Organizational Size Classes

June 30, 2016

The best thing about organizations is that they are made of people. However, just as more money causes more problems, so it is with people. In fact, the number of people in an organization may be the most important signal in understanding how it thinks and acts.

For example, there’s a huge transition when a company grows beyond Dunbar’s number, since when a company grows beyond 150 people, it effectively splits into multiple organizations. The other big discontinuity in how a company works – the one that’s more interesting to me due to it currently staring me in the face – happens around 15 people.

You see, a small company is a thing of beauty. Everybody is on the same page. You know what each other are up to, you know how each other think, and everyone being in the same Slack channel doesn’t drive you bananas. You can have lunch together. You don’t have teams, managers, direct reports, and you certainly don’t have departments. You just have folks doing stuff, with maybe one or two people coordinating, and it’s great.

I have a lot of love for small, flat teams, and when we started Steamclock six years ago the idea was to build the best small team in Vancouver. My love for indie software companies has always been intertwined with my love for small teams. The idea of every employee actually designing or developing software is delightful.

Unfortunately though, a leader can only directly lead a certain number of people. Much beyond 10, and things start to fall through the cracks. The team gets out of sync and people don’t get the support they need. In a one-level team you can often stretch it to 15, but at that point there are two main solutions: stop growing, or start adopting some sort of management structure.

Growth wasn’t a goal when we started Steamclock. The fact that we’re at 12 people still seems odd to me some days. One thing I’ve learned over the years, though, is that while overly aggressive growth is dangerous, stagnancy can be too. Specifically, growth opens opportunities for your people to grow with your company rather than outgrow it. While the most important aspect of this is retaining employees, the same goes for founders. In retrospect, I think that the slow ramp in challenge in my job as we’ve grown is what’s kept me engaged and enjoying this job longer than any I’ve ever had.

Yet now that Pikelet is fast approaching, I’ve been spending a lot of time thinking about how the company is going to roll while I’m on parental leave. It turns out, too often I’ve been the bottleneck to a given project or process, often for no good reason. Where at 5 people it felt like the team was accelerating me, at 12 people it’s sometimes felt like I’m slowing them down.

So, more and more, I’ve been working consciously to push information, trust, and authority to the team. When somebody asks me a question where the answer is clear, I try not to just answer it, but spread the philosophy behind the answer. When somebody asks for information or access that only I have, I think about how to open that up. I’m constantly looking for ways to not be a bottleneck or switchboard. Years ago if I saw two people collaborating on something that I didn’t know about, it would make me uncomfortable – now it makes me proud.

Now, despite these efforts, if we grow larger than 15 or 20, then we’re probably going to need some sort of management structure. This still weirds me out, but increasingly, I can see it working really well. I’ve had some great managers in my career, and I’ve seen how they can provide support, give feedback, help define the mission, and bring attention to problems before shit gets real. Ideally, then, I can work increasingly on the business, rather than just in it.

And, you know, raise a baby.

© Allen Pike. See also Twitter and Steamclock.