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.
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.