goldfish_pdI’m not at SXSW this year, because, like many people, I feel that it has become too big. But that started me thinking, “When does something become too big?” Not only in the context of SXSW, but it seems as if everything from parties to companies to entire nations eventually reach a point where size becomes a hindrance.

Of course the tipping point is always different, but every kind of group or population invariably ends up less effective after a certain size. In my opinion, SXSW has crossed the line and some would suggest Facebook has crossed the line, which in Facebook’s case, if true, would be our own fault since we control who’s in our circle of friends. I’ve argued for some time that the United States has crossed the line and has become virtually unmanageable, because the interests of people across the nation are simply too disparate.

On the business front, corporations go from exploiting economies of scale to being bogged down by bureaucracy. And creating, or even maintaining, a consistent culture becomes almost impossible as a company or organization grows. The following are some of the problems that typically affect large organizations but exactly when these problems kick in is anybody’s guess.

Factions: I’ve seen factions develop in groups as few as four people, but typically I’d guess factions become a genuine problem somewhere around 30. Think about trying to get a classroom full of people all on the same page. If you’ve been part of the very early days of a growing startup, you’ve probably witnessed the change from being a company where everyone is aligned to being a company conflicted by factions. Once factions develop, you end up with people playing political games trying to align with, and even proactively organizing, different camps in order to achieve goals that may not be in the best interests of the organization as a whole.

Inefficiency: In a company environment, the most obvious form of size-related inefficiency is bureaucracy that bogs down actual productivity. For a business, speed is a huge competitive advantage. Unfortunately, at a certain point scale almost always results in a decrease in organizational nimbleness.

At an event or meeting, the inefficiency of size takes the form of an increasingly skewed noise to signal ratio. Using SXSW as an example, the effort required to stand out above the noise, or even just to find the people you want to see, reveals an environment where the worthwhile has been drowned out by the frivolous.

Unfamiliarity and decreased Interaction: Big organizations result in less face to face time. Less face to face time results in unfamiliarity, less cooperation, and worst of all a decline in mutual respect.

Freeloaders: There seems to be a point where an organization becomes so big that freeloaders and free riders feel they can skate by without being noticed. Anyone who has worked at a large company has seen this phenomenon. The freeloader’s mindset usually reflects something like, “There are so many people here that nobody will notice if I don’t participate/do work. I can just stay under the radar.” Since it’s much more difficult to skate by within the confines of a small group, freeloading tends to exist mostly in large organizations.

Entitled Freeloaders: I thought hard about whether or not to make this its own category and decided it had to be highlighted. Freeloaders have always existed in large organizations but there now seems to be a movement where the freeloaders aren’t just sneaking by under the radar but instead boldly promoting the fact that they are not contributing.

In companies, it takes the form of, “I deserve (insert ludicrous demand).” At events, it takes the form of people crashing with impunity. For example, the past few days I’ve witnessed a slew of SXSW Tweets from people justifying their freeloading because, “the prices are not startup-friendly” and trying to turn freeloading into an acceptable movement. It’s one thing to freeload, it’s something else entirely to act like you’re entitled to it.

As I said at the beginning, different organizations have different tipping points for when they start to be negatively affected by size, and I doubt anyone can give a definitive answer about when that moment happens. But if size is a problem, here’s a question to ponder. Since most organizations are designed to grow, does that also mean, assuming they’re successful, that they’ll eventually be ruined by their success?

[Illustration by Hallie Bateman]