Size does matter
Apr 2024

 I've always been intrigued by the influence and appeal that the scale of organizations holds over individuals. Whether it's associated with power, wealth, prestige, or other factors, the intrinsic values can be diverse and plentiful. Naturally, companies that have achieved such dimensions have likely done so through effective strategies. The point is, large companies hold allure. Many people aspire to work for them, and it all makes perfect sense. However, with substantial volumes of data now available, we begin to discern a noteworthy pattern—one that could be encapsulated in the following headline: The larger the size of companies, the greater the challenge in managing employee engagement.

This discrepancy between size and commitment brings to mind Dunbar's number, which posits a cognitive limit on the number of stable social relationships an individual can maintain. This number, approximately 150, is linked to the size of the human neocortex. According to this theory, this limit impacts a person's ability to maintain meaningful social connections, as beyond this number, it becomes challenging to remember and maintain close relationships. Our research reveals a series of patterns that help better understand the causes of this inverse relationship:

  1. Dehumanization of work: We come from a world of artisans, individuals who worked in activities where they controlled every aspect of their craft from start to finish. In this type of work, the connection with the task imbued it with purpose and meaning. In contrast, Taylorism discovered that breaking tasks into simpler and repetitive components would significantly increase efficiency and reduce production times. This approach facilitated the creation of much larger and profitable companies. However, this methodology has led us to a point where the division of labor benefits the company but diminishes the significance for the employee. In large companies, the loss of meaning in work is directly proportional to their size. It may be suitable for more industrialized environments, but it is more challenging to manage in companies focused on services.
  2. Management misalignment: The larger an organization, the larger the size of the teams within it. Consequently, a manager's span of control increases, and it's merely a matter of probability that mismatches between management style and team members' characteristics begin to emerge in daily operations. Designing a more humane management approach in environments of certain proportions is highly complex. Let's remember the limits proposed by Robin Dunbar: beyond 150 people, there are only unidirectional management styles since anything else is unfeasible and unsustainable for the capacity of a human brain.
  3. It becomes more challenging to create psychologically safe environments: Point 2 inevitably leads to point 3: When my manager is not the right fit, it typically leads to workplaces with little psychological safety. What does this mean? Essentially, psychological safety enables us to measure an individual's capacity to be themselves in their work environment. When a person lacks these spaces, the organization's ability to innovate and transform is drastically reduced. Basically, if I don't trust, I don't share. And if I don't share, it's practically impossible for a company to progress. It's akin to driving a car with the handbrake on. Ultimately, as size increases, the ability to innovate decreases, and the engine for undertaking profound change processes loses power.
  4. Business impact: We've always heard that a motivated person is more profitable than someone who isn't. It's evident, but it's remarkable to see it quantified. With the data available today, we can analyze human behavior through various indicators. However, the intriguing aspect arises when we correlate this data with business metrics: productivity, production line losses, customer satisfaction, sales, revenue, etc. It's when we integrate behavioral data with business metrics that we clearly observe how many of the issues plaguing companies stem from issues related to individuals' behavior within the organizations. It can be argued that commitment acts as a lever for business, both positively and negatively.

Size matters, of course, it matters. These types of companies face a new scenario that challenges their traditional models in everything related to people management. There are numerous avenues to address these issues, but what we cannot deny is that humanizing environments of certain dimensions is intricate. While humanization was once an option in the past, today, it's a necessity.