The Rule of 162 (In support of agility)
April 25, 2007
A company that grows haphazardly creates a debilitating management structure. I say that no amount of good managing can create efficiency in a group that has grown beyond 162 because the amount of associations people would need to have a sense of belonging and group responsibility are well out of the human channel capacity.
To remedy this, when a company reaches 162 employees, a few members of the group will split off and form another group. These people will have their own central management and be physically distanced from the first group. When this new group reaches 162, it does the same, and so on.
Note for those who read “The Tipping Point”
I pick 162 over Gladwell’s 150 because I believe channel capacity to be related to a geometric structure based on the closest packing of spheres. If you think I might be totally insane (and I might be), you’ll find it interesting to note that Gore Associates (one of Gladwell’s examples) doesn’t have an average of 150 fifty employees per facility, but 7500 employees per 45 facilities, an average of approximately 167 employees per group.