The simple principle that keeps large groups connected

“OK, so what have we found?” asked Kathy, CEO of a mid-size manufacturer, about 1600 people.

“We’ve found a possible cause of the issues coming out of your Eastern plant” I replied, putting on the table a diagram known as a Levels of Work Analysis.  The diagram is like an X-Ray for organisational design – it shows clearly the cracks and splinters in the org design itself that are causing frustration and lack of delivery.

Kathy leaned forward and pointed at the clearly marked red areas.  “What’s going on there?”

“I need to give you a quick bit of lingo” I said.  “We use some fundamental principles that, if in place, will see frustration down and delivery up.  One of these is about having what we call building blocks in place to make sure that our natural need for connection isn’t accidentally designed out.”

Kathy’s eyebrows went up.  I waited to check I was making sense.  “Go on” she said.

“The first building block is the basic team structure.   But above that we have the wider structure, or the three-tier structure.  The fancy term for it Elliott Jaques coined was the ‘Mutual Recognition Unit’, or ‘MRU’.”

“Fancy indeed” Kathy commented.  “So how does this help me?”

“Because of nature” I continued.  “There have been numerous studies of tribe sizes in people, of groups of different animals, and although an exact number doesn’t emerge, we consistently see somewhere between 150 and 250 as the range above which, well….things start to go wrong.”

“A team of 250 people!  Of course that’s going to go wrong!”

“Not a team.  A three-tier unit.  Take your structure – frontline staff / Team Leaders, then Managers, then Directors.  Three tiers.  What we’re saying is that if this goes above 150….we’re entering the risky zone, and above 250…problems are very likely.”

“Problems?”

“Yep, problems, all based on disconnection.  Change won’t be believed in, lack of trust in this thing called ‘management’, and even union action in response to what you might see as reasonable responses to the market”.

“And why does this happen?”

“Because, above these numbers, people can’t be 100% confident that their Director would recognise them as being part of their unit.  The feeling of ‘strangers in our midst’ starts to occur”.

“I’ve heard of this before” said Kathy, sitting back.   “Dunbar’s number.  The number of social relationships someone can maintain is about 150″.

“That’s the one” I said.  “And how does your Eastern plant currently run?”

“Well Rick is the Director there, reporting to Sanjay my GM Operations.”

“How many people under Rick?”

“900” said Kathy. She paused.  Then sighed.  “I can see that’s not going to work”.

“So what’s the real question here?”

Kathy looked at me, gestured for me to continue.

“Your real question is whether you are willing to insist, as the CEO, on your GMs designing their areas in a way that follows natural principles on how people connect as a group.  Because if so…”

“If so…” Kathy took over…”the way my GM of Operations has always worked is going to have to change.”

“Yep.”