Friday, March 23

In search of a magic number? Try 150

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Bear this number in mind when aligning your organisation around the customer.

It’s become more than a cliché but people (including me) are still writing articles with a compelling number in the headline as these are thought to get people clicking more avidly than a title without. (I suppose Paul Simon’s hit “50 Ways to Leave Your Lover” would have had less impact if it had been titled “How to Leave Your Lover”, or “Leaving Your Lover: Some Thoughts”.)

This week I’ve been attracted to the number 150, and you should be too, as it gives organisation designers a useful rule of thumb on the effective size of an organisational unit.

The origin of this thought came from looking at the website of AND Digital. This innovative and rapidly-growing digital development business is organised into a number of Squads – small teams with a mix of developers and analysts covering a range of experience and six of these Squads make up autonomous Clubs, each of which has its own club house and a total focus on its own people and clients.

Club size is limited to 100 people and this chimed with me as, despite working in organisations of over 100,000 employees I have always felt more involved with a much smaller unit. And it also reminded me of a book I had read – “Managing the Human Animal” by London Business School professor Nigel Nicholson – which identifies 150 as the maximum number of members of a kinship group.

150 ways…

Turns out this number is no accident but an outcome of our evolution as a species. Nicholson’s book is concerned with evolutionary psychology – and specifically how our modern society and the way it is organised does not pay enough attention to the slower evolutionary pace of our brains’ development.

The number of 150 was arrived at by psychologist Robin Dunbar, who looked at the size of the neocortex – crudely put, the bit of our brain that makes us human – and the size of primate communities. He found that, for humans, 150 is the maximum size of the community that our brains can navigate. As Nicholson points out, our evolution as semi-nomadic kinship groups meant that our brains developed to cope with this optimum size – any larger and the group was too large to support itself, and if too small it could not generate enough resource.

What has this to do with supercompany performance?

In the case of AND Digital this was a conscious design choice based on the Rule of 150 and their current recruitment drive suggests a high rate of growth. But I’m not going to suggest that copying their model exactly would be right for everyone or that doing so would automatically create higher levels of performance.

Make a new plan, Stan

Companies that want to become more customer-centric certainly will have to create a new design for their organisations. Sadly, many do not and paste customer experience on top of what they already do – hence the lack of impact for many. I was pleased to hear that one major UK bank has recently moved its 15,000 IT and change staff into 15 integrated teams organised around key colleague or customer journeys. This is an excellent start point but the effectiveness of such an organisation will be in the ability to make each unit of (presumably) 1,000 people – a tribe in Nicholson and Dunbar’s work – work effectively across smaller groups.

Making sure such redesigns – and the processes that support them – go with the grain of human evolution rather than against it is a subtle and sophisticated art. But as a guideline, bearing the number 150 in mind is not a bad start.

(Thanks to AND Digital advisory board member Mark Zawacki for sowing the seed of this piece in my mind.)



About Author

Business strategist, consultant and change manager who helps companies become genuinely customer-centric. Nick delivers customer-driven business transformation projects and has worked across many industries including banking and finance, insurance, telecommunications, industrial and public sector. Has held senior roles with variety of blue chip names including BT, Royal Bank of Scotland, CSC and Sema Group. Currently Head of Delivery at NextTen Innovation Solutions

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