Watch out for Dunbar’s Number

dunbars-number

This post is for growing companies as opposed to startups. So once you have VC capital to scale and you are hiring like crazy you need to think about organizational design. But that’s a topic for another day.

Today’s topic is Dunbar’s Number “a suggested cognitive limit to the number of people with whom one can maintain stable social relationships” British anthropologist proposed this limit at 150.

So how does this apply to high growth companies? You’ll be in for a phase change when your headcount hits 150 – as a founder you will no longer be on a first name basis with everyone who works at your firm. That cozy, collegial corporate startup culture you’ve been in will be morphing to that of a high growth company.

This may be apocryphal, but I recall hearing that when Bill Gates was CEO of Microsoft years ago whenever a group at Microsoft started to hit Dunbar’s number – 150 people – he broke the group up into smaller unit to help avoid the communications, collaboration and coordination issues that start emerging when you exceed Dunbar’s number. And for a very long time Microsoft was fast and very nimble for a large, growing company.

So don’t get so enamored of hiring – which, btw, is the easiest thing to do in a venture capital fueled company – see my post on Hiring Slowly, Firing Quickly – that you don’t keep you eye on the growth meter and have an organizational design that will help you split up groups that get the Dunbar red line.

Author: Mentorphile

Mentor, coach, and advisor to entrepreneurs, small businesses, and non-profit organizations. General manager with significant experience in both for-profit and non-profit organizations. Focus on media and information. On founding team of four venture-backed companies. Currently Chairman of Popsleuth, Inc., maker of the Endorfyn app for keeping fans updated on new stuff from their favorite artists.

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