Does team size matter?

Organisation Design

by Dev Mookherjee

19 March, 2024

By Dev Mookherjee & Andrew Day

Over the years we have been asked to coach leadership teams that are not performing or living up to their potential.  It’s not uncommon to find that the team is simply too large.  What is required is not (just) team coaching but team design.

Well-designed teams are central to effective organisation design and team size needs to be an important consideration in this process.  When teams are too large, they tend to be inefficient finding it hard to make decisions, coordinate activities and hold individuals to account.  In contrast, if they are too small, they lack diversity of membership and perspective which can undermine the quality of discussion and decision making.

But …. how small is too small and how big is too big? Well, it depends! An annoying answer we know, but it happens to be true in this case. We thought it would be helpful in this post to say more than “it depends”, and to offer practitioners a way of thinking about a possible response.

What does experience and research tell us?

There is a range of guidelines try to answer this question.  These suggest that, for example the optimal number for a project team is 3-6 (Lean 6 Sigma) or 3 – 9 members (Agile).  Jeff Bezos’ rule in Amazon[i] is to avoid a team size which cannot be fed by two pizzas to help efficiency and scalability.  This leaves some room for interpretation – how big are the pizzas and how hungry is the team?  We figure the range would probably be around 6 – 7 people.

These rules of thumb are broadly consistent in their upper and lower limits.  But what evidence exists to support such guidelines?

Themes from Research

 Our review of the research on team size suggests the following themes:

  • Larger teams (8 or more members) tend to be more effective in performing complex tasks. Complex tasks that need diverse expertise and perspective require (but do not necessarily result from) larger teams. For highly complex tasks, such as running a country, small teams appear to be less effective however beyond 20, team performance tends to fail. From a very different perspective, Cyril Parkinson investigated variations in the size of the British Cabinet from 1257 to 1955[ii]. He found that as its size increased beyond 20, it tended to become less effective and lose power.
  • Smaller teams (4-6 members) may perform stronger on simpler, routine tasks or highly interdependent tasks. Smaller teams face less challenges in coordination of their efforts. On simple, routine tasks teams of 3, 4 and 5 tend to outperform individuals.   For instance, Patrick Laughlin[iii], at the University of Illinois, investigated the performance of teams versus individuals in solving coding problems.  For simple tasks, team members report that a team between 4-5 members is more effective for a non-complex task[iv].
  • Process losses, such as declining individual effort and difficulties with coordination, tend to increase with group size. Social loafing for instance tends to arise in teams of larger than 7.  This is called ‘the Ringelmann effectʼ after an early study of teams at the start of the 19th century by Maximilien Ringlemann.  He varied the size of a team pulling on a rope whilst measuring the force exerted.  This clearly revealed that as team size increase beyond 7, the average effort across the team declined.  Other process losses around motivation have been identified, as ʼfree ridingʼ and ʼthe sucker effectʼ[v].  Research also clearly demonstrates how the performance of larger teams declines because of inefficiencies in coordinating input to decision and actions.
  •  Process gains or synergies vary according to the size of the team and the nature of the task. Research suggests that small to medium-sized teams (5-8) often exhibit better collaboration and coordination, leading to enhanced process gains. Teams of this size allows for increased individual contributions, a better understanding of each team member’s strengths and more efficient communication.  The social psychology research[vi] indicates that team synergies are more likely to arise when: (i) teams have diversity skills and perspectives; (ii) shared purpose and goals; (iii) clear and strong leadership; and (iv) norms that encourage contributions, trust and collaboration.

  • Team cohesion and member satisfaction decreases as team size increases. Harvard professor Richard Hackman[1], for instance, found that as the size of a team increased member satisfaction tended to decline and Meredith Belbinʼs demonstrated that smaller teams achieved a greater degree of intimacy, involvement and engagement than larger teams.
  • Teams become more irrational and prone to paranoia as their size increases. Psychoanalytic studies[vii] of small and large groups highlight how regressive and irrational dynamics, such as excessive anxiety and paranoia, are more present in larger groups than in smaller ones. This affects ‘reality-testingʼ and the quality of decision making. Large group dynamics are generally observed to arise in groups of 20 or above.
  • Larger teams require a basic structure to perform effectively, whilst teams of 4 or below can be self-organising. Over many years Meredith Belbin at Henley Management College researched the performance of teams on management simulations[viii]. He discovered that larger teams, with 8 or more members, tended to struggle with pressures to conform, include everyoneʼs perspective when making decisions and coordinate efforts.
    • Typically, 2-4 members would tend to dominate decision making.
    • Teams of 6 or below, tended to draw on most members when making decisions and perform better on the task.
    • In teams of larger than 6, to capitalise on the different perspectives and expertise within the team, he observed that teams need a nominated leader or chairperson role and other roles to provide structure.
  • The maximum size of social groups or communities tends to be around 150. There is some evidence to suggest that larger social units also reach a limit. The anthropologist Robin Dunbar researched the size of social communities, such as villages and tribes.  He discovered that 150 is the maximum number that a group of people can maintain a social relationship. This has become known as ‘Dunbarʼs Lawʼ.   Over this size, groups generally require more restrictive rules, laws, and enforced norms to maintain a stability and cohesion.  In organisations therefore 150 may be the upper limit for larger grouping such as departments:
    • L. Gore for instance limit the size of buildings and work units to 150 employees. When the building reaches its limit, they create another building and work unit of the same size.
    • General Stanley McChrystal based on his experience from the US Army argued that when a task is too complex for a single team, then multiple small and interconnected teams are required – a ʼTeam of Teamsʼ as he labelled it.  This requires that each team has a connection with every other team that the collective feels connected to a shared purpose.

 Guidelines for the “minimum viable team”

The research reveals how a tension exists between the potential synergies (or process gains) that arise from larger teams (because of diversity of perspective, experiences and expertise) and associated processes losses[ix] that characterise large group life.  In other words, in the design of teams there is a trade-off between efficiency and effectiveness for complex tasks.  When designing teams, we believe that we should focus on creating the minimal viable team (MVT) for its task.   The key is to find a balance that suits the specific requirements of the task, considering:

  • the complexity
  • diversity of skills needed
  • and the nature of collaboration

The size of the team needs to be a function of both the complexity of the task and the requisite diversity of capability, identities and perspectives.   Creating an MVT also protects against Parkinson’s law[x].  This is the observation that ’work expands as to fill the resources available for its completion’.  In other words, if a team is too large people find work to do which is not value adding.

Figure 1 below shows how team size might vary from smaller task teams through to business units and larger organisational units.  Larger teams and units need more explicit roles and structures to minimise process losses and help realise potential synergies that come from having a larger, more diverse membership.

Figure 1: Team Size by Diversity and Complexity

The research suggests the following:

  • A relatively straightforward task, such as creating a presentation or improving a simple process, has a minimal viable team size of 3-5 members.
  • A more complex project, such as creating an approach to reducing organisational carbon emissions, has a minimal viable team size of 5-8 members.
  • To manage a portfolio or large system, such as a business or complex function, the minimal viable team size would be 9-19 members. Teams close to this upper limit (15+) however are likely to experience significant process losses and will require clear structure, meeting processes and meeting time to coordinate input.
  • Business units or departments are likely to have a maximum viable team size of around 150 members. Above this number, individuals are unlikely to be able to maintain sufficient social relationships to maintain the entity.  Beyond this size, the question of how to design teams of teams arises.  This requires attention to mechanisms that facilitate coordination and integration of activities and outputs across teams, such as committees, communities of practice, design principles, communication rituals and practices.

Concluding thoughts

In the realm of team dynamics, size indeed matters. Aligning size with task complexity and collaboration needs holds the key to unlocking optimal performance: we need to be thinking about whether it is a pizza that’s needed or the entire culinary output of a corporate canteen!

We at Metalogue Consulting are continually working with the questions of team size and design, as well as team dynamics. If you have questions on this subject or would like to discuss this post further, then get in touch: contact@metalogue.co.uk!

 Endnotes

[i] https://www.theguardian.com/technology/2018/apr/24/the-two-pizza-rule-and-the-secret-of-amazons-success

[ii] https://arxiv.org/pdf/0808.1684.pdf

[iii]https://www.apa.org/news/press/releases/2006/04/group#:~:text=%22We%20found%20that%20groups%20of,Laughlin%2C%20PhD.%2C%20of%20the

[iv] https://www.jstor.org/stable/2786271?seq=1#page_scan_tab_contents

[v] https://www.blackwellpublishing.com/content/hewstonesocialpsychology/chapters/chapter13.pdf

[vi] Group Processes (2000) (2nd Edition) by Rupert Brown.  Blackwell Publishing.

 [vii] Koinonia: From Hate through Dialogue to Culture in the Larger Group (1991)  Karnac Books.

[viii] https://www.belbin.com/resources/articles-directory/how-many-people-in-a-team

 [ix]

https://www.blackwellpublishing.com/content/hewstonesocialpsychology/chapters/chapter13.pdf

[x] https://en.wikipedia.org/wiki/Parkinson%27s_law

Other References

Photo by patricia serna on Unsplash

Opex Learning Team (2016) Lean Six Sigma Teams: Finding the Right Size; at https://opexlearning.com/resources/lean-six-sigma-teams-finding-the-right-size/20157/#:~:text=Ideally%2C%20a%20Lean%20Six%20Sigma,and%20achieve%20the%20desired%20results

Lorenzo del Marmol (2017) How To Select And Train The Right People For Your Lean Six Sigma Project, at https://leansixsigmabelgium.com/blog/select-train-right-people-lean-six-sigma-project-4-performance-excellence/#:~:text=A%20Lean%20Six%20Sigma%20team%20for%20each%20DMAIC%20project%20should,with%20the%20process%20being%20improved

Stefan Schulz-Hardt and Felix C. Brodbeck (2015), in Chapter 13: Group Performance and Leadership, in Hewstone, Stoeber, W. & Jonas, K., An introduction to social psychology, John Wiley & Sons, Inc., Hoboken, New Jersey, at https://www.blackwellpublishing.com/content/hewstonesocialpsychology/chapters/chapter13.pdf

Miller, G. A. (1956). “The magical number seven, plus or minus two: Some limits on our capacity for processing information”. Psychological Review. 63 (2): 81–97, cited at: https://en.m.wikipedia.org/wiki/The_Magical_Number_Seven,_Plus_or_Minus_Two

Nigel Thurlow (2020) Scrum Team Size; Is it 7 ± 2 or is it 3-9?, at https://www.linkedin.com/pulse/scrum-team-size-7-2-3-9-nigel-thurlow/

Peter Klimek, Rudolf Hanel & Stefan Thurner (2008) Parkinson’s Law Quantified: Three Investigations on Bureaucratic Inefficiency, at https://arxiv.org/pdf/0808.1684.pdf

Dunbar, R. I. M. (1992). “Neocortex size as a constraint on group size in primates”. Journal of Human Evolution. 22 (6): 469–493, cited at: https://en.m.wikipedia.org/wiki/Dunbar’s_number

Does team size matter?

Related Articles