Are Smaller Teams Better?
You have probably come across some variation of this image, which visualizes how the number of links in a system grows exponentially, when we add one more node. In this form it’s frequently used as an argument for small teams (where the nodes are the team members and the links are the communication paths between them).
Of course there’s nothing to argue against the simple math of these graphs. But the conclusions folks often draw from it, seem overly simplistic to me. The argument usually goes like this: “As we can see, communication paths grow exponentially in bigger teams. And we all know that communication is expensive and critical for effective team work, so we want to keep it to a minimum. Hence, teams should be small.”
There’s quite a lot to unpack here (and I am not even going to talk about the obvious nonsense that if we strictly follow this logic, the recommendation should be having only teams of one, or possibly two people). Let’s focus on the three aspects of transactive memory, cross-functionality and external coordination.
Transactive Memory
The graphs imply that in an effective team, all team members communicate with each other all the time, which is just not true. One important reason for this is what is called transactive memory, a critical property of effective teams. Simply put, it means that team members not only have certain skills and knowledge, but they also know which team member knows what and therefore can direct their questions to specific individuals, instead of the whole group. So in a team of eight, a more realistic communication pattern would look more like this at any given time: Some team members communicate a lot with several other members, some only communicate with some, some communicate only lightly, and sometimes no communication is needed at all.
Interestingly, we can make an argument, which goes in a very different direction: If we see a team in which all team members are communicating with each other all the time, it could be interpreted as a signal that the teams hasn’t matured fully, because they haven’t yet built an effective transactive memory.
Team Size and Cross-functionality
I might sound like a broken record, but there’s a tradeoff between team size and cross-functionality (and member stability, which I am going to ignore in this post). You can read more about the Triangle of Teaming in this post. Yes, on the one hand it would be more efficient to have smaller teams. On the other hand, smaller teams usually mean having less diverse skills in the team, which makes it less cross-functional. So to exaggerate things a bit, we could ask: What’s the point of having small teams which can’t deliver anything of value? Which directly leads to my final aspect: the cost of internal and external coordination.
External Coordination
The argument for small teams focuses very much on single teams and how to optimize them. In many organizations, however, products are unfortunately no longer completely built by individual teams, but by collaboration of several teams. And everyone who has ever worked in such an environment will probably agree that it can be a huge challenge to coordinate multiple teams. Ironically, optimizing teams by keeping them small might lead to suboptimizing the multi-team setup. In this talk (which I highly recommend¹), Larry Maccherone puts it very eloquently: “I think the cost of coordination between teams is sometimes a bigger factor to consider than the cost of coordination on teams. So in larger organizations, sometimes it’s actually more efficient to have larger teams so you have less cost of coordination between teams.”
To illustrate this we can compare two setups: In the first case we have four groups of eight, and in the second case we have eight group of four members. While the total numbers of links is of course bigger in the first scenario, the number of links between teams is much smaller.
Conclusion
While I do believe that teams are often too big, it’s at the same time too simplistic to argue that smaller teams are always better. There are many different dimensions that need to be taken into account: What’s a good tradeoff for us between team size and cross-functionality? How mature are our teams? And, maybe most importantly: How do we balance internal team coordination cost with external coordination cost when operating in a multi-team environment? Unfortunately there (once again) seems to be no one-size-fits-all solution, and we need to figure out what works best in our context.
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¹ The talk is more than ten years old and still pure gold. One other aspect regarding team size that Larry points out is that he found in his data that small teams tend to be more productive, but quality tends to be better in bigger teams.
Mit vielen Teams viel schneller liefern
Im Juni halte ich zusammen mit meinem Bruder Stefan eine Schulung zum Thema Team-of-Teams. Ort und Termin: 11./12.06.2025 in Hamburg
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