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Five Tips for a Successful Transition to Self-Managed Teams

by Danielle N. Paula, Technical Assent consultant

Part Three of a three-part series

With 80% of Fortune 1000 companies reportedly now using self-managed teams in an Agile environment, you may be thinking that the traditional top-down, command-and-control organizational hierarchies may become extinct – and with good reason. There are several advantages to employing self-managed teams in an Agile environment over the traditional hierarchy structure including increased employee satisfaction, lower overhead costs, and increased stakeholder buy-in.

While you may have read previous articles about organizations successfully employing self-managed teams, it’s important to note that their success doesn’t happen overnight. There are several hurdles that can stand in your way, not only in making the transition, but also in ensuring that teams are successful once the transition is made. To be successful, you need to be willing to lay the proper foundation and be ready to actively engage throughout the transition and after. Whether you are just starting the transition or are already part of a self-managed team, here are five tips to help set your teams up for success.

1. Make Sure You Are Reorganizing for the Right Reasons

It’s not an uncommon occurrence for a CEO to determine that the company needs to reorganize into self-managed teams without understanding the real motivations behind it. There are lots of studies, anecdotes, and statistics which promote the benefits of self-managed teams like faster time to market, increased profits, and lower overhead. While this may be true, leaders need to set realistic, measurable goals before engaging in a reorganization. You’ll also need to make sure you revisit and reassess these goals often to ensure your teams are always properly aligned.

2. Communicate Early and Often

Ensure that management is involved from the get go. Start talking about the transition and take steps to set expectations. Leave yourself time between announcing the shift to its actual implementation. This will open the door to employee questions and answers, which greatly eases uncertainty (especially among managers who may find themselves taking on different roles in this new structure). If you’ve already made the transition, commit to regular open communication with employees including timely updates of the organization’s goals and visions. It’s extremely important for employees to understand organizational and project goals, as well as the context around it. Create an open-door policy with leaders so that employees can ask clarifying questions and share any frustrations related to working in a self-managed team. This will not only let employees create better work products but also let them know that it is natural to have growing pains. The open communication can also facilitate opportunities for improvements.

3.  Hire a Professional Agile Re-Org Consultant

If you have never been through an organizational transition or feel the need for expert advice to ease the transition, hiring an expert can be invaluable.. It’s inherently natural for employees to fear change. Professional Agile consultants are used to creating and working with self-managed teams. They can help show you and your employees that change isn’t so scary. A consultant can meet with leaders to delve into the “why” and “how” behind the move to self-managed teams. They’ll also be able to facilitate group exercises, focus groups, Q&A sessions, and help draft communications providing a path forward that works for your organization.

4. Use 360-Degree Feedback to Garner Employee Buy-In

Engage all employees in the reorganization process by holding focus groups or discussion panels to help influence the way the teams are created. Also solicit feedback from employees about what they like about their current positions. Ask if it make sense for the teams to be project based, goal based, or even functionally based. Evaluate if there are areas in the organization that lack expertise or support and build them up with the reorganization process. Encourage team members to provide open and honest, constructive feedback to their team members regularly to improve collaboration and work products. Gathering input from employees shows that they are valuable assets to the organization.

Engaging employees in the reorganization process and trusting them to make decisions that would directly impact the organization, communicates that they are valued by the organization. When employees feel valued, they will reciprocate by contributing more to the organization (ex., best work and ideas).

Opower, which I talked about in <Part Two> of this series, used this 360-Degree Feedback approach in a team self-selection process. Originally, they assumed that each team would be assigned one front-end and one back-end developer to carry out the work. When they initially had issues getting the right number of people with the right skills on each team, they asked employees for feedback. Specifically, they asked: “Why did you choose the team you’re on now?” Through this approach, they found that their developers were more interested in growing their knowledge set and learning full-stack development instead of sticking with just front-end or just back-end development. This feedback provided much needed insight into why employees picked their team which ultimately helped further structure the projects teams to meet both the employee and company goals. Furthermore, it increased the employees’ overall satisfaction with the process and the team they ended up with.

5. Educate Employees on Self-Management

There is often a transition period where employees will doubt that they are truly not reporting to a manager and are responsible for their own work. Some employees may have difficulty transitioning from a task-directed environment to the self-managed environment. This applies to all employees no matter their seniority or position within the company. Managers may find themselves in a new role where they are no longer micro-managing the employees and must learn to give up control and trust that they hired smart, talented people to carry out the job that will provide the intended results. Previously task-directed employees will need to now work within a team to define what and how work is done to meet the company goals and objectives. They will also need to make sure they can manage their work priorities on their own without a manager specifically laying it out for them.

Consider holding training sessions with employees to teach them self-managed work best practices. This will give them the power of knowledge and necessary tools to be successful in the new self-managed structure.

Conclusion

Remember that change is not easy and successful self-managed teams are not created overnight. It will take hard work, dedication, and a lot of time to even implement a change let alone ensure it runs efficiently and effectively. Though it can be time consuming, if done correctly, your organization can get back that time and more due to the benefits of self-managed teams like increased efficiency, higher employee satisfaction, and better quality work products. Also know that while you may have some bumps, you are joining many other organizations that have already made the transition and found it greatly successful for not only the organization, but also their employees, and customers.

This article is Part Three of a three-part series.

Part One: Do We Really Need Managers? Making the Case for Self-Managed Teams

Part Two: Are Self-Managed Teams Right for Your Organization?

two people working on design project

Are Self-Managed Teams Right for Your Organization?

by Danielle N. Paula, Technical Assent consultant

Part Two of a three-part series

Last week, we covered the differences between traditionally managed organizations and organizations using self-managed teams. Now, let’s dive deeper into some of the specific benefits of running self-managed teams, as well as some of the disadvantages.

Benefits of Self-Managed Teams

Benefit 1: Increased Employee Satisfaction

Employees who work on self-managed teams report a higher level of job satisfaction than those in task-directed, top-down management models. Self-managed teams promote ownership and direct involvement. In Chuck Blakeman’s TED Talk “The Emerging Work World in the Participation Age” he discusses why self-managed teams improve employee satisfaction:

“…[people] won’t put up with just having a job, stripped of its humanity. They actually want work, not a job, because work is meaningful. A job only pays the bills. In the participation age, people will work because they can make meaning at work, not just money. Self-managed teams [are] one great way to do that.”

Benefit 2: Higher Productivity and Lower Overhead Costs

A Cornell University case study on the economic costs and benefits of self-managed teams found that self-managed teams were able to complete work in 60-70% less time than working in a traditional hierarchy. The study also found significant cost savings on indirect management oversight costs of up to 75%. These types of savings can be applied directly back into the business to fuel its growth. The savings could be used to employ more teams, provide better salaries and benefits, or invested into the expansion of new and innovative products or markets.

Benefit 3: Direct Information Touch Points

Working in self-managed teams in a flat structure encourages the dissemination of information directly from the business leaders to the team. Leaders often speak directly to teams about the organization’s goals and objectives and encourage questions and feedback. Messages that must go through several chains of command are often inflated, deflated, or mischaracterized, ultimately leading to misinformation. Implementing this type of direct communication can decrease the risk of spreading misinformation and reduces the time it takes to travel to employees. Direct communication also provides better contextual clues for the employee. This supports clearer understanding which leads to more informed decision making.

Benefit 4: Stakeholder Buy-In

Self-managed teams focus on turning employees into stakeholders and managers into leaders. Making this conscious transition strengthens employees’ connection to the mission of the organization. For example, at the recent Business Agility Conference, O2 Agility shared their experiment of using the self-selection process to reorganize their self-managed teams at Opower. Employees were asked to assign themselves to the project they wanted to work on most. Not only were all the teams easily formed in one afternoon with all of the skills necessary for execution, but they also found that 40% of participants chose their team because it was what was best for the company, not what was best for themselves. In addition, 88% of participants reported they were satisfied with the team they ended up on and no one said they were dissatisfied.

Benefit 5: Empowerment to Make Decisions

When employees are empowered to make decisions, it can have a direct effect on the organization’s bottom line. In self-managed teams, employees are trusted to use their judgement instead of pushing information up and down a chain of command for approvals. By eliminating the necessity for elevating issues through several management channels, solutions can be implemented more efficiently and effectively.

Fast turnaround can be particularly important in customer service departments. You’ve probably had at least one frustrating call with a customer service call center, where a complaint had to go through several levels of management before a resolution was found. The speed at which a dispute is resolved can directly impact the customer’s perception of the organization and lead to the loss of expansion of its customer base.

As an example, Dave Carroll, a Canadian singer/songwriter, found that after taking a flight on United Airlines that his beloved guitar was broken in transit. United Airlines shuffled his claims requests around for more than six months without providing a resolution. In response, Dave took to YouTube and recorded a trilogy of songs: “United Breaks Guitars”, “United Breaks Guitars 2”, and “United Breaks Guitars 3”.

These three videos combined have over 19 million views on YouTube. Dave Carroll even has a page on his website dedicated to the issue. United eventually contacted Dave and offered to pay him to take down the videos. Imagine the outcome if the United service representative was empowered to resolve the issue when the incident was first reported.

Disadvantages of Self-Managed Teams

While there are lots of benefits to self-managed teams, they are not without their disadvantages. Here are a few.

Disadvantage 1: Employees must be Self-Motivated

The number one assumption an organization must make when adopting self-managed teams is that all employees can and are self-motivated and want to be self-managed. This means that the employee must have the drive and discipline to take on the necessary work without much direction. These types of employees are self-starters that can be trusted to accomplish organization and team goals without much supervision. They need to be comfortable with not having a clearly defined SOP or way forward to complete a task often developing the solution themselves.

While there are plenty of people that have these qualities, there are also plenty without. Organizations will need to carefully evaluate the people they hire to ensure they have these qualities. Additionally, team members should be encouraged to provide 360 feedback on each other’s performance to identify if team members are disengaged or not adequately supporting the team.

Disadvantage 2: Groupthink

Being self-managed can sometimes lead to “groupthink” where team members are at risk of going along with the majority instead of conducting thorough evaluations of proposed plans and solutions. Teams can combat this by encouraging team members to ask “Why?” SEMCO, a successful Brazilian manufacturing company, encourages their employees to fearlessly ask “why?” SEMCO believes that encouraging employees to ask “why?” encourages them to think thoroughly and creatively which leads to the best results for the organization as a whole.

Disadvantage 3: Not Suitable for Large Teams

Self-managed teams work best when they are small. The generally accepted team size usually falls between four and 13 people. Teams don’t work well when there are too many people. This increases bureaucracy and slows down the decision processes. Think about meetings or working groups you’ve participated in, in the past. Did you make well-analyzed decisions more quickly when there were five people or 30 people? The more team members you have the more communication paths are opened. If your organization requires larger teams to come together to make decisions, you may need managerial input to direct and manage the decision process or risk that the large self-managed teams will slow down the process and decrease productivity.

Conclusion

Removing managers and creating self-managed teams within an organization can be a great way to increase employee engagement and increase the organization’s efficiency. While there are disadvantages to this type of organization structure, with the right implementation, the benefits far outweigh them.

Next week, I’ll be covering some tips for making the transition to self-managed teams.

Part One: Do We Really Need Managers? Making the Case for Self-Managed Teams.

human-centered design team working

Do We Really Need Managers? Making the Case for Self-Managed Teams

by Danielle N. Paula, Technical Assent consultant

Organizations don’t need managers and employees don’t want them. This a bold statement, but it’s the way of everyday business at a number high-performing Fortune 1000 companies and was also covered in depth at the recent Business Agility 2017 conference.

The main problem with managers is that having so many levels of management can be extremely inefficient due to the several communication layers and general overhead purpose these managers serve. It’s not only inefficient, it could also be driving away top talent. One well known Gallup Poll found that over 50% of respondents who were seeking new employment positions, left because of their current managers.

Now, there are a few immediate ways to address this issue: (1) continuously train managers to become more efficient and more engaged with their subordinates or (2) get rid of them. In this article, we’ll exploring Option 2.

Multiple layers of management are found in hierarchical organizations. These organizations use a top-down, command-and-control style of management with the C-level suite executives at the top, worker-bees at the bottom, and a lot of layers in between (the management). Some hierarchical organizations organize themselves that way because it’s the default; it’s what everyone is used to. Others may follow McGregor’s Theory X that employees are lazy, don’t want to work, and need a manager hovering over them to ensure work gets completed.

Here at Technical Assent, we employ a relatively flat structure organized around self-managed teams. We operate under the assumption that employees are self-motivated, want to make valuable contributions, and can self-manage their tasks and deliverables to better achieve organizational goals. We are not alone. In a survey of Fortune 1000 companies, 80% reported they are, or plan to, move to self-managed teams.

Though the number of Fortune 1000 companies supporting self-managed teams is large, in the overall spectrum of businesses and organizations, this is not the norm. For example, the largest employer in the U.S., the U.S. Federal Government, still uses a top-down management approach. Additionally, even for companies supporting self-managed teams, the level of implementation varies widely. Some companies may only use self-managed teams for their developers and then assign a manager to oversee several of those small self-managed teams. Others, like SEMCO, don’t set schedules for the manufacturing plant line workers, instead allowing workers to set their own hours.

How Self-Managed Teams Work

Self-managed teams take ownership of the projects and tasks necessary to achieve an agreed upon goal shifting accountability from the manager to the employee. The “when, where, and how” are determined by the self-managed team, not by a manager. Team members are responsible for creating solutions to self-identified problems. They are given the trust and authority to implement necessary solutions to achieve organizational goals without approval from a manager.

This approach simplifies the work process and employees make decisions that directly affect business outcomes. It doesn’t force employees into a mold, which in turn opens the door to more collaboration and creativity.

Instead of relying on specialized functional silos, teams are cross-functional. Team members support each other by allowing each member’s expertise to shine. This increased feeling of being a valued participant encourages empowerment and ownership in their work products, which is not usually seen in top-down structures and can directly impact the success of the business.

This isn’t to say that self-managed teams are always entirely responsible for determining what the goals of the organization are. There is almost always a leader that the employees support (not report to) that is responsible for setting and communicating the strategic and tactical goals of the company. The team members are then given the responsibility and authority to creatively execute and deliver the results, not individual tasks.

When It Makes Sense to Shift to Self-Managed Teams

While many companies are making the switch, self-managed teams may not work for every type of organization, so it is important to understand its advantages and disadvantages before making the leap. I’ll be covering this in further detail in next week’s article. (This article is Part One of a three-part series.)