The Two Pizza Rule
Why the two pizza team makes your company more productive
The two pizza team approach was popularized by Jeff Bezos, but the approach is not new. You’ve probably heard the story about Steve Jobs being ruthless about the number of attendees to a meeting. Drake Baer noted a couple of these stories in his article for BI. Jobs declined to meet with President Obama and other technology moguls because the group was too big. Jobs also routinely dismissed people from meetings if he felt they were not core to the meeting. Keeping meetings and teams to a manageable size can have dramatic impacts on the efficiency and cost-effectiveness of your business.
There are numerous reasons why limiting a team size is important, here are a few.
- Cost effective meetings
- Manageable teams
Cost Effective Meetings
Meetings are universally derided in modern business. There are books, comics, and YouTube videos pointing out the amount of time wasted in meetings. Many meetings could simply be replaced with a weekly email, or even better, with a collaboration tool like Asana or Slack. Next time you are sitting in a meeting think about the cost of that meeting based on how many people are in the room. 12 people, making an average of $70,000/yr, meeting for 1hr once a week? That costs the company $23,764 per year. Let’s scale that back to 4 people. Now that meeting costs $7,904 per year and we saved $15,000 a year. It’s not just the cost of the pizzas that matter. It’s a measure of how many people are required to commit to a certain project or initiative.
A manager should never have more than 10–12 direct reports. Ideally, teams should be 6–8 people. How many pizzas would you order for 6–8 people? Correct, two pizzas. Well managed teams have something universal in common. A strong relationship between the manager and the peers. Historically management relied on role power to direct teams. This approach typically manifests in directing the team through fear. Fear of being fired, fear of being reprimanded, or fear of humiliation. Sure you can produce short-term results, but anyone who has ever worked for a “mean boss” can tell you, the returns are diminishing. A manager that has a relationship with their direct reports will be able to produce greater results for the long term by appealing to a sense of loyalty and self-worth. This relationship-based approach to management is built on developing a connection with the staff in the first place. If a manager has 10–20 reports, people will be left out. It’s simply not possible for a person to nurture a working relationship with so many people. In addition, the team will naturally form sub-groups within the team and thus damage the potential relationships of the peers in the team. Having smaller more focused teams will limit meeting size and ensure productive relationships within that team.
There is a psychological phenomenon called diffusion of responsibility. A great example of this when a group witnesses an emergency the more people that witness it, the less likely that anyone is to take action. Groups of people will assume that someone else will take responsibility. This is true in business as well. When someone sends a generic email to a group of people asking them to do a task, very few will act on it. Also, if a team observes a problem at work, the larger that group, the less likely they are to raise that issue with peers or management. People tend to assume that everyone is aware and therefore someone else will take action. Inaction is often assumed to be an indication that no one cares about the issue. A small two pizza team will have a higher degree of accountability. Peers will be more likely to keep each other in check and the level of personal accountability to the team and its deliverables will be higher as well. Contrary to popular opinion people are not lazy and want to achieve great results. They just often lack the conditions to facilitate it. A smaller team will allow a pride of ownership that is more likely to breed better results. A smaller team also simplifies responsibility and delegation of duties to individuals instead of groups of individuals.
Communication is a pillar of any successful business or group. Even small businesses tend to struggle with effectively and efficiently communicating with staff. Modern businesses will use technology to try to communicate to everyone, but as with many issues in business, technology does not solve human issues. “Did you get the memo?” This is an outdated phrase from years past, but it’s no different than the more modern form of “Did you read the email?” or “Did you see the bulletin?” In most cases, a more human touch is required when communicating to teams. A typical method in organizations is the waterfall approach. Executives communicate to leadership and leadership carries that communication to staff. A great manager will not simply repeat the messaging verbatim but will re-interpret the message for their team specifically. How does this event or direction impact our work? How does this initiative change our priorities? Helping teams to digest corporate communication is much simpler when there is a tighter focus and a smaller team. Another benefit to smaller two pizza teams is it helps to contain information. Everyone has been on one of those email chains with 20 CCs that just never ends. Using collaboration tools like Slack can contain the team communication to the relevant parties, while still allowing that information to be shared with others if required.
Small companies that are growing past 10 people are the first to struggle with the issues that result from a growing team. Companies that are scaling past 30 or 50 people suffer again from these growing pains. Scaling a team is difficult and requires a focused effort on training leadership and management skills into your promising staff. Anyone that manages a team should identify their right-hand in that team. Whether you are a small business owner with 10 staff or a front-line manager with 4–6 staff, find the person on your team that you would leave in charge if you’re on vacation. Work with intention to develop that persons leadership skills. If appropriate designate them as the team leader. A team lead is different from a manager, they are a part of the team and are less likely to be treated as management. They can help facilitate communication and problem escalation for you. When the team grows you have a built in leader that you’ve been coaching. If they are interested in taking on more leadership responsibilities they can take on a team of their own. Don’t let your teams grow beyond management. Keep them to a two pizza limit and everyone will benefit.