 2001. He co-founded Upside magazine, Garage Technology Partners, and Silicon Valley’s premier public business forum, the 7,500-member Churchill Club. He is a past winner of Ernst & Young’s “Entrepreneur of the Year” award. His 2004 book, Life 2.0, was a Wall Street Journal business bestseller. His new book is The Soft Edge: Where Great Companies Find Lasting Success.