Self-managed teams: what they are and how to implement them

Last updated:
September 20, 2021
March 23, 2022
min read
Brendan McConnell
Self-managed teams
Table of contents

Getting maximum productivity and engagement from teams is at the top of the priority list for most companies. One management technique that has long been a staple in the manufacturing industry - and which has gained popularity elsewhere in recent years - is the concept of self-managed teams.

This article will act as a primer on the idea of self-managed teams, and offer you insights into what actions you should take to maximize employee output using this management style.

What does it mean to have a self-managed team?

Self-managed teams have been around since the 1960s, but have seen a significant increase in popularity over the past decade or so. They are now present in a sizable portion of the Fortune 1000, and are used to drive stronger innovation, productivity, and overall employee satisfaction.

It’s a management technique where a group of employees is brought together and given responsibility and accountability over all or most aspects of producing a product or delivering a service.

The key difference between a typical project team and self-managed teams is that they are self-organized and semi-autonomous. That means that there is no defined hierarchy on the team. Instead, management and technical responsibility are rotated amongst the team members under pre-defined guidelines for collaboration.

In a traditional org structure, a team leader or department manager would assign tasks and deadlines to employees depending on their skills, function and role. This is a top-down management approach.

In self-managed teams, a group of people work together toward a common goal, which is defined by stakeholders outside of the team. A manager or department head will define the overall direction and desired outcome, and will provide the required tools, resources, and training if required.

Once  the project or program has been kicked off, group members are collectively responsible for self-organizing, assigning tasks, and solving problems. The team, as a whole, decides on the project plan, manages daily activities, and shares management responsibilities.

Self-managed teams are given full ownership and responsibility to drive business results for their specific project. The focus is solely on responsibility and outcome, rather than who is in charge and who gets credit.

Instead of being top-down, self-managed teams operate on a flat or lateral playing field where everyone is given an opportunity to take on leadership over tasks that are relevant to their expertise.

Benefits of self-managed teams

Self-managed teams offer a variety of benefits, depending on your industry, project, and team make up.

Some of these benefits include:

  • Increased productivity. Employees are given full ownership over their respective areas of expertise and project outcomes. This helps to boost overall commitment and staff engagement, in turn ramping up productivity for both individual employees and the team as a whole.
  • Enhanced innovation. When employees are given complete leeway to solve their own problems and manage their own tasks, innovation and creativity quickly follow. That’s because employees are given direction, and then empowered to find their own way to the desired outcome.
  • Reduced pressure on managers. Middle and senior level managers handle most of the burden when it comes to organizing teams, managing projects, and completing administrative and organization tasks. This takes away from their ability to think strategically and make “big picture” decisions. By removing these burdens, and empowering their teams, managers are freed to do more impactful work.
  • Creating highly motivated teams. By definition, self-directed teams are highly motivated, engaged, and committed to achieving their target outcome. If they weren’t, then it’s unlikely that team would last very long, or be created in the first place. Highly motivated teams fire on all cylinders, offering maximum impact for key projects.
  • Greater ability to respond to complexity. Because self-managed teams engage in collective decision-making, and are laser focussed on a specific project or desired outcome, they have a much stronger ability to process and respond to complex problems.
  • Lower overhead and maintenance costs. Cost-savings is a major benefit of self-managed teams, as is realized through the centralizing of all technical and management tasks. Rather than applying expensive management resources to a project team, alongside technical resources, these teams are able to complete all tasks using a self-contained capacity.
  • Reduced barriers to work. In a hierarchical team structure, there are often politics, red tape, and time consuming processes that need to be considered by each member of your team. This can productivity and stifle innovation. Self-managed teams are able to be much more agile in how they work, and much quicker to adapt to new problems or opportunities.

Of course, decentralizing management and creating fully autonomous teams does come without its challenges and disadvantages. Let’s look at some of those now.

Disadvantages of self-managed teams

As you can probably guess, the primary challenges associated with self-managed teams related to organization, communication, and focus.

In particular, these can include:

  • Short term loss of productivity. Implementing and adapting to a completely new team structure can be difficult, disruptive, and potentially costly in the short term. Time to productivity is likely to be hindered while you work out all of the kinks.
  • Differences in work styles. Not all employees are the right fit for self-managed teams. Despite possessing the skills to achieve the desired results, some people just don’t have the personality or desire to operate under these parameters. It can be a challenge to find both highly competent and suitable team members to fill out self-managed teams.
  • Lag time in achieving results. Employees on a self-managed team need to develop a strong sense of comradery, commitment to the mission, and self-motivation to achieve the best results. This can take time, meaning there will likely be a lag time between team formation and peak performance.
  • Toxic group dynamics. Despite the goal of self-managed teams being to decentralize leadership, there’s always the risk that individuals or cliques within the group end up taking on de facto leadership roles, This, combined with clashing personalities, bullying behavior, idea blocking, and groupthink can all contribute to a toxic group dynamic that stifles productivity and engagement.
  • Losing focus. Giving teams complete autonomy always runs the risk of them going too far off the rails, and losing sight of the initial goal. This is especially true if management fails to provide proper guidance and training before the team is formed.
  • Training requirements. Because task management is decentralized, you will need to provide training for common manager skills like communication, conflict resolution, time management, and administration. This can be resource intensive at the start, but is imperative to creating and sustaining successful self-managed teams.

Now that we’ve talked about the advantages and disadvantages of self-managed teams, let’s dig deeper into what they look like in practice, and how to create them.

Examples of self-managed teams

As mentioned, self-managed teams have been around since the 1960s. But, they’ve seen a rise in popularity in recent years, and are now actively used in companies like Google, Facebook, Spotify, Zappos, GitHub, Electronic Arts, Valve, and Gore-Tex.

Self-managed teams come in a variety of forms, depending on the nature of your company and project.

Three common examples of self-managed team structures include:

  • Fully-autonomous self-managed teams. These teams complete ongoing work, with no top-down supervision, on an indefinite basis. The team is full of cross-trained workers who have a variety of technical and management skills related to the project goals. Fully-autonomous teams take full responsibility over their success and outcomes, and must have a strong commitment to and alignment with company goals.
  • Limited supervision teams. These teams work under supervision of a floating manager who will occasionally be called upon to make decisions, offer guidance, and break stalemates. Team members handle the bulk of day-to-day decisions related to the project, but have the added safety net of a supervisor to act as a final decision maker if needed.
  • Problem-solving or temporary teams. These teams are formed on a temporary basis to tackle specific problems or to complete special projects. They are time-limited with very tightly defined objectives and outcomes. Unlike ongoing self-managed teams, temporary teams have the added pressure of tight deadlines and a more exact description of what success looks like.

It’s entirely possible that your own self-managed teams will fall into one of these three categories, or be a hybrid. That’s perfectly fine. The key is to find what level of involvement you need from management, and how self-sufficient you can get your teams while still hitting your goals. This will take experimentation and refinement over time.

Related reading: learn how to recruit with no managers and a flat hierarchy

How to create self-managed teams

Self-managed teams are best suited to companies where the organizational culture actively supports autonomy, employee empowerment, and collective decision-making.

If this sounds like your organization, then follow these steps to start creating and experimenting with self-managed teams.

  • Define what self-managed teams are before you begin. Do you want to create fully-autonomous teams, limited supervision teams, or problem-solving teams? Or, do you want to create some combination of the three? Before you begin, create a clear mandate and structure of your future self-managed teams to ensure you, and the team, know what is required.
  • Determine if your employees are ready to self-manage. Some signs to look for include: being self-driven, trusting each other, confident decision-making, strong communication and time management, ownership over results, and independent learning. Look for individuals who actively display these traits - those are the best candidates for self-managed teams.
  • Gauge interest from possible team members. Approach your high-performing employees and present the idea of a self-managed team to them. Take their feedback, and note whether or not this is something they want to participate in. If you have enough interest, then you can move on to forming and enabling your first self-managed team.
  • Communicate goals and benefits. Before you form your team, leadership and employees must have a clear understanding of why you are going in this direction, what the expectations will be, and how it will benefit the company. Explain reasoning, benefits, and potential impact of switching to self-managed teams. This should include what it means for individual workers, teams, and departments.
  • Provide clear direction. Now that you’ve assembled your self-managed team, you need to make sure that everyone is clear on the desired outcomes from the project, and how they tie into larger organizational goals. Present the expected outcomes and desired impact. Set boundaries and guardrails on the project to keep the team on track. Work with the team to help them create guiding principles for task management and communication.
  • Establish decision-making processes. If the self-managed team is brand new, then you’ll want to hold a kick off session that outlines each team member's strengths and their expected contributions to the team. You should also, as a group, determine how decisions will be made, and how conflict or stalemates will be overcome. This shouldn’t be about designating leadership, but rather establishing processes and frameworks that can be used when required.
  • Allocate resources. Once you’ve assembled your team, given them direction, and established ground rules, the last step is to provide them with a budget and resources to complete their mandate. Because this is a self-managed team, we recommend that you allocate a lump sum budget for the year or quarter (depending on the duration of the project) and let them determine how best to spend their resources. This gives the team leeway and ownership over their own budget, and will allow them to find innovative and efficient ways to use their resources as needed.

Like with any major shift in management, self-managed teams are an iterative process. It’s unlikely that you will nail this process on the first try, so it will be necessary to keep open lines of communication with your employees to determine opportunities for improvement and refinement.

Frequently Asked Questions

What are self managed teams?

A group of employees that is responsible and accountable for all or most aspects of producing a product, delivering a service, completing a project, or solving a problem. They are self-organized, semi-autonomous, and share a combination of technical and managerial tasks.

What are the advantages of self-managed teams?

Advantages of self-managed teams include: increased productivity, enhanced innovation, reduced pressure on managers, highly motivated employees, greater ability to respond to complexity, lower overhead costs, and reduced barriers to work.

What are the disadvantages of self-managed teams?

Disadvantages of self-managed teams include the potential for: short-term loss of productivity, difference in work styles, lag time in achieving results, toxic group dynamics, losing focus, and significant training requirements.

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