A few years ago I used to work for a big company with hundreds of people I didn’t know at all. After two years, I quit and joined a small company with 30 or so people. I’m still at that company, but during these past three and a half years it has evolved into a a medium sized company with more than five times the original head count.
It may not be evident, but size matters when talking of companies.
A smaller company creates happier people.
In his book, The Tipping Point: How Little Things Can Make a Big Difference, Malcolm Gladwell claims that 150 is a magical boundary that changes a lot of things. Apparently when a group of people grows beyond that size, it becomes impossible for us to keep track on all the people in the group and their relations between each other.
I don’t know about you, but to me 150 sounds like a lot of people.
There is another magical number in psychology as well: seven (plus or minus two). It’s a number used for quantifying the limits of our working memory, as well as many other cognitive capabilities. And not only that, seven is also considered a perfect number in many religions such as Judaism, Christianity, Islam and Buddhism.
So why not also as a limit for company sizes? Here are seven minus two reasons why your company should never grow beyond seven people.
1. Less hierarchies
A bigger company means more layers of managers between people.
In a small company Todd the programmer would go straight to Jean from marketing for marketing issues. But when the company grows, this changes: Todd talks to his boss Susan. Susan talks to Jean’s boss Mark. And Mark finally goes to deliver the message to Jean.
What a complete waste of everyone’s time and money. But more importantly, it separates Todd the programmer from the good folks in the marketing department.
2. More participation
In a small company everyone is involved in everything.
It doesn’t matter if your title is Engineer, you can still visit the client’s premises to do some support work, or chat with the CEO about the future of the company.
But would that happen at Microsoft?
I doubt it.
They would never send their programmers to handle customer relations.
And I suppose Mr. Ballmer is way too busy to listen to my ideas on how he should be leading the company. He only has time to talk to his core team: people like Bill Gates, Paul Allen and Ray Ozzie.
But in a small company everyone is in the core team.
3. A better understanding of the big picture
When you are involved in pretty much every aspect of the company, you always know what’s going on.
In a big company, if you aren’t at the top of the management pyramid, someone hands out tasks to you, saying “This is really important to the company.”
But that doesn’t make you feel that the job is important. The only thing that does is the knowledge of the business decisions behind the task.
The understanding of the big picture.
4. A feeling of ownership
I’m not afraid to say that in my current job, my main feeling is “I just work here”. I’m not saying it with a negative tone or anything. It’s just a fact. This is a pretty good job, but it’s still just a job.
I just work here.
But when you understand the big picture behind the decisions and participate in making them, things change. You start feeling that you are an important part of the company. This is what researchers and managers would call the feeling of ownership.
And no, you don’t gain that feeling by getting stock options. You get it by participation.
And that can only happen in a small company.
5. Closer relations
A common saying is that you need to have at least one good friend at the office to be happy at work. It makes sense.
But what if you could be friends with everyone in the company? Even best friends?
This sounds utopistic to most because we’re immediately thinking about the big companies in which we spend our days. There is no way I could be best friends with all the 150+ people in this company.
So if we want to make the goal come true, we need to change the reality: In small companies where everyone works closely together with each other, feels like owners, participates in decision making and understands the big picture, being best friends is the natural end result.
So, I challenge you: don’t grow your company. Outsource. Be careful and recruit only people who fit in your corporate culture. But don’t grow if you want to keep your people happy.