The Wisdom of Two Pizza Teams

By Rich Karlgaard

Here’s some advice that’s not as radical as it sounds: Blow up your bureaucracy and replace it with teams of 8 to 12 people. Amazon founder and CEO Jeff Bezos calls this strategy the “Two-Pizza Rule.” It means that a team should be no larger than the number of people who can be fed by two pizzas. In today’s fast-evolving business climate, two-pizza teams can be your organization’s best strategy for success.

As companies strive to stay agile and innovative, they’ve discovered that this is the magic number for leadership teams, product teams, research teams, design teams, and more. In all industries and fields, small teams are beating out their unwieldy counterparts because they work, even at the very highest levels. For example, FedEx—a giant, incredibly complex company—has streamlined its core leadership team to CEO Fred Smith and 10 direct reports. This fosters high performance and helps the company present a single face to customers and shareholders.

How do you go about selecting and nurturing team members for maximum efficiency?

Here are 10 tips:

• Work your way to the smallest number, then subtract one. This advice has been borne out by numerous business leaders. The “minus one” philosophy forces the remaining team members to be creative. That’s where you start. Lean and hungry; fewer than a dozen if you can manage. You can always add later.
• Go with your gut—even when someone isn’t the “obvious” choice. In 1989, FedEx knew that it needed to update its old, slow technology. Its unconventional strategy was to ask Judy Estrin, a young Silicon Valley technologist, to join its board. At 36, with no experience as a CEO or on a large company board, Estrin wasn’t an obvious choice. But she was, as FedEx CEO Fred Smith noted, “blindingly bright.” The point? Don’t be afraid to go out on a limb if you believe an “unconventional” choice would be best for your team. Who is your Judy Estrin?
• Choose passionate people. These are the ones who will spend extra hours on a project, who will think about a problem or product on the weekends, in the shower, wherever they go. Without passion, your team is likely to be a gaggle of clock-punching automatons. You can generally recognize passionate people by what they do, not by what they say. Consider the approach taken by Mike Sinyard, founder of Specialized Bicycles. Sinyard hires only employees who love biking. He watches to see who does lunchtime group rides to separate the “talkers” from the “riders.” Is this fair? Why not? It’s a bike company!
• Look for grit, too. Grit is the ability to overcome adversity. Look for individuals who have proven they can do so—those who don’t shy away from a challenge. Avoid those whose first move is to look around for someone to help them when they’re in a jam. Remember, a big part of what makes two-pizza teams tick is an intrepid, entrepreneurial spirit that isn’t daunted when the going gets rough.
• Aim for cognitive diversity, but don’t emphasize your team’s differences. Cognitive diversity encompasses a broad range of variables—generational differences, educational and skill variation, and social and cultural elements, including, of course, race and gender. These teams will come up with ideas and tackle problems in a variety of ways. Some members will trust their guts; others will crunch numbers. Some are analytical and logical; others are creative and intuitive. They will all think, feel, and see the world in unique ways, leading to the broadest range of ideas and solutions. Focus on finding common ground and providing what the group needs to move forward.
• Encourage tough conversations. Easily won consensus isn’t always the hallmark of effective two-pizza teams. Sometimes, arguments need to happen. Tension needs to be addressed. It may be messy, and there will very likely be misunderstandings. But stay the course and urge people to speak up and have difficult conversations. In the end, their differing opinions and interests will sharpen the company and result in better products and services.
• Give the gift of high expectations. Don’t be afraid to drive people, cajole them, and push them to find that last 1% of team performance. This motivates them far more than vague or easily met goals. When a team leader has high expectations, he or she is paying the team members a compliment. And when those expectations are met, the feeling of success not only becomes normative, it begins to grow and multiply. A virtuous cycle begins, and you institute a natural deterrent against the inertia that dooms so many companies and careers to mediocrity.
• Be very clear about goals and boundaries. Don’t leave room for doubt. When team leaders are as clear as possible in setting boundaries, people actually feel freer to express thoughts or make mistakes than when boundaries are vague.
• Lead with real-world optimism. Great team leaders simultaneously drive and reassure people. Base this reassurance on the genuine belief that good things come from working hard and following a system. This kind of real-world optimism is more than hope—it’s the ability to approach your task as an opportunity. Let your team know that if they stay positive but alert and just a touch paranoid, they’ll have a shot at achieving something bigger and better.
• Keep a loose grip on the reins. Valuable team members will want some control over their own environments. If they have to run every detail by you, they’ll lose initiative. Provide support and mandate accountability, but leave the lion’s share of the decision-making with the people who will be eating those two pizzas. Don’t sacrifice productivity for the sake of bureaucracy.

Remember, lean and hungry is always better than fat and comfortable. It may take a lot of work to switch to two-pizza teams. If your organization is currently clogged by overcrowded conference tables, you may run into a lot of resistance. But like many companies I’ve encountered, you’ll find that the effort is worth it. Small teams are the high-performance strategy of the 21st century.

Get some tips on how to ramp up the effectiveness of your teams with these AMA seminars:
Leadership and Team Development for Managerial Success 

Improving Your Managerial Effectiveness

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