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The “two pizza rule” can be instructive for start-ups and big corporations alike

Published on Saturday, 16 Sep 2017

In recent weeks I met with business leaders of contrasting backgrounds who are grappling with different challenges, and I came away convinced that large and small firms can and must learn from one another.

First I met an executive who leads a 2,000-person business unit that faces rapid change given digital disruptions, shifting customer expectations, and the emergence of new competitors. To thrive in this world, the business must let go of traditional command-and-control management and empower its people to be more autonomous and entrepreneurial.

I suggested this executive take a leaf out of Amazon’s book and apply the “two pizza rule”. That means structuring the business so that every team is small enough to be fed by two pizzas – thereby retaining the nimbleness, creativity and sense of ownership that are hallmarks of a start-up culture.

A few days later I met an entrepreneur who launched a cutting-edge app developer four years ago, and has since grown it to a team of 50 people. There is no shortage of innovation in his organisation. But this leader is wondering where he goes next. Could he scale up the business to 500 people or more, without losing its entrepreneurial edge? Or should he look to be acquired by an existing tech giant?

This business, too, could replicate its success on a much larger scale by staying true to the two pizza rule. And it needn’t do that on its own: as technology breaks down barriers, there are ever more promising opportunities for big and small firms to work together.

Perhaps the business executive and the entrepreneur should meet each other, share a pizza, and explore a partnership. They might just find that you can have it both ways: entrepreneurship and scale.

This is not easy, of course. Entrepreneurial CEOs understand that they need to develop constantly to build a culture of trust that enables others to take responsibility and lead. They also know that the best answers will come from their teams – not necessarily from themselves.

 


This article appeared in the Classified Post print edition as Just two pizzas.