The Ringelmann Effect: What Happens When Startups Grow Up

Imagine you’re the founder of a startup or leading a fast-growing business unit. You have four or five teams, each with three people. In the early days, roles are fluid. Skills overlap generously. An R&D team member jumps into client conversations. Someone from operations helps close a deal. Work gets done because people see a gap and step in to fill it up. Ownership is instinctive, and handholding is minimal. Then the business starts to grow. Revenue picks up. Teams expand. New people join. Naturally, roles become more defined, processes become formal, and targets grow sharper. On the surface, this shift feels like progress—and in many ways, it is. But alongside this growth, a quieter change often sets in. As the workforce expands beyond a certain size, productivity and returns can start to plateau or even decline, relative to rising costs and expectations. Initiative dips, ownership becomes diluted and accountability spreads thin. While overall output at a group level may hold steady or increase marginally, the effort exerted at an individual level often decreases. This isn’t a fatigue issue, leadership failure, or motivation problem. It’s a well-documented psychological phenomenon known as the Ringelmann Effect. What Is the Ringelmann Effect? In organisational psychology, the Ringelmann Effect explains a simple but counterintuitive pattern: as group size increases, individual effort tends to decrease. A known and probably lived example helps make this more understandable. Think of the game of tug-of-war. As more people are added to each side of the rope, each individual typically pulls with less intensity. Doubling the number of people doesn’t double the total effort. Even when the overall force increases, it does so marginally—not in proportion to group size. The same dynamic plays out inside growing teams, too. Why Does Individual Effort Decline? At first glance, it’s tempting and normal to label this as laziness. But decades of research suggest something far more nuanced. One key factor is diffusion of responsibility, often referred to as social loafing. When people struggle to see how their individual effort contributes to the final outcome, or when their role feels interchangeable, personal responsibility weakens. The assumption—often unconscious—is that someone else will compensate.

Visibility plays a big role here. When individual contributions are harder to trace, accountability softens. Low visibility often leads to low ownership. There’s also a coordination cost to scale. As teams grow, so do dependencies. Communication becomes layered. Approvals multiply. Decision-making slows. Planning gets complex. With more stakeholders involved, execution becomes harder and errors more frequent.

None of this happens because people care less. It happens because systems make their effort feel distant from impact. Does This Mean Bigger Teams Are a Bad Idea? Not at all!

When executed thoughtfully, expanding teams brings real advantages. Larger teams allow greater skillsets diversity, better collaboration, improved output capacity, and cost efficiencies—especially when internal expertise replaces outsourced work. But research suggests there is a sweet spot. Beyond it, performance gains flatten, and in some cases, reverse.

On the flip side, working independently has its own strengths—clear accountability, faster decisions, sharper focus. But it also has limitations. Solo work can reduce diversity of thought, slow down learning, increase blind spots, and limit scalability. The challenge isn’t choosing between small and large teams. It’s knowing how to grow without losing individual momentum. When Structure Becomes the Wrong Fix When leaders notice slipping ownership or slowed performance, the instinctive response is often to add more structure—more processes, more reviews, more hierarchy. But using structure as a blanket solution to disengagement can backfire. As organisations grow, the emotional distance between leaders and employees widens. When people feel less seen and less heard, their motivation to go above and beyond the ask declines further. What begins as a productivity issue quietly becomes a culture issue. How to Scale Team Size Without Losing Ownership The goal of scaling isn’t to endlessly add people or stretch a few individuals thin. It’s to grow where capacity and ownership overlap. In practice, this means resisting false trade-offs. Don’t Choose Between Role Clarity and Autonomy Clear role boundaries help prevent ownership from slipping through the cracks. When people know exactly what they’re accountable for, they’re less likely to assume someone else will take care of it. At the same time, clarity shouldn’t eliminate lateral autonomy. The most effective teams balance defined responsibility with freedom to act. Don’t Choose Between Visibility and Letting Go People stay motivated when they see the impact of their work. Regular check-ins, peer feedback, and meaningful performance conversations help keep individual effort visible—especially in growing teams. Without this, contributions risk getting lost in the noise. Don’t Choose Between Team Targets and Individual Goals Individual and team performance shouldn’t exist in silos. When people understand how their personal efforts drive collective outcomes, work feels purposeful instead of transactional. Don’t Choose Between Delegation and Expanding Scope Adding people before responsibilities truly expand can dilute output and complicate coordination. Encouraging cross-functional collaboration and gradual scope expansion often strengthens ownership more than rapid headcount growth. Don’t Choose Between Speed and Sustainability Scaling works best when it’s phased. Hiring in measured increments allows organisations to observe how growth impacts efficiency, morale, and quality—before problems compound. Growing Up Without Losing the Spark The Ringelmann Effect offers a simple but powerful reminder: bigger isn’t always better, and leaner isn’t always risky. Scaling decisions that ignore human behaviour often backfire. That’s why the most resilient organisations grow in ways that make sense at individual, team, as well as organisational levels—benefiting people in ways that benefit teams, which ultimately benefit the business. The real art of scaling lies in building organisations that are lean enough to preserve visibility and ownership, yet large enough to pursue a long-term vision. When that balance is struck, growth doesn’t dilute effort—it amplifies it.

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Psst! This blog was created after a lot of thought by a real person. #NoGenerativeAI