The 150-Employee Tipping Point

The 150-Employee Tipping Point

Oxford evolutionary psychologist Robin Dunbar is most famous for his theory that humans can only maintain personal relationships with about 150 people at any given time, so much so that the figure is referred to as “Dunbar’s number.” Quartz’s Kevin Delaney explores the application of Dunbar’s number to management in the context of growing startups:

“There is no question that the dynamics of organizations change once they exceed about 150 or so,” says Dunbar. “The [Hutterite faith group] deliberately split their communities at this size in order to avoid having to have both hierarchies and a police force. Keeping things below 150 means you can manage the system by peer pressure, whereas above 150 you need some kind of top down, discipline-based management system.”

At a startup, once the staff exceeds 150 people, employees are no longer the single, cohesive, culture-reinforcing unit they were during the company’s earliest days. Staffers become more specialized and entrenched with their teams, which are probably sprawled across an office, perhaps on multiple floors or in several locations.

“It’s a conversation I’ve had with every single CEO I know who’s had a company that’s moved from 150 to 300 people,” says Patty McCord, who was chief talent officer at Netflix from 1998 to 2012, having joined when the video-streaming company was just about 30 people. …

McCord advises that once a company grows beyond the 150-employee mark, it’s all the more crucial that leaders “be able to articulate on a pretty regular basis where we’re going, what we’re doing, what we’re not doing.” For employees, she says, this is when company culture and identity become less about being part of a single tribe of co-workers and, ideally, more about the customers they serve.