Imagine you are leading a startup or running a business unit. Your instinct might be: let us bring in more people, scale fast, throw more hands on deck so projects finish quicker.
It sounds sensible. But decades of psychology and organisational research warn us that after a certain size, adding more people often brings diminishing returns. That warning is called the Ringelmann Effect.
What is the Ringelmann Effect?
The term comes from experiments by Maximilien Ringelmann (early 1900s), who observed that as more people pull on a rope together, the average effort exerted per person falls. In other words, the group’s total output increases, but not in proportion to the number of people. When you double the size of the team, you get less than double the effort.
This drop in per-person effort is often driven by social loafing: people assuming less personal responsibility, feeling their contribution is less visible, or believing others will pick up the slack.
Why larger teams risk draining discretionary effort
Discretionary effort is the extra effort people take beyond the bare minimum. It is often what differentiates good from great performance. But larger teams can sap that effort, in part because of:
Diffusion of responsibility
The more people in a group, the less each feels their individual role matters. It becomes easier to assume someone else will take care of“that bit”.This undermines motivation.
Visibility and accountability decline
When individual contributions are hard to observe, people may slack, consciously or unconsciously. If nobody knows exactly who did what, people may reduce effort.
Coordination costs
More people means more communication, more dependencies, more risk of misalignment, inefficiency in organising tasks, meetings, feedback. These overheads grow non-linearly. Sometimes the bottleneck is not capacity but the friction of coordination.
Thresholds of optimal size
Many studies suggest there is a “sweet spot” for team size. If you go much beyond that, performance can plateau or even drop. For example, some literature sets optimal team sizes between 4-8 members for many tasks.Also, entrepreneurial team research finds an “inverted U” relationship: beyond a certain team size, firm performance starts to decline
But, we are.
Not saying work alone.
Working alone has its advantages for focus, accountability, clarity of task, speed of decision-making. But it lacks diversity of thought, resilience, capacity, ability to scale, and often slows learning. Teams are essential for handling complexity, innovation, scale.
The question is not “team or solo” but,
“How do we design teams so that the benefits of collaboration outweigh the costs of added size?”
Designing team size carefully: principles for leaders
If as a leader or founder you accept that team size matters, here are some principles and practices to design team size to preserve high performance and discretionary effort:
Clarify roles and responsibilities so everyone understands what they own.When roles are unambiguous, individuals know what is expected, see how their contribution matters, and are less likely to loaf.
Make contributions visible. Use metrics, frequent check-ins, peer review, dashboards. Transparency about who is delivering what helps maintain motivation and accountability.
Set clear goals and targets that are individual, team, and interdependent. When people see how their own work feeds into the group objective, and when individual effort is tied explicitly to outcomes, social loafing declines.
Keep teams as small as possible for the task. If a task can be handled by five people, don’t automatically make it ten. The extra people might add redundant capacity, increasing cost of coordination and reducing urgency or ownership.Use modular or cross-functional small teams rather than one huge unit.
Ensure psychological engagement and cohesion. Teams where people feel connected, share norms about effort, respect reliability, where there is trust in leadership, tend to resist social loafing. When people care about each other and the purpose, they are more likely to go above minimum.
Scaling up carefully. When a team must grow, do so in phases. Test increases in size; see if performance, error rates, delays, morale degrade. Be ready to split teams or create sub teams.
Use task type and complexity as a guide for size. Complex, creative, interdependent tasks may tolerate slightly larger teams if coordination is tightly managed. For routine, execution tasks, smaller teams tend to outperform.Research suggests that for innovation, larger variety of inputs helps, but only up to a point—beyond that point, the costs dominate
Quotes & Thought Leader Insights
Jeff Bezos famously uses the “two-pizza rule”:
if a team can’t be fed with two pizzas, it’s too large. This simple heuristic forces leaders to think about keeping teams lean enough to be nimble.
Shrivastava and Rao’s empirical study of entrepreneurial teams shows that performance follows an inverted U-shape in relation to team size.
Too small and you lack capacity or diversity, too large and you begin losing alignment, increasing coordination loss, reducing retention
What this means in practice for CEOs and Founder
Before you hire to expand a team, ask: what problem will this solve? Will it add capability, diversity, speed, resilience, or will it mostly add management overhead?
Design the structure: smaller sub teams, pods, or squads that can own portions of the work, communicate tightly, and deliver independently.
Be deliberate about when to scale the team: some phases of growth need leaner teams (early product development, strategy definition), others can afford larger ones (marketing reach, operations). But always monitor whether growth of size is matched by growth of coordination tools, clarity of roles, leadership capacity.
Build feedback loops: measure not just output but engagement, delays, coordination inefficiencies, missed responsibilities. Use that evidence to decide whether a team is too large
Conclusion
The Ringelmann Effect reminds us that more people is not always more performance. Social loafing, coordination losses, dilution of accountability all mean that team size matters a lot. For leaders, founders and CEOs, the goal is not to avoid teams but to build them intentionally: small enough to maintain visibility and ownership, large enough to harness diversity and scale. When done right, you preserve discretionary effort; you avoid over-supplying capacity that sits idle or never produces its full potential. That is where high-performance teams truly live.