The Rule of 150 - Dunbars Number and business growth

The Rule of 150 - Dunbars Number and business growth

The Rule of 150, or Dunbar’s Number is a suggestion that there is an upper limit to the number of connections humans can make before communication and relationships break down.

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, the harder it can become to keep people talking.

Dunbar’s number is a suggested  cognitive limit to the number of people with whom one can maintain stable  social relationships—relationships in which an  individual knows who each person is and how each person relates to every other person. [1] [2] This number was first proposed in the 1990s by British  anthropologist  Robin Dunbar, who found a correlation between primate brain size and average social group size.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.
From wikipedia.

As companies grow and scale you may see communication slowing down and cohesion between departments crumbling, as a connection to the main core of the business becomes much harder to maintain. As your employee base grows past around 150 (although the number does and will fluctuate) it becomes harder for employees to remain connected to each other. This is Dunbars Number – the rule of 150 in action.

It’s natural for new starters to adopt the behaviours of the existing team too. As more people join they will form closer ties and bonds to those they are working with.

That team may live and breath the company purpose and values, or they may not. They may have made up their own rules, ethos, purpose and values – a natural reaction to no strong connection to the core business.

The Core of a business – and why the rule of 150 is important

Your company has a history. It was founded and created somewhere by someone. It has a journey it has been on and a story to tell. People who have been on this journey live and breath the business. The business is an outward expression of those who created it and have built it. These people who live and breath the business extol the very values the company tries to embody.

As a company grows it is natural that these people cannot be everywhere, or be part of every team. New people come in, change will happen.

As people join, unless you have hired carefully, on-boarded people effectively, have strong clear communication from leaders and consistent management in place, it becomes harder to keep people connected to the core of the business – to the rich history that got it to where it is now. It becomes harder to explain why the business works in the way it does, why people do what they do and what is expected from everyone. The rule of 150 is playing out as you grow. Is it at 150 people when these connections to the core happen? Probably not, but it’s a good indicator to look for.

When many more people join the company and new teams form, it’s natural that they may forge their own way of working, with their own values, purpose and acceptable behaviours. In some cases, if guided by the values of the business, this is not a bad thing, but when left unchecked, and with little steer from the core business, isolation can occur. In some companies it can feel like several smaller businesses; each one with different values, goals and history to tell.

At the heart of this problem is a lack of clarity over the company history, purpose for existing and story to date. It’s made worse by poor hiring and a weak induction process – precisely why I wrote Join our Company – as a field guide to ensure a rich, interesting and coherent recruitment and onboarding process.

In companies that show the rule of 150 clearly, people join the business but don’t get told the story, the heart of the business and are not exposed to the emotion surrounding the business. In many companies the induction process is the heart of the new starter journey. Many managers place a huge emphasis on ensuring they hire the right people, bring them in to the business in the right way and retain these good people. Always ensuring they explain the journey to date and the predicted next steps of the business story.

The problem is that many companies have a hard time even defining what their purpose and values are, let alone hiring people that live them. Hence, when people join, the induction process may feed them company values that aren’t actually lived, there may not even be an induction process or managers may not even realise (or care) that hiring people that share the same passion for the business even matters.

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, HQ departments) and new departments, regions or groups of people.

When it is hard to describe your culture and what makes your business so good, it becomes hard to communicate that to new starters, isolated teams or new departments. It becomes even harder to hire people as you have no idea what you’re looking for.

The Symptoms of the rule of 150

Some classic signs you may have elements of The rule of 150 or Dunbar’s Number in play (although there may be many other reasons):

  • 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.
  • People 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 shouldn’t be the main form of communication.
  • Teams fight with each other and individual spats become much more visible and intense.
    • There can be lots of negativity and snide comments and some teams don’t even talk to each other.
    • The problems escalate as people doubt the value others add or openly criticise others that they actually know very little about.
  • Duplicate work happens with surprising regularity.
    • People are trying to solve the same problems and even though their intentions are positive, the results can be time wasted, more fighting between teams and an inconsistent approach to solving systemic issues (all of which belong to management).
  • Many people in the business spend a lot of time cleaning up other people’s failures.
    • 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 how everyone’s work strings together and adds value.
  • 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 to process problems are implemented but they don’t work long term. Why would they? These are systemic, cross team problems and require bigger thinking, management involvement and support from executives.
  • Individuals often pick up work and roles that are actually gaps in the workforce
    • As divides grow it’s common to see gaps in work flow.
    • Effective employees often step in to fill the gaps but this is not sustainable – it often doesn’t have more pay, recognition or acknowledgement.
    • 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 business becomes very top heavy.
    • Executives start to believe that more management, executive presence and process is the solution to the lack of solidarity and chaos. More leadership is needed. Not true – better leadership tying people back to the core is the solution here.
    • Command and control comes in as the problems deepen – how else can you solve this problem other than by just telling people to work better together and talk to each other?
    • Why aren’t people doing what they are told?
  • It becomes 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.
    • Ironically, managers insist on creating more documents to read, rules to follow, intranets to store information, processes to work around deep rooted problems and more objectives to achieve – the reality is this makes it worse.
    • It gives people even more reason not to gather where the work is and cooperate and fix the relationship problems.
  • It becomes slower to onboard new customers and the flow of work doesn’t flow well.
    • Work requires more tearing down and building up (to pass from department to department according to those rules) and more metrics are gathered at an individual level (to work out who is at fault (or how much each team costs) rather than to improve the work).
  • Innovation is stifled
    • New ideas don’t flow, collaboration isn’t natural and people keep themselves to themselves.
    • Innovation thrives when people move around and share ideas in a safe environment.
    • However, as teams split and communication breaks down it is no longer safe to air ideas of innovation.
  • Decisions are made based on myths, rumours and hear-say 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. This just fuels the mis-conceptions of effectiveness between teams.
  • Managers start to look after just their part of the business, often disconnecting and retracting away from the core.
    • After all, with all of the chaos that is ensuing, to get our results we must focus just on what is ours.
    • Shared goals across teams is a good way to bridge this problem

Why does it happen? The rule of 150 in action.

If we use Dunbar’s Number to explain this, it’s simply because companies grow, reach a certain number of people and then start to lose the glue that once bound them together.

Companies with a consistent culture with strong values (that are lived) and a strong, compelling purpose often overcome these challenges. They do this by hiring strategically, on-boarding people in a consistent and effective way and having very consistent approaches to management/leadership – all bound together with a consistent and clear communications from leaders and managers. They operate from the heart of the business and ensure clarity and alignment across the growing spread of the business.

But if every team, or regional office, or department have different values and beliefs about work, and measures that see them competing with others, and inconsistent agreements on how work should flow, and little communication flowing, then they make up their own rules.

Groups form

As the company grows, smaller groups of people form. Some groups are still heavily connected to the core with group members and managers that 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. They are the living embodiment of the business.

Some groups will not remain connected to the core with members and managers that are not positively connected back to the whole. They will form their own tight bonds and define their own ways of working.

These loosely connected groups start to protect 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. It’s natural. It’s the rule of 150 in action.

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 groups, sometimes at odds with each other, sometimes even competing.

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 The rule of 150 is to develop the management tier

At the heart of solving the rule of 150, is the need to reconnect all of the various groups and people back to a single, clear and consistent set of values (and a purpose and vision) that are lived and breathed by as many people as possible in the business.

There can often be a lot of work to define what the purpose and values are in the first place, let alone align behaviours. Managers are perfectly placed to keep the connection to the whole and to bring with them the main story, heart and values.

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. People need to feel an emotional connection to the business. And emotions are conveyed by people.

Managers and Execs especially, 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 their managers and share the management responsibility for improving the system, the flow of work and open and honest communication. They must show passion and enthusiasm – and be consistent in what they all say. They should understand the history and journey of the business, and weave this into their strategies, plans and action, all the while heading to an agreed painted picture or True North.

Managers must become conduits of communication from the executives and feed back information to their teams. They must also surface the truth from the ground. The business results and ideas from those in their teams. Even better, they should open up pathways of communication through all tiers. It is NOT easy. Self preservation can be a real thing, but who said management was easy?

When forming new teams or departments, it’s a great idea to seed that team with someone who lives and breathes the company values. Someone who is a torch bearer, maybe even someone who has been along for the growth journey. They will create new teams with this in mind. They will hold a personal connection back to the main core of the business. They will be the glue – and grow a new group who are connected to the heart of the business.

In a nutshell, management is the key to solving the very departmental and group splits that happen when there is no natural connection to the core business. To solve the rule of 150 managers are extremely well placed to extend the business story and contribute to it. Managers become the connection to the core and must work to keep those connections alive (and remove blockers to getting good work done).

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 – otherwise they are just words. And when the core company loses it’s reason to exist and no longer has positive core values at it’s heart – there is nothing left to connect back to.

In a sense, to counter the rule of 150, leaders, managers and employees should act like founders of the business. And wouldn’t that be a wonderful thing?