So let's start with the first element of team composition, and that is size. How big is your team gonna be or how small is your team gonna be? Let's start by reflecting on your current team or the team that you worked in most recently. Could be in school, could be at work, could be a sports team that you're a part of, but how big is that team? And I want you to think about from your perspective, in your experience, what were the advantages of that team size? Whether it be small or large, and what were the disadvantages of that team size? Again, whether it's small or large. Go to the discussion forum and share with your classmates your own experience with team size. And what you see is those advantages and those disadvantages, and see if your experiences line up with, or maybe even are different from those of your classmates. And then we will go into what we know from our research, on team size and its impact on team functioning and performance. So start with the discussion forum, see what your classmates have to say, and then come back and we will proceed with trying to understand, really what the impact of team size is on team functioning and performance when we look across teams around the world. All right, welcome back. Hopefully, you had an opportunity to really engage with your classmates on this notion of team size and what those advantages and disadvantages are. So, we did a survey a couple of years ago asking managers and executives are from around the world really, on what their intuitions were regarding the benefits and the cost, the disadvantages of team size. And here's what we found, some people really prefered larger teams and the explanations that were given were more capabilities. The more people I have, the more capabilities I have in the team to perform the task or the more resources that we have. Whether those resources be information or relationships, but having those more resources, the greater access to resources, the more information, thus the more diverse inputs, thus the more ideas and possible solutions that we might have. So, this is the logic or the explanation that was given for people who really preferred to have larger teams in place. But there was an equal set of people that really preferred smaller teams and their explanation equally valid, more cohesive. The smaller the team, the more cohesive or bonded, better trust within the team, a higher satisfaction in the team because we can really get to know each other, really rely on one another. A lot of people will articulate that a key benefit of smaller teams is that we can make decisions faster. And if consensus is required, where everybody has to agree, it's a lot easier to reach that consensus, when we have a smaller team as opposed to a much larger team. And then the last argument that's often given for preferring smaller teams, is that we get more effective individual contribution in those larger teams, it's easier for people to hide. You recall a concept that Maxim talked to you, about in the first course that we offered around inspiring and motivating individuals and the impact of social loafing. Well, the impact or the possibility of social loafing is much greater when you have a larger team, but when you have a smaller team, you can really isolate those effective individual contributions. So there are trade offs, there are pros and cons, larger teams, smaller teams. And the question I would ask you, is can both of these be true? Are there certain cases were larger teams are preferred? Are there certain situations where smaller teams are preferred? And that's a question I want you to keep in mind, as we go forward and revisit in the discussion forum as I expose you to some of the latest research that we've been doing on team size. So a good example of that is this study. This is a study that was published back in 2009, and it really, I think, helps build the business case for why we care about team size. It focuses on innovation and creativity in teams and it looked at a number of different predictors of innovation and teams across a number of different studies. Specifically, looking at 24 unique studies over 13 hundred teams from around the world and what I'm showing you here is the impact that each of these variables had on team innovation, so positive or negative. And then the larger the positive effect, the more beneficial that variable was for predicting team innovation. And the larger negative impact, the worse it was for team innovation. So, interestingly, team size, of the variables that were examined as part of this meta analysis, this study. Team size was the number one positive predictor of team innovation, meaning, on average, the larger the team, the more innovative the team was. And the impact of team size, that positive impact of team size on innovation, was stronger than job relevant diversity, goal interdependence, so are goals being interdependent. Task interdependence or team longevity, how long we've been together as a team or even how diverse we are in terms of our backgrounds as individual team members. So again, there is some evidence out there across a number of studies, across many different teams from around the world. That team size has a positive impact on innovation, now an important question you have to answer is, is there a limit? Is there an extreme? Is there a limit to how many people are favorable for innovation? After some point does the innovation get reduced in the team because there's so many people in the team? And that's a question we'll revisit. Another study, that I think is particularly interesting in this regard related to team size and why we should care and really building the business case for team size. It doesn't focus on team performance, it focuses actually on firm performance and it looks at top management teams, so the c suite of your organization. For example, in tech startups, in high technology, early stage startup organizations, there's evidence to suggest that the size of the founding team, positively predicts meaning the larger the team the better, positively predicts how fast these startups grow, and ultimately, the positive cashflow that these startups experience. That's interesting. A lot of times we think about keeping that founding team small. What we actually find is that team size, positively predicts growth and cashflow in these startups. Again, there might be a certain limit to that but positive relationship between size and, in this case, firm performance. And then one of the most fascinating studies, for me at least, is this one, where it looks at not the top management team in this case, but the size of the board of directors, both for large firms and small firms, and there is a difference. Firm performance here is measured both by market based measures of performance, so stock returns, as well as accounting based measures of performance, net income for example. But for both of those measures of firm performance. We find that board of director sides, the more members on the board of director, on average better the firm performs, both for large and small firms. But the impact of board size on firm performance is greater for small firms, than it is for large firms. Again, there may be a certain limit, but on average what we find is the bigger the board of director, the better that firm performs. Very interesting and I think counter intuitive for a lot of us. Including my friends at Amazon, Jeff Bezos is famous for his commentary at an Amazon offsite retreat. This is an internal retreat, where a manager stood up during the retreat and said that, what amazon really needed was for employees to start communicating more with each other. More team communication, more open communication. And Jeff Bezos, the current CEO of Amazon, stood up, at least according to reports from this external off site retreat, and the quote went something like, no, communication is terrible. We don't need more communication, we don't need more team members communicating with each other and since I really started to think about what Jeff Bezos is trying to communicate. And I think what he's trying to communicate is there's a limit to the number of people, that can really contribute and work together and Jeff went on to clarify his point of view on team size with what he calls the two pizza rule. If a team cannot be fed with two pizzas, then it's too large. So, in his mind, there's a too small, and there's a too big and somewhere in the middle is just right. And just right in his world is can I feed it with two pizzas? And so that's an interesting way of thinking about it. It certainly, depends on your appetite and the appetite of your team members, but it at least gives us a ballpark for how to think about what is the optimal team size. And there's actually research on trying to figure out what is that optimal team size. And so let me share with you some of the, I think, most fascinating studies really trying to discern or identify what is that optimal size. In 2006 in a Fortune Magazine article Jerry Useem quoted the original study that was done by Richard Hackman and Vidmar all the way back to 1970 on this. And it said that large team size is bad, and too small is also bad, and there's an optimal number in there and the optimal number is 4.6 team members. So I encourage you to figure out how you can get the .6 in your team, but it at least gives you the ballpark of between four and five. Jerry in this case in this Fortune article was quoting research by Hackman and Vidmar in the early 70s, but that research is often misquoted. This is a report that Richard Hackman wrote for a government agency in 1971 summarizing, those findings they had back in 1970. And the quote reads, among other findings the study suggests that the group size which leads to optimal satisfaction of team members is between four and five. So that 4.6 number is really about optimal satisfaction of group members but continue reading this quote. It is not the size, 4.6 is not the size which necessarily leads to maximal effectiveness of the team. In their original research, they actually found that teams that were smaller than four, in some cases three as well as larger, but to seven or eight team members, actually performed more effectively than did four or five person groups. So again, you really have to ask yourself, am I after satisfaction? Or am I after effectiveness of the team? And since we've been doing a lot of research on size and effectiveness, and here's essentially what we've found. That if you think about team effectiveness on the y axis, low to high and you think of team size from one to five, ten, 15 and so on. What we find is a skewed bell curve, that looks like what I am showing you here, where there is an optimal amount, and it is somewhere between five and ten. And this ranges across different situations, different environments. When we average it out, what we find is the optimal team size is really between five and ten. Anything larger than ten, what we find on average is that teams begin to suffer from an increased relationship conflict, process and coordination costs and social loafing. All things that Maxim will talk more about, when we really dive deeper into team processes and dynamics later in the course. But again between five and ten on average produces that optimal effectiveness. Whether it's five, whether it's ten, whether it's four, whether it's eleven, seven or eight. Ultimately it's gonna depend on the task structure, the environment really what is needed from your team. But for you, when you think about who's on my team and how big should my team be, you wanna start by thinking in that five to ten range for your optimal effectiveness. If you're after satisfaction somewhere smaller, four to five ultimately delivers the highest level of satisfaction, five to ten on average the optimal level or the highest level of team effectiveness.
