How small is "small"?

Last week, I wrote about an organization I once knew that accomplished amazing results with almost no formal systems. Among other things, I said, "When the number of people is small, and when the average tenure in jobs is high, you can accomplish a lot of good work following the Everybody-Just-Knows methodology." It sounds promising.

But how small is "small"? At what size do you lose the magic of "smallness" and have to start putting systems into place?

It's sooner than you think.

A friend of mine works for a retail firm with around sixty-five employees—maybe more now and then for short-term or seasonal work. It's a "small company" in anybody's book. But a little while ago they ran into a situation that proved the need for some formal systems.

What happened is this. The company generates product information sheets for their products. These sheets are used by several departments internally, and they are also made available to customers. Some time ago, the Social Media team decided to update these information sheets to make them "easier to read": in practice this meant adding some colorful graphics and rearranging the text so there is more white space on the page. For sheets with too much text to rearrange, they just deleted anything they found boring.*

But the Sales and Support teams, who interact directly with customers to resolve problems, urgently needed all that deleted text. So they in turn just kept copies of the earlier versions, and continued to duplicate those outdated versions when they needed more. At no point did anyone escalate the issue to the responsible manager to get a ruling on how to proceed, because no manager is specifically in charge of the information sheets. They could have gone to the General Manager, but no one wanted to escalate the issue that high.

When my friend told me this story I tried to discuss it pleasantly. But inside I felt like I was looking at one of those pictures you see in magazines with the headline "How Many Mistakes Can You Find?" (1) Nobody was formally responsible for the information sheets. (2) The people updating the sheets didn't know the full list of interested parties who used them, nor (3) what those parties required. (4) The updated sheets were not sent out for review before they were approved. And (5) it was possible for people to keep and use old sheets instead of having to use the current ones. There might be more issues if I think about it for a while, but that list is a good start.

I don't blame the company. No company starts out with all these systems on Day One, and it is usually through episodes like this that they learn they need more than they've got. Also I wanted to tread a little lightly because the company wasn't a client. They'd never asked for my advice—my friend was just telling me about having a bad day at work. So I made a few suggestions for her to take back to the office, to see if she could nudge things in the right direction, and left it at that.

But how is this any different from the team I described last week? If that team could do consistently good work with no formal systems, why shouldn't we expect the same results here?

The easy answer is that there are no tricks in the world that will guarantee you do good work. Even a formal Quality Management System won't guarantee that. At most, the Quality techniques will help you avoid a lot of familiar known mistakes that otherwise recur over and over. So while I say that a small team can do good work without formal systems, that doesn't mean they will.   

Beyond that, there are two or three differences between the Repair Center I described last week and my friend's retail store. That is, there are two differences which definitely bear on this question, and a third which might.

1. The retail store is small for a company, but it's nearly ten times the size of the Repair Center.
2. The Repair Center all did the same kind of work, and they all sat together in one big room. The retail store has multiple departments that are spread out across the facility.
3. Everyone in the Repair Center was an "old-timer." Most of them had worked in the same job for over a decade. The retail store has more of a mix of age and experience levels.

The retail store's problem with information sheets arose largely because some people (the Social Media team) didn't know the needs of others (the sales and support staff). The first two points above mean that could never have happened in the Repair Center. Everyone there knew what everyone else was working on—and what they needed, and almost what they were thinking—because they all did the same task and they had worked together for so long. The last point, about seniority, might have helped too, because one of the benefits of long experience is that you've already had plenty of years in which to make foolish mistakes: after a while you should have already committed most of the relevant mistakes, and learned from them.

So when I say that a small team can do good work without formal systems, there are a lot of other conditions that have to be in place instead. The team needs to be really small, small enough that all-to-all communication is easy and immediate. They have to be knowledgeable and experienced. There are personal characteristics that they have to have, as well: conscientiousness, focus, and a host of others. It's possible, but it's not easy.

If you want to grow larger, consider starting to put formal systems in place.

If someone retires, look closely at what he used to do. Often someone will start doing basic document or system maintenance on his own time, just because he sees that it needs to be done. When he leaves, it may be time to formalize it.

And remember the other extreme, just to keep everything in perspective: that you can have sophisticated formal systems in place and still make alarming mistakes. 

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* That's probably an exaggeration; but in light of what came next it might as well have been true.