What's the Optimal Team Size for Workplace Productivity?

Team size is a crucial component of maximizing workplace productivity. Is there an optimal team size?

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When Mike Volpe was speaking at INBOUND 2014, one particular slide triggered 80% of his audience to stand up and take pictures.

It wasn’t the ROI results of a big campaign.

It wasn’t his final takeaway from the talk.

It was this slide giving a rough breakdown of how to structure an inbound marketing team as you grow.

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We really want to make the right decision about people on our teams — and specifically, the right number of people.

It’s perfectly natural. We often ask ourselves: “What’s the optimal team size?”

And for good reason. Hiring people is a big deal. The performance of a company depends on their work, and they are typically a company's biggest expense. In addition, the way people get along internally affects everyone’s happiness and ultimately impacts workplace productivity.

We want the right team, with the right skills, doing the right work. Hire too few people, and there may be skill gaps; hire too many people and we run the risk of a bloated payroll and processes more complex than they need to be.

So we think, there’s gotta be an ideal team size. If only we could figure it out, or at least establish a rule of thumb so that we don’t screw up.

Enough people have asked this that we now have an answer — or at least, a range of answers to suit most needs. But I think it’s important to realize up front that the answer itself doesn’t really matter. Thinking that team size is a predictor of success is like expecting all the characters on Temptation Island to remain faithful.

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We’re probably using this team size = success equation as a means to an end.

Which is fine. Because what we’ll figure out during the journey will be more important than the ideas we clung to in the beginning.

Teaming up

Why do we need teams? Can’t we avoid a lot of hassle by working independently? When we think about certain types of work, it certainly seems that some people can do their job without much peer involvement; assembly line workers, janitors, and salespeople can all have relative autonomy in their roles. Once they’ve learned the skills necessary, they can pull it off on their own. Can we extend autonomy to more creative, typically team-based roles?

We could, but quality would suffer.

When you get right down to it, the answer for what makes a successful team often begins with two words: “It depends....”

Every job is a series of questions that we must address in order to be good at it.

“What do I do with this piece of trash?”

“What should I do about this person who just walked in?”

“What should our next advertising campaign be?”

With roles that are light on teamwork, the answers tend to be obvious and consistent.

“Pick it up and throw it out.”

“Smile, say hi, and offer to help.”

"A holographic 3D floating image outside our shop, duh."

The last one didn't quite fit. That's because roles that tend towards teamwork often come with answers that start with “it depends.”

“It depends, who will we be advertising to?”

Sure, every “depends” job could be done by one person, but they would certainly not always get things right, and they’d definitely benefit from collaboration with others.

People working on their own are more susceptible to doing things like... running a campaign that publishes the CEO’s social security number.

A real ad campaign, and the CEO did indeed have his identity stolen.

Teammates can answer questions, provide feedback, or accept sub tasks that would bring the quality of work up to a point that gets the job done well.

When teams pool skills and resources, their decision making improves, and they can make better decisions as a group than any one of them could do alone. Researchers call this collective intelligence. (More on collective intelligence in a bit.)

But there’s another major benefit to working in a team. Jennifer S. Mueller, a Management Professor at the University of San Diego's School of Business Administration, explains it as such:

“...teams are prolific in organizations. From a managerial perspective, there is this rising recognition that teams can function to monitor individuals more effectively than managers can control them. The teams function as a social unit; you don’t need to hand-hold as much. And I think tasks are becoming more complex and global, which contributes to the need for perspective that teams provide.”

So while most individuals form teams under the assumption that they’ll be able to accomplish more complex tasks thanks to the complimentary skillsets of their peers, organizations as a whole benefit from team formation by reducing the need for management.

Everyone can win from flattening organizations.

Thinking it through

Okay, so teams are helpful. But how big should they be? ...It depends. (Sorry, had to.)

To get closer to the answer, think through:

   -the team’s goal

   -the skills required

   -who will lead the team

   -how they will decide who does what

   -how they will communicate

   -how they will form and maintain memberships

Factors like these are what Moe Carrick describes as critical to a team’s cohesion, productivity, and health.

Goal

Why are we forming this team? Having a common purpose is so central to teams that some people, like Pawel Brodzinski, an expert in project management, make it part of the term’s very definition. A team is a group of people with a common purpose.

Daniel Pink’s 2009 book, Drive, explores the factors that truly motivate us. In it, he lists purpose as the highest-level piece that pushes us to put in our best effort. Purpose is connection to a cause that’s bigger than oneself. So by thinking about the team’s purpose, and connecting it to the organization’s larger mission, we have a direct link between our individual efforts, our team’s goal, the organization’s mission, and a better world.

Skills

When teams form around a common purpose, we naturally pay attention to the skillsets we’ll need to achieve that purpose. Evaluating potential team members on the basis of how they’ll contribute gets us closer to finding the right makeup.

If five major skillsets are required, there doesn’t necessarily need to be five people on the team. As long as time isn’t a factor, four people covering the requirements would be preferable to five.

Leadership

It’s super important that each team member knows what they should be doing at any given time. How will they decide on their task allocation process? That role should fall to a leader.

Let’s let Mueller drop some more wisdom about this, using words fit for a preschooler:

We had a class on the ‘no-no’s of team building, and having vague, not clearly defined goals is a very, very clear no-no. Another no-no would be a leader who has difficulty taking the reins and structuring the process. Leadership in a group is very important.”

Keep in mind that a team can self-organize and pick what they want to work on, but the leader needs to shape how they do that, and what can be picked from.

The Scrum methodology does this with their use of Product Owners and Scrum Masters. Scrum is widely used in software development, but these two roles have applications relevant to any team. Basically, the roles recognize that there needs to be someone to define the work to be done, and someone who manages the process.

What’s a typical leader-to-doer ratio? Consider the experience of the team. Less experienced, newer teams will need to be smaller. More experienced, established teams can be larger. Tomasz Tunguz, VC at Redpoint Ventures, observed that at Google team ratios ranged from 1:2 to 1:20, with an average of 1:7.

As teams grow, the role of the leader becomes more challenging. Edward Lamont of Next Action Associates illustrates the progression as follows:

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His point is that as a team gets bigger, the leader’s job becomes more about creating a shared purpose, figuring out who’ll do what, and communicating that shared purpose.

Communication

One of the most recognized obstacles to forming successful large teams is the idea that the more people there are, the more people there will be to talk to, and talking takes time, which reduces efficiency. This impacts both the relationships of the team and the time it takes to get tasks done. When more people have a say, things will naturally take longer. As noted in this post at Lighthouse, it's all about the lines:

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But without enough skillsets, you can’t do the job in the first place. So what’s the balance between too many and too few people?

In 1970, Hackman and Vidmar set out to get a sense for that by asking two questions to individuals from groups of 2-7: Is your group too small for the task? Is your group too big for the task? The percentage of yesses to the first question fell as the second’s rose, and the lines intersected at a team size of 4.6 members.

It’s interesting that 4.6 roughly lines up with the sweet spot from that Spirograph-esque image above. If you turn those connected dots into a single graph, it shows that 5 person teams find the balance between members and communication connections:

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So why is communication so important? Because talking helps us solve problems, figure out who’s doing what, facilitate collaboration, and improve our decision making.

Empathy

Decision making in particular is improved by a higher collective intelligence. You might be surprised to hear that collective intelligence is not strongly affected by the individual intelligence of team members. Rather, it’s social sensitivity and conversational turn-taking that predict collective intelligence.

Sit in and let Anita Williams Woolley, Assistant Professor of Organizational Behavior & Theory at Carnegie Mellon's Tepper School of Business, explain this relationship:

She describes social sensitivity as the degree to which people can read facial expressions and make attributions about what others are thinking and feeling.

Conversational turn-taking is how evenly distributed talking time is across group members. Groups with more evenly distributed talking times tend to have higher collective intelligence.

As soon as you think about these in practice, it becomes obvious why they’re important to forming a functioning team. If you’re meeting with people who are oblivious to the social cues from body language and facial expressions sent their way, and refuse to stop talking without regard for the contributions of others, you’re going to feel like you’re part of a pretty ineffective team. And you’d be right.

Relationships

Another problem with having too many people to talk to with not enough time to do it is that it gets harder to build quality relationships. This has a real effect on productivity, according to my now favorite expert on team theory, Mueller:

“...individual performance losses are less about coordination activities and more about individuals on project teams developing quality relationships with one another as a means of increasing individual performance.”

This is why icebreakers, social events, video calls, and watercoolers are so important. Sure, team retreats with obligatory trust falls can be Groan-Central 2k15, but they work. The Wharton MBA program even did this for a while, sending their student working groups out to camp so that they could become more effective. Evan Wittenberg, the program director, shares why:

"I think this is what people forget to do when they create a team in a business — spend a lot of time upfront to structure how they will work together. [At the camp, we] get to know each other and share individual core values so we can come up with team values. But most importantly, we have the students work on their team goals, their team norms and their operating principles. Essentially, what are we going to do and how are we going to do it?"

Effective teams need to practice. And practice takes time. We shouldn’t expect new teams to live up to their potential right off the bat, even if we’re deliberate about their creation and guidance. It’s a bit like how national sports teams rarely reach the level of the best club teams. No matter how great the individual members are, the national team will suffer because they just won’t get enough time to practice together...

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...and gel to the point of being able to make no-look passes. Or as Professor Katherine Klein explains it (in much less sporty terms):

“...team mental models — defined as team members’ shared, organized understanding and mental representation of knowledge about key elements of the team’s relevant environment — may enhance coordination and effectiveness in performing tasks that are complex, unpredictable, urgent, and/or novel. Team members who share similar mental models can, theorists suggest, anticipate each other’s responses and coordinate effectively when time is of the essence and opportunities for overt communication and debate are limited.”

Formation

Should you even be the one putting this team together? A bunch of senior executives told ThinkWise, in its 2015 Impact of Team Performance Survey, that their self-selected teams (meaning members choose the team they join) are their best-performing teams.

Gunther Verheyen, a proponent of Scrum teams, points out that through self-organization, a team will adjust its size autonomously for optimal performance. He suggests that rather than telling a team what their mandatory size should be, we should instead help them discover what works best for their needs.

But be careful to not create too fluid and open of an organization. Shadow hierarchies may emerge, where decision-making structures become hard to navigate, as reported at Valve, a famously flat company. Teams might also feel exposed if they don’t have clear boundaries around them. And feeling out in the open can hurt innovation, as Ethan Bernstein, writing for Harvard Business Review, reported.

Bernstein put up curtains around select teams at a manufacturing plant and observed 10-15% better productivity. He found that by shielding employees from observation, the curtains supported local problem solving, experimentation, and focus. Work within the curtains became even more transparent.

In Bernstein's own words:

Team boundaries can allow for productive, selective opacities within starkly transparent environments."

After thinking through a team’s goals, leadership, communication, empathy, relationships, and formation, we’re ready to tackle the size question.

Go big or go… small?

Many experts on optimal team size consider the low end to be around 4 and the high end to be around 20. Above 20, teams tend to naturally split out into multiple sub-groups. Either end of the spectrum has advantages and is better suited to certain situations.

The case for small teams

Teams optimizing for goals, empathy, and relationships should stay small. Bradner et al found that small teams are more aware of team goals and are better acquainted with other team members’ personalities, work roles and communication styles.

Teams made up of less experienced folks, or that are newly formed, should stay small. There’ll be a greater demand on the knowledgeable members’ time, which will become unsustainable at larger sizes. Newer teams require more communication to set their purpose, establish process, and pull things off. Larger teams make that communication more complex.

It’s also worth noting the Ringelmann Effect. It’s a classic observation from 1913 where its namesake measured the force on a rope pulled by different sizes of teams. When solving for the average effort made by people at different team sizes, Ringelmann observed that the bigger the team, the less each member pulled. Keeping teams small may keep average effort up, and conversely, increasing team size brings the possibility of free riding by individual members.

Then there are stories about teams getting cut in half, yet maintaining their total productivity.

As Frederick Brooks Jr. made famous in The Mythical Man-Month, adding people to a late project only makes it later. So don’t think that a bigger team necessarily means a more productive one.

Even large top management teams are more likely to disagree and will take more time to make decisions.

And to add one more nail in the big team coffin, members are less likely to be recognized for their true contribution by all of their peers. Because each member cannot know how each other member contributes, this awareness tends to be imbalanced, and people may start disagreeing over who is truly contributing substantially to the team. When there’s imperfect understanding of effort and contribution to goals, trust becomes strained and commitment problems can emerge.

The case for big teams

While there seems to be plenty of evidence that small teams are more likely to be optimal, there are certain cases where larger teams are preferable.

When tasks can scale and require little coordination, big teams are okay. When the team members are well acquainted, experienced, have an established process, and are clear about goals, big teams are okay.

Big teams might also be at an advantage when success depends upon the size of their collective networks, access to budget, or presence of a wide range of skillsets. In each of these situations, having more people would mean more availability of each factor. Spreading the word is easier when you have 20 people with 1000 friends each; in some places you are given a larger budget when your team is bigger; and, hiring a large, multi-talented team means members can learn a more diverse range of skills from each other, and can draw on those skills in their complex tasks.

The magic numbers

When asked for their optimal team size, experts usually settle somewhere on the low end of 4-20. The number seems to shift depending on the type of work, and the factor(s) controlled for.

Tech

7 is a popular and often recommended team size. It’s also the average observed at Google.

It’s common to see “seven plus or minus three” — especially in software development. (Or in other words, 4-10.) This is especially true where the range is determined by factors such as how well can they handle the load of a larger team.

Side note 1: I suspect the range is worded like that not because the people who say it are technically minded, but rather that it makes the range seem so much more precise. 4-10 is a ballpark guess; 7 plus or minus three is a statistical prediction.

Founding teams

For entrepreneurs starting a company, Shrivastava and Tamvada found that company performance and team effectiveness peaked at three people per founding team.

Gut feel

As we saw from the survey-based study, people tend to feel like teams of 7 are too big, and teams of 2 are too small, but teams of 4.6 were jusssst right.

Research

Mueller, who I hope to have sold you on by now, says the evidence points to six member teams correlating with optimal size, if businesses are facing issues of coordination and motivation.

She also points out that it gets harder to manage who speaks in teams above five. To illustrate this, just think of the absurd length of a recent Republican debate where the rules said that if your name was mentioned, you would get a chance to respond. Of course, the candidates took the hosts up on the offer and turned the event into a marathon. It’s easy to imagine this say-something phenomenon getting out of hand with teams above five.

Hungry teams

Jeff Bezos, CEO and Founder of Amazon, popularized the two-pizza rule, where teams shouldn’t exist if they can’t feed themselves on two pizzas. This suggests they should top out around 8, which is in line with the standard.

Side note 2: Bezos was quoted in that same Wall Street Journal article as saying “communication is terrible!” in response to the suggestion that employees should communicate more. It sounds bad at first, but maybe he was reacting with both the communication nodes concept and the curtained-off manufacturing plant team in mind.

Another food-themed team size suggestion is the Table rule, from Davide Casali, where the ideal size of a team is one which can sit around a table without breaking into multiple conversations. This translates into 3-8 people, and is suggested because it enables focus, context, and soft skills (“how was your day, honey?”)

Organized teams

I’ve mentioned a lot of different research, and read up on quite a bit of theory about the ideal team size. But I’ve been holding back on my own contribution to the discussion until now. I’m blessed to have access to a wealth of data about the actual productivity of teams that are getting real things done day in and day out. Let me tell you about it.

When I’m not writing for The Modern Team, I’m a marketer at Flow, an app where teams can keep all of their communication clear and organized. A central part of Flow is its task management feature, where teams can create, delegate, discuss, and complete tasks that are important pieces to reaching their goals.  

When teams complete tasks, we get anonymous, aggregate data about volume, frequency, and team size. It just so happens that the data is very relevant to this discussion, so let me share what we see from a productivity perspective.

The chart below shows increasing team size on the x-axis, and total task completions on the y-axis. The dots are the actual averages and the line is a polynomial trendline which exposes a pattern:

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As you can see, productivity gains continue as teams approach 5 members, and then diminishing returns start to kick in. This is roughly in line with what we’ve heard from other sources.

So what of it?

No matter how much we want to, we’ll never get to a single number that dictates how to size our teams, because it’s impossible to control for all the human and business factors that affect it. But if we take deliberate steps to think through the formation of our teams, ask the questions that’ll set us in the right direction, and take previous research into consideration, we’ll likely get close.

Next time you form a team, be sure to ask these questions:

   -What will be the goal of the team?

   -Who will decide its members?

   -How will they know what to do?

   -Do they know each other and will they get along?

   -Have they worked on this challenge before?

   -What skillsets will they need?

   -How will they communicate?

   -How long will they take to get to optimal performance?

   -How will they interact with outsiders both at the company and beyond?

And consider creating a team in the sweet spot between 5 and 7… err 6... plus or minus 1.

For Discussion:

What do you think about when forming teams? And how does team size play a role where you work?

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-Lead Photo: "Teamwork" by David Wynne, 1958. cc: Flickr/dearbarbie

-Basketball Photo: "Maurice Jones no-look pass." cc: Flickr/neontommy

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