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5. October 2022

9 Reasons Your Organisation Should Build Self-Managed Teams

Personio Office Employees

In Frederic Laloux’s book, Reinventing Organisations, he says that organisations of the future will share three key attributes: Their employees bring their whole selves to work, they’re purpose-driven and their teams are self-managed.

That third attribute, self-management, can be the most complex to implement but can also yield the most impactful results. Here’s what you need to know.

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What Is A Self-Managed Team?

When a person is self-managed, they aren’t under the direction of an authority figure; they have full autonomy and control over their actions, processes, and outcomes.

In the workplace, a self-managed team is a group of employees who work collaboratively to complete a project or reach a defined outcome with little to no direct supervision from a boss.

Many employees within your organisation likely practice a degree of self-management. For example, seasoned employees trusted to do their work well and on time without being micromanaged. But still, even they consistently report back to a team lead or supervisor for guidance.

How Does A Self-Managed Team Operate?

Self-managed teams have increased in popularity over the years, as they perform well in today’s collaborative, creative and hybrid work environments. Some organisations may adopt self-managed teams by necessity as they downsize and eliminate the need for managers or supervisors.

Since these teams don’t have the guidance of a manager, the employees within them take full ownership of their work and processes. The team is responsible for tasks typically assigned to managers, such as performance evaluations, operating procedures and big-picture contributions to the company.

Self-managed teams are typically smaller in size, with each role clearly defined. They collaborate to complete their shared tasks and overcome obstacles to reach their ideal output or outcome.

These teams take a more ad hoc approach to meetings rather than holding daily stand-up calls or scheduling weekly project discussions. Since some leadership is required in these meetings, teams will assign a facilitator to lead the discussion. However, the facilitator can change for every meeting.

Self-managed teams also typically have unlimited paid time off policies. This fits under their self-governing approach, as the employees are trusted to only take leave when their workload and team can handle it and to not abuse the policy.

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9 Reasons Your Organisation Should Build Self-Managed Teams

Shifting from the traditional managerial hierarchy to self-managed teams isn’t a simple task. It requires employee and leadership buy-in, resources and time. But when developed correctly, these teams can inspire innovation, enrich company-wide relationships and put your organisation on a fast track to reaching your goals.

If you’re looking to achieve any of the following, then self-managed teams can help get you there:

1. Employees Will Develop New Skills

Working in a self-managed team allows employees to explore underdeveloped skills. For example, since they’re working in collaboration to plan and execute a variety of tasks, they have the opportunity to increase their problem-solving skills, communication skills and organisational skills.

2. Employees Can Try Out New Roles

In some self-managed teams, employees have the opportunity to rotate through the different roles to learn from their colleagues and develop entirely new sets of skills.

Employees want to continually learn and grow; when their position or development becomes stagnant, they may start looking for job opportunities elsewhere. Instead, joining a self-managed team provides an experiential learning and skill-sharing environment where they can safely explore a new role within the company and gain insights from their peers.

3. Employees Will Gain Leadership Skills

Employees in self-managed teams have the unique opportunity to flex and develop their leadership skills. While many employees may not have this opportunity in their usual role, working in these smaller self-managed teams puts everyone on an even playing field and provides them with the opportunity to lead, advise or contribute in new ways.

4. Employees Become Experts

Not every employee wants to move up in the ranks and become a manager or leader. Many want to become experts in their role or master a specific skill, and self-managed teams are the perfect environment to help them achieve that.

Since the teams are more intimate, each employee is more hands-on than in a typical team structure. They have complete ownership of their own role and gain a deeper understanding of their peers’ work, the process and the end product.

5. Decision-Making Is Improved

Self-managed teams benefit from having various viewpoints and experiences to draw from, increasing creativity and leading to a more rounded decision-making process. Team members are also encouraged to make decisions without the consensus of the group, as long as they’ve received the advice of an expert and have consulted with those who would be directly impacted.

6. Employees Become More Motivated

Simply feeling like you’re part of a team can make you feel more motivated, and that motivation grows when you’re working toward a shared goal.

In self-managed teams, each team member is assigned to specific tasks. Since the individual responsibility is on them, they feel more motivated to do their best work and ensure their team as a whole succeeds.

In contrast, an individual employee on a traditional team may not feel that motivation or responsibility because they aren’t collaborating as intimately or as connected to their team members.

7. Employees Become More Engaged

Typically, employees are selected to be a part of a self-managed team because they hold self-management qualities, have the right skills, and the project or outcome aligns with their interests or expertise.

Being chosen to join a team based on those qualities would make any employee feel more confident in their work and empowered to do their best. Plus, matching an employee to a project that aligns with their interests or expertise will automatically increase their engagement, since it’s already within their wheelhouse.

8. It’s More Efficient

In a typical team environment, the organisation’s goal is relayed to a manager, who relays it to their team and dictates how the team should operate to achieve the goal.

In these scenarios, the team’s success can be hindered by the manager if they don’t give their workers enough information or autonomy. The "why” behind the work can become less important if it’s not communicated properly, which dampens the team’s motivation.

But in a self-managed team, the workers know how to best use their time, skills and resources to work together and reach the goal without the middleman. The goal—and “why” behind their work—is also much clearer since they receive the information directly from leadership.

These teams also require less oversight, so the would-be manager or supervisor can direct their attention and time to a different project or department.

9. It’s More Cost-Effective

Since self-managed teams are more efficient and productive, they save their organisation time and money. For example, RCAR Electronics in the US reported an annual savings of $10 million after implementing self-managed teams.

Organisations also save money on the hiring, training and retention costs of a supervisor or manager and can instead reallocate those funds to other areas of the business.

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How To Prepare Leaders For Self-Managed Teams

While self-managed teams don’t have a leader heading it from the inside, leadership still plays a crucial role in their success:

  • The organisation must have clearly defined goals and values that can be used to inspire and guide a self-managed team.

  • Leaders need to display trust in their team members. Letting go of the typical top-down management style requires relinquishing control and having complete confidence in your employees.

  • Leaders must be transparent with their teams, sharing vital information to deepen their trust and align them with the organisation’s goals.

The Role Of The External Leader

In some organisations, self-managed teams have an external leader who acts as a liaison between them and the leadership team, helps the team acquire resources and presents their findings to executives.

External leaders are responsible for the success and performance of one or several self-managed teams. It’s a complicated role; they must guide their team towards their goal without overstepping their boundaries or micromanaging them.

One of the primary goals of an external leader is to build strong relationships with the executive team and the self-managed team. Once they establish trusted relationships with both parties, they help the self-managed team develop a direct relationship with leadership. This allows the external leader to step back and reduce their involvement.

How To Develop A Self-Managed Team

Moving from the traditional managerial hierarchy to self-managed teams can be a challenge for some organisations. Though there are fewer leaders on these teams, there is still a structure that should be followed when developing them:

1. Identify Employees With Self-Management Characteristics

Successful self-managed teams require an earnest commitment and interest from those that join. Employees who thrive under self-management typically have these characteristics:

  • Drive – They take initiative and move ahead with confidence without the direction of a superior. As a member of a self-managed team, they must be able to own their progress and push themselves (and their team) forward with self-motivation.

  • Trust – They must display trust in their skills, the organisation and their team members. In a self-managed team, trust leads to free-flowing ideas, as team members feel more comfortable sharing their thoughts and concerns without judgement.

  • Effective DecisionMaking – They make thoughtful, well-rounded choices and have demonstrated strong decision-making skills. They take into consideration alternative points of view to make an informed decision.

  • SelfAwareness – They know their capabilities and limits and defer to their teammates when needed. They are constantly seeking opportunities to learn new things and develop their skills.

  • Strong Communication – They help cultivate an environment that promotes open communication. They voice their opinions, even in opposition, as long as it serves the team’s greater good. They listen to the concerns and respect the experiences of their team members.

2. Clarify And Share The Organisation’s Goal

Before creating a self-managed team, confirm the ideal output or outcome with leadership. Communicate your organisation’s business goals with your team and establish ways to measure and track their performance.

3. Provide Training And Team-Building

Some employees may need technical training related to the project, or training on how to work in a self-managed team (for example, a course on conflict resolution). If the team members aren’t familiar with each other, coordinate team-building practises and events to help them build trust and improve their communication.

4. Hand It Over To The Team

The team will then work together to establish their specific objectives, define their roles and responsibilities and outline their process. An external leader will advise during this time, as needed.

5. Maintain Balance

Each team member should be treated equally and compensated fairly; in self-managed teams, female employees are more likely to experience pay inequality. Ensure each team member is contributing as designed, feels empowered and is given the same opportunities.

6. Review Their Performance

Self-managed teams don’t require constant feedback from a supervisor or manager, but you still have to schedule check-ins and performance development reviews to measure their progress. Use these check-ins to discuss methods of improving their process or functionality; ensure they’re within scope, timeline and budget; and celebrate their successes.

Over To You: Get Started Developing Self-Managed Teams Today

Can every team within your organisation succeed as a self-managed team? Maybe not, depending on your goals, industry and employees. But with the right structure and support, self-management can bring forth innovative processes, enriching workplace experiences, and a deeper connection to work.

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