Small is Beautiful — You Really Do Need a Small Decision-Making Team/Group

How big is the team – the group?

How much power do they have to make decisions?

Those are key questions these days. We’re in an era of fast decision-making. Slow decision-making can leave you behind – way behind. Your dominant, successful product or service is threatened – now. It does not matter if you have provided a preferred product/service for decades, or just a handful of years (months?). Today, every successful company is threatened.

Is there anyone left who has not observed the turmoil of the “personal transportation” industry? Taxis are threatened in city after city by Uber. And now, by others.

(That, by the way, is also interesting. When one “disruptive” competitor comes along, and begins to have success, another, and then another, will come along very quickly).

So, traditional taxis are threatened, and they’ve been around much longer than my entire lifetime.

But so are shorter-lived companies and services. Consider social media websites – site after site. About the time I get used to Facebook, or Twitter, I read that more and more people are spending more of their social media time on newer sites. At this moment, Instagram seems to be getting bigger by the week. And, it is possible that I am so not with it that Instragram may already be the wrong illustration to use.

(Please, God, do not let anyone begin to compete too seriously with LinkedIn. I’m just barely learning how to use it effectively. And, yes, I’d be glad to connect with you. Send me an invitation. Here’s my profile.).

So… the temptation, the tendency, the big-time-mistake of spending a huge chunk of time and resources on a product or service that is already in trouble to the new kid on the block has never been quite the problem before as it is today.

Just this week, I’ve read about the threat to print media (read this excellent New York Magazine article about Time’s travails), the hyper-competitiveness of Uber, the trouble of Sears, the prediction that Chipotle and its offspring will ultimately spell the doom of traditional fast food outlets… It is a tough time.

So, back to the opening two sentences.

How big is the team – the group?
How much power do they have to make decisions?

I still remember the time that I heard a venture capitalist state things so very simply. “You’ve go to have a product or service that people will pay for.” My friend, Dan Weston, always reminds me to add the phrase “and one you can make a profit from.”

It all starts at the top left circle
It all starts at the top left circle

Deciding if you are still making the right product, or providing the right service, is critical. Thus, making decisions is critical. And these days, those decisions have to be made faster than ever before. You may have to (likely will have to) shift now. Right now. Really, really, really quickly.

If your decision-making entity is too big – too many people – you will be genuinely handicapped.

In the article The Quirks of Smallness by Joe Pinsker (The Atlantic), the idea is this: smaller is better. Here are two key paragraphs (I’ve bolded a key phrase):

The priority of smallness seems to be key in building a board that can make smart decisions quickly—and this is echoed in research done on the optimal size of teams, too.
A writer for Fortune magazine was bold enough to suggest in 2006 that there is an “optimal” number for a group: 4.6. Aside from the obvious logistical problem of determining whether to include the arms or the legs of that marginal six-tenths of a person, sticking to a cut-and-dried number of people for all groups would be absurd, given the variety of projects out there. That said, smallness generally appears to be a trusty organizing principle.

No matter what your business, you are in the decision-making business. Too big a decision-making group, and you are going to be seriously handicapped. Build a good, sharp, reliable, small group. It looks like it should be 5, or fewer. Make sure they have the information they need. Empower them to actually make decisions. Then, they have to make those decisions. Quickly. And, then, the larger team has to execute, implementing those decisions.

So how big is your decision-making group?


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