When the new can no longer be handled by calling across the room

As long as an organisation is small, the new succeeds on the side. That changes, and nobody decides when.

Calling across the room is a strength

In a small organisation, the second mainstay needs no order of its own. People sit close together, call out to each other what is coming up, and a new undertaking is led in conversation, just like everything else. That works surprisingly well, and it is wise to handle it this way, because a small company does not need bureaucracy. This logic of calling across the room is a strength, not a failing.

The built-in limit

But it has a built-in limit, and that limit can even be expressed in numbers. The number of possible lines of conversation in a group grows with the square of the people involved:

Five people have ten possible connections.
Ten people already have forty-five.
Twenty people have one hundred and ninety.

So it is not the number of people that becomes the problem, but the number of connections between them – and that grows far faster than the organisation itself.

How the limit feels at different sizes

How it feels depends on size. It is worth walking along the path that many companies take. The following sizes are our thesis: a value from practical experience, not a study. The transitions are fluid.

At around ten employees the person in charge is usually right in the thick of it. They lead the new personally because they have everything in view anyway. That works well as long as they are there. The growing price is that nothing of what they do is recorded anywhere else.

At thirty to sixty employees the new can no longer be led in one person's head alone. Several people take on undertakings, each in their own way, and the first frictions arise because nobody proceeds in exactly the same way. Coordination starts to cost noticeable time.

At one hundred to one hundred and eighty employees many people run undertakings in parallel, each following their own logic. Management loses the overall picture – not because nobody reports, but because the reports are not comparable. This is where the wish for a shared order becomes clear for the first time.

At two hundred to five hundred employees the variety of working methods has become a cost factor. Undertakings cannot be compared, onboarding takes a long time, and nobody can say reliably which undertakings really contribute to the strategy.

Larger organisations know all this anyway, only in a more acute form.

It is not only size that counts

The number of employees is only half the truth. What matters is the relationship between the complexity of the undertakings and the organisation's ability to cope with it. Ten similar, independent undertakings are rarely a problem despite their number; they resemble each other and do not interfere. Five complex, interdependent undertakings, by contrast, create a high coordination effort, because every change in one affects the others. And with very experienced people, much of this is put into perspective again, because they absorb complexity through skill.

The critical moment is therefore not a particular headcount. It is reached when so much that is new comes together at the same time that the established teams and familiar routines can no longer carry it. Then the curve jumps, frictions and mutual disruptions arise, and suddenly even simple undertakings become complicated because they get in each other's way.

To put it bluntly: five people in a room for an hour is not a one-hour meeting but a five-hour meeting. The exaggeration is deliberate, but it hits the true core: every additional person costs everyone else time.

The first signs

Before any key figure tips over, you can feel it. The limit does not announce itself with a bang, but in small, everyday observations. It is worth knowing them as a pattern, because they are early warning signs, not catastrophes:

Routine work is delayed. The report that was always ready on Friday now only arrives on Monday.
A quiet unease arises. The well-practised way of working together shows its first cracks.
There are small conflicts where there were none before. People become more sensitive; a once harmless remark is suddenly taken as an attack.
People start to justify themselves and look for someone to blame instead of working on the matter together.

Taken on its own, each of these signs is harmless. Together they form a pattern, and anyone who recognises it early can act while it is still easy. Chapter 6 shows what this pattern feels like when you are right in the middle of it.