Robin Dunbar, an anthropologist and psychologist, Oxford professor, has formulated that 150 was the “cognitive limit to the number of individuals with whom any one person can maintain stable relationships”. Since then, this is known as “the Dunbar number’. Its application to Organizational Architecture is obvious. Units of more than 150 people would theoretically struggle to form proper social relationships. Corollary: you’d better break up a large set up in smaller ‘Dunbar pieces’ if you want to keep proper conversations, meaningful management and a sense of community.
Some people have questioned the 150 threshold and have done so from different angles, but, not many have suggested a number above 200. Whether it is 150, plus or minus fifty, the principle stands. At some point on the scale up of the organization (growth, M&A, consolidation) there is a threshold, beyond which, the total number of people will work against the community, fluid communication, ethos and style, that, in theory, many small organizations and start-ups have. In other words, the often invoked and desired ‘need to keep an entrepreneurial spirit’, is very much dependent on the structure of the organization, its networks and the size of its component pieces.
Interestingly, not many people have looked at the opposite end of the spectrum. If above 150 you are at certain risk, below some ‘minimal critical mass’ you will suffer from a completely different set of risks. The lean structures predicated in the last decades mean sometimes zero slack in the system. With zero slack, knowledge sharing is impossible, company memory is deleted every time somebody leaves, and work and efficiency becomes a struggle. ‘Cutting to the bone’ in structural terms is simply madness. I call them ‘Mad Lean numbers’. One single individual doing a critical job, with zero knowledge transfer, is Mad Lean. No sensible organization should have Units of One as working units, with no shadowing, each of them at high risk (leaving, being ill) and with high replacement costs. This is not efficient management, its simply bad management, or, indeed, mad management.
We are so afraid of overlapping or shadowing jobs that it has become politically incorrect to suggest them. Western management calls this a waste, redundancy or inefficiency. It’s not. Both the Dunbar Number on the scale up side, and my Mad Lean numbers on the minimalist side, are key parts of the managerial maths. They can’t be ignored.