The Rule of 150: Why Growing Organisations Lose Clarity, Connection, and Value

The Rule of 150: Why Growing Organisations Lose Their Story

The Rule of 150 — often referred to as Dunbar’s Number — suggests there may be a cognitive limit to the number of stable social relationships humans can maintain before communication and cohesion begin to fray.

It’s important to say this clearly:
the science behind Dunbar’s Number is contested. The number itself is not precise, fixed, or universally valid.

But as a lens, it remains surprisingly useful.

Because what it really points to isn’t a number —
it’s a moment.

A moment when organisations grow beyond easy familiarity.
A moment when shared understanding weakens.
A moment when the story that once held everything together starts to fade.

Growth Changes the Shape of Communication

As organisations scale, communication doesn’t just increase — it multiplies.

More people means more connections.
More connections mean more chances for misunderstanding, drift, and duplication.
And without deliberate care, people stop talking through the system and start working around it.

New starters arrive without a lived sense of the organisation’s history.
Remote teams form bonds locally but lose connection to the whole.
Even headquarters can fragment if culture is inconsistent or poorly articulated.

People naturally adopt the behaviours of those closest to them.

If those behaviours are grounded in the organisation’s purpose and values, that’s healthy.
If they’re not, new micro-cultures form — each with their own rules, priorities, and stories.

This is not a failure of people.
It’s a predictable outcome of growth without clarity.

The Core of the Business Is a Story

Every organisation has a centre of gravity and a story to tell.

It’s made up of the people who shaped it — founders, early employees, long-standing contributors — those who carry the memory of why the organisation exists and how it learned to survive and how it got to where it is now.

At any point in time, the business is an outward expression of those people.

But as the organisation grows, those people cannot be everywhere.

Unless the story is intentionally carried forward — through hiring, onboarding, leadership, and daily behaviour — connection to the core weakens.

And when people lose the story, they lose context:

• why decisions are made
• why work flows the way it does
• what “good” actually looks like here

This is where the Rule of 150 quietly begins to show itself — not at a precise headcount, but at the point where shared meaning no longer travels naturally.

Sub-Cultures Are Natural — Isolation Is Not

As teams grow, sub-cultures will form.
This is not inherently bad.

Problems arise when those groups:

• stop understanding how their work creates value for customers
• stop trusting other teams’ intentions
• optimise locally at the expense of the whole

The organisation starts to feel like several smaller businesses sharing a logo.

At this point, work fragments:

• the same problems are solved multiple times
• value-creating work is drowned out by coordination
• people spend more time fixing internal issues than serving customers

From an Idea → Value perspective, this is where cost explodes.

Not because people aren’t working —
but because energy is no longer aligned toward outcomes.

The Symptoms Are Human Before They Are Structural

You’ll recognise this stage when:

• new people join and no one knows who they are or what they do
• people leave and the news arrives months later
• teams openly criticise one another without understanding constraints
• duplicate work appears with surprising regularity
• “failure demand” grows — teams cleaning up problems created elsewhere
• effective individuals quietly fill systemic gaps until they burn out

Eventually, leadership responds with more process, more governance, more reporting.

But process cannot restore connection.
Compliance cannot replace care.

The system becomes anxious, not agile.

When Clarity Breaks, Value Stops Flowing

Most customer value crosses multiple functions before it becomes real.

When teams are disconnected, value slows.
When priorities compete, work stalls mid-stream.
When investment is spread thin, nothing finishes.

This is why investment must come before action.

Until leaders decide where energy will flow — and where it will not —
the system cannot move easily from idea to value.

Managers Are the Missing Link

The real solution to the Rule of 150 is not structure.
It’s management as connection.

Managers sit at the boundary:
between strategy and the reality of implementation,
between the organisation’s past and its future,
between people and the system they are part of.

They carry the story — or they don’t.

You cannot reconnect people to the core through policy.
It must be emotional, lived, and consistent. That's why stories about the business work; stories are emotional.

Managers must:

• understand the organisation’s history and purpose
• act as conduits of communication, not filters
• surface truth from the ground and carry it upward
• seed new teams with cultural continuity
• remove blockers to good work, not add new controls

When new teams form, seeding them with people who live the story matters more than any org chart.

Act Like Founders

In the end, countering the Rule of 150 requires something simple — and demanding.

Leaders, managers, and employees must act like founders.

Founders care about the whole.
They understand the story.
They protect energy.
They connect decisions to value.
They understand (and live and breathe) the painted picture of the future.

When organisations do this well, growth doesn’t dilute culture —
it extends it.

And when the story holds, people don’t just work together —
they belong to something worth building. They also write the next positive chapters of the story. And that, is a wonderful thing to be part of.