Is it time for formalities yet?

Dunbar is an anthropologist at the University College of London, who wrote Co-Evolution Of Neocortex Size, Group Size And Language In Humans. In that paper he states:

… there is a cognitive limit to the number of individuals with whom any one person can maintain stable relationships, that this limit is a direct function of relative neocortex size, and that this in turn limits group size … the limit imposed by neocortical processing capacity is simply on the number of individuals with whom a stable inter-personal relationship can be maintained.

According to Dunbar’s hypothesis, that limit is roughly 150. This became known as “Dunbar’s number”; this theory is wildly used in various Social Networks and even online gaming (MMOs).

I think this theory could also be effectively used when determining whether it’s time for a formal process or policy inside a growing video game company. In a company small enough, there is no need for formalities – goals can be achieved much faster in the absence of the red tape because everyone knows everybody else, what they are working on and what their expertise is in. But once the company grows past a certain number (say, 150 :)) – and people lose that information. At that point inefficiencies are introduced and formal process will help eliminate those inefficiencies.

Beware: once you start introducing formal processes, the key is to prevent the formal process from turning into bureaucracy and killing the company’s culture.