Productivity & EffectivenessSocietal Impact

How rapid growth can split a company

By 17/11/2017 August 22nd, 2019 No Comments
“Would you classify that as a launch problem or a design problem?”


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As a company scales and grows it becomes increasingly tricky to maintain good communication and connections between people and teams. The more people there are, the more connections exist.

Growing tree
Photo by Brandon Green on Unsplash

Dunbar’s Number (or the rule of 150) is a suggestion that there is an upper limit to the number of connections humans can make before communication and relationships break down. It is typically associated with tribes and groups in society but the same principles can apply in business too.

Managers focus on the bigger systems

If people join the company and there is little orientation around the purpose, the mission, visions, goals and objectives, or there is no consistent approach to hiring against “values” then these new starters will naturally have little affinity to the main core business. This can happen in remote teams, but also in the HQ too if the existing culture is somewhat sporadic.

The natural thing for new starters to do is adopt the behaviours of the existing team. That team may live and breath the company purpose and values, or it may not. It may have made its own rules, ethos and values up – a natural reaction to no formal induction or sporadic management.

The main core business has a history, a story that the company tells about itself and it has cultural torch bearers – people who live and breath the business. As a company grows these people can’t be everywhere and it becomes harder to keep people connected the main core. It becomes harder to explain why the business works in the way it does. People (and teams) then make up their own culture, stories and values – and why not – there is nothing coming from the rest of the business.

At the heart of this problem is a lack of strong purpose, strong values that bind people, poor hiring, poor communication and sporadic and inconsistent management. It’s because of rapid growth, and the lack of good managers that live and breathe the values of the business, that this problem exists.

In many companies the induction process is the heart of the new starter journey and they place a huge emphasis on ensuring they hire and retain people who fit the values well. The problem is many companies have a hard time even defining what their values are, let alone hiring people that live them.

Hence, when people join, the induction process may feed them false values that don’t match the reality or there may be no induction to the values and core purpose at all. It’s not just about induction though, it’s about the flow of communication through a business too and the chasms that can grow between the main core of the business (Founders, Executives, Long term employees) and new departments, regions or groups of people.

When it is hard to describe your culture and what makes the business so good, it becomes hard to communicate that and find people that resonate with it.

When Dunbar’s Number is in play in a business you see tribes form, growth slow and fighting increasing.

The Symptoms

Some classic signs you have elements of Dunbar’s Number in play:

  • New people join and you have no idea who they are or what they do – sometimes they will have worked at the business for months or years before you find out about them. In fact, sometimes entire teams pop up and you’ve no idea what they do. This is especially prevalent in large organisations or rapid growth companies. Equally, people will leave and it may be months before you find out. Communication doesn’t flow unless it’s on the grapevine – and sometimes the grapevine is unbelievably reliable – but it should not be the main form of communication. This problem is always an exec and management problem. Usually it’s about ownership of communication, mostly it’s just a cultural issue that communication and transparency is not forthcoming. Mostly it’s because of inconsistent management.
  • Teams fight with each other and individual spats become much more visible and intense. There can be lots of bitching and snide comments and some teams don’t even talk to each other. The problems then escalate as people doubt the value others add or openly criticise someone/team they really know very little about.
  • Duplicate work happens with surprising regularity. People are trying to solve the same problems and even though intentions can be positive, the results can be time wasted, more fighting between teams and an inconsistent approach to solving systemic issues. This is a result of management and executives simply not talking, sharing or co-operating – a sign that barriers are high between people and teams.
  • Many people in the business spend a lot of time cleaning up other people’s messes. Failure Demand is high and sometimes entire teams are created to solve problems created earlier in the flow of work. The fact that few people question this is a sign that people may be too focused on their own world and not on the system at large.
  • People in the business will spend more time fighting internal problems than they do adding value to the customers. It can take weeks to do something that should be no more than an hours work. Patching and tactical fixes are the main approach leaders opt for, but it doesn’t solve the problem. Why would it? These are systemic problems and require bigger thinking. The problems are normally caused by customer work not flowing across functional boundaries – why? Because people aren’t talking, barriers are high and people share different views and values on how the work should be done.
  • The role of individuals grows, often not accompanied by more pay. People start to resent the extra work. They cling to their job titles and protect their work at all costs. Fiefdoms emerge and co-operation becomes a negative word.
  • The results from Engagement Surveys start to show a negative trend across typical areas of engagement. One exception is any question related to teamwork or friends at work – these show a steadying out or a rise. This is because people like those they work with (their tribe). These tribes are sometimes the only reason people remain at the place of work. The people they work with makes up for the other negative effects in play.
  • The business becomes very top heavy as executives start to believe that more process is the solution and more leadership is needed. You often find lots of layers of management, individual contributors who also manage (and do neither as well as they want to) and decision making being made only by executives and senior management. This command and control can often accelerate the problem as more barriers are raised and more “rules” are created on how work should flow. The path to leadership becomes the approach as the assumption is more leaders are required. The real solution is to fix the leadership you have and focus on the managers.
  • It becomes really hard to bring new people into the business. The learning curve for new joiners gets bigger as there is less visibility of how work flows due to fiefdoms and lack of communication. There are more documents to read and rules to become familiar with but none of these truly explain how work flows, or doesn’t, through the business.
  • It becomes slower to onboard new customers and the flow of work doesn’t flow so well. Work requires more tearing down and building up (to pass from department to department) and more metrics are gathered at an individual level (to work out who is at fault rather than to improve the work) for nothing more than allowing more command and control.
  • Innovation is stifled as new ideas don’t flow, collaboration isn’t natural and people keep themselves to themselves. Innovation thrives when people move around and share ideas – but little of this happens as there are few incentives to do so – people are trying too hard to deliver in a broken flow than spend time working with others to improve things – why should they? Tribes are now working against each other (not on purpose) than for the good of the business.
  • Decisions start being made based on myths, rumours and hearsay about departments rather than fully qualified data, measures or studies. Why would we go and study and get knowledge when we can rely on someone else’s opinion of what happens? This means reputations suffer and initiatives from the top rarely work. It kills morale even further.

Why does it happen?

It’s mostly because we tend to split into smaller groups and get our information, values and behaviours from those close to us when companies grow to 150 +. In the absence of a consistent company culture and clear, consistent communication from trusted sources, people tend to focus inwards on their own groups of people – the people they work with closely.

This isn’t a huge problem is everyone shares the same set of values – but if every team, or regional office, or department have different values and beliefs about work, then chaos can ensue.

Tribes form

As the company splits away from the core, smaller groups or tribes of people form. If you’re lucky you are in a tribe where the members and managers are still positively tied back to the main business. They may be early members of the business, cultural ambassadors or original founders. They may be long term employees who have seeded new teams and brought with them the very values and cultural norms of the main business.

If you’re not so lucky you may end up in a tribe where the members and managers are not positively connected back to the whole. Not that they are doing things to be negative, far from it – intentions are usually sound. They are simply forming their own culture, values and ways of working as nothing is forthcoming from the executive or management tiers or core of the business.

These loosely connected tribes start to defend their work, make up their own rules, only talk to those close (in location and job type) and start to build their own communication patterns and channels. This doesn’t just happen with remote offices but also within the head office itself.

The result is that people are not tied emotionally or behaviourally to the main mission and core values. The company starts to have eco-systems of different teams and tribes.

Sometimes these differences can be poles apart, especially when it comes to management. For example, one team may have a command and control manager, whereas another team may have a manager that hires good people and then leaves them alone.

The solution to Dunbar’s Number is to develop the management tier and define consistent values

At the heart of solving Dunbar’s Number is the need to reconnect all of the various tribes back to a single, clear and consistent set of values (and a purpose) that are lived and breathed by everyone in the business.

There may be a lot of work to define what these values are and align expectations about behaviours, but without it I don’t believe much else will work.

You cannot reconnect people back to the core through process and compliance, which is often what people try to force. It needs to be emotional.

The managers and execs must reconnect and lead by example. They must embrace the culture and ethos of the business and be torch bearers for it. They must connect with other managers and share the management responsibility for improving the system, the flow of work and the open and honest communication. (and this especially applies to execs).

Managers must become conduits of communication from the executives and feed back information, results and ideas from those in their teams. Even better, they should open up pathways of communication through all tiers.

If people become professional managers rather than individual contributors who also manage, then you often need fewer managers and it becomes easier to identify and train the managers.

If their approach to management was consistent you would have fewer disagreements about what is right or wrong or why some teams have more freedom than other.

If managers started to improve the flow of customer work through the system they would remove many of the barriers, improve processes and allow people to get more done. People could then focus on delivering value to customers, not banging their heads against internal friction.

Failure Demand would reduce, more accountability would be placed on managers and managers could all come together to solve genuine business problems. There would be less need to protect work and more clear direction about who is responsible for what.

In a nutshell management is the key to solving the very departmental and tribal splits that happen when there is no natural connection to the core. Managers become the connection to the core, and when it happens – it’s a powerful thing.

But in order to do this, it must be possible to explain what the core is (values, purpose, mission, approach to work) and it must be lived and breathed by executives and managers alike. And this can be very hard indeed.

Managers should act like founders of the business. And wouldn’t that be a wonderful thing?