3 reasons why Jeff Bezos’s 2-pizza rule can help a company succeed

The billionaire's strategy was tried and tested by Patym CTO for Payments Manmeet Dhody.

By Shannon Tellis, ET Bureau | Updated: Dec 06, 2020, 11.04 AM IST

Smaller teams are often more engaged and feel a greater sense of autonomy.

Last month, Patym CTO for Payments Manmeet Dhody revealed that one of the company’s secrets to success was billionaire Jeff Bezos’ ‘two pizza’ strategy. In the early days of Amazon, Bezos instituted a rule - every internal team should be small enough that it can be fed with two pizzas - to make meetings more effective by limiting the number of people participating.

So how exactly does having a smaller, leaner team help?

Employees are more engaged
Smaller teams are often more engaged and feel a greater sense of autonomy. With fewer levels of management to interact with, they are able to make decisions faster. A recent Gallup report showed that companies in the U.S with fewer than 10 employees scored 42 per cent engagement levels while the average engagement level for bigger companies was below 30 per cent.

More innovative
In a letter to shareholders in 2013, Bezos highlighted how having smaller, decentralised teams helped spur creativity and innovation. “This decentralised distribution of invention throughout the company – not limited to the company’s senior leaders – is the only way to get robust, high-throughput innovation,” he wrote.

Prevents data duplication
Paytm’s Dhody believes a leaner team can also prevent data duplication since each team is in charge of a particular business domain. “They are the single owners of that domain,” he told Business Insider. “Nobody else in the organisation owns that domain, including the data or the services that power it. In my mind, it one of the most efficient organisational designs for structuring teams because it helps agility and prevents data duplication. You don’t have two teams which are gathering the same type of data or servicing the same kind of things.”

But it is important, he cautioned, to have a common data infrastructure and to have data flowing between the various teams. Otherwise, it'll lead to a lot of wasteful expenditure for the company in the long run.

Nadella's 3-Rule Method, Bezos's 2-Pizza Team Norm: How Top Bosses Make Meetings More Productive

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Microsoft CEO Satya Nadella has a three-rule method to make meetings more productive. The rules are: Listen more, talk less and be decisive when the time comes. Here is a look at other business leaders and their rules of engagement.

(In pic: Satya Nadella, Jeff Bezos)