Effective Population Size
Not all stakeholders contribute equally to organizational drift.
Nokia had 60,000 employees, but the 'reproductive' population - those whose strategic preferences shaped the next generation of products - numbered fewer than 20.
The effective population size (Ne) is the size of an ideal Wright-Fisher population that would experience the same amount of drift as the actual population. In most real populations, Ne is substantially smaller than census size (Nc) due to: unequal sex ratios, variance in reproductive success, and fluctuating population size.
For humans, despite 8 billion census population, effective population size is estimated at only 10,000-20,000, reflecting historical bottlenecks. The formula for unequal sex ratios: Ne = 4NfNm/(Nf + Nm). For fluctuating populations, use harmonic mean, which is dominated by smallest values.
Business Application of Effective Population Size
Not all stakeholders contribute equally to organizational drift. Effective size for strategic decisions may be 10-20 executives with veto power, not thousands of employees. Effective customer size depends on revenue concentration. Calculate Ne to understand true vulnerability to randomness.