Self-Managed Teams in Project Management

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By Olaf Bach (Part 1) and Shonna Waters, PhD (Part 2)

First, let’s try and define the terms self-managed teams, self-directed teams, and self-organized (or self-organizing) teams.

  • Self-managed teams are work teams that are not (fully) integrated into a top-down chain of command and that do not have a single team leader with complete authority over the team’s work. The term can capture varying degrees of decentralized authority and could thus encompass both radical and moderate approaches towards decentralized decision-making.
  • Self-organized teams can be defined as a kind of self-managed team in which decision-making authority does not lie completely with the team. For example, the team’s purpose and goals are dictated from the outside, e.g. from a boss role within the managerial hierarchy. But beyond those decisions that are made from “above”, the team can organize itself and could have decision-making authority about how to reach a given goal.
  • Self-directed teams can be defined as self-managed teams that have more decision-making power than “just” self organizing. The authority of self-directed teams would extend, for example, to strategic questions including the team’s purpose and goals. Such self-directed teams could also be called self-governing teams, as governance implies a wider scope than merely self organization.

In short, self-directed teams are autonomous, whereas self-organizing teams are autonomous only in how they do things (not in why they do things or in what they do).

Examples of self-managed and self-directed teams: some are self organizing, others are fully autonomous

Agile or scrum teams in this sense would be understood as self-organizing teams, with some features of the methodology that give them a reduced form of self-directedness. (See also Mary de Jonge’s discussion of the concepts with regard to scrum coming to this conclusion).

Teams (or circles) in Holacracy on the other hand, have more means to direct themselves while being embedded in the overall organizational governance structure.

Famously, cabals, as project teams are called at the game development company Valve, are truly self-directed, as are employees when they choose to affiliate with a cabal.

These examples of self-directed work teams are embedded in a wider organizational system. Varying levels of team autonomy are a function not only of the chosen organization model but also of the particular context in which the self-managed organization operates.

Use the Management Functions Matrix to define the degree of self-directedness for self-managed work teams

If you consider granting teams in your organization higher degrees of autonomy, without committing to a radical organizational model in an “all in” fashion, we recommend working along general management functions to specify decision-making authority.

By doing this you can determine and codify what the team is free to do (and how it can do it) , which decisions it can make, e.g. regarding its purpose, its budget, or its membership, and how those decisions are aligned across the wider organization. Full article: Self Managing Teams

What are the four types of teams? (Part 2 by Dr. Waters)

Many companies stick to the traditional team management hierarchy because that’s what they know. 

The traditional manager role may be quickly disappearing in response to calls for new ways to look at team management. In fact, 37% of managers think their position will disappear in the next five years.

Here are four alternatives to the traditional management style.

Project teams

Project teams are cross-functional groups with specialists from different departments who work together on specific projects. A project manager often leads these teams.

A project team usually works together for a fixed length of time and disbands once the project is complete. These teams may be measured on outcome but are often measured on execution to a plan (e.g., completing tasks with a defined time and budget).

Self-managed teams

A self-managed work team is a small group of employees who take full responsibility for delivering a service or product through peer collaboration without a manager’s guidance. 

This team often works together long-term to make decisions about a particular process. These teams may be measured either by output or outcome, with outcome being the better choice.

Virtual teams

A virtual team consists of employees from different regions working remotely or in different offices. They primarily communicate through video conferencing, phone calls, messaging, and email. Any of the other team types may also be a virtual team.

Operational teams

Operational, or functional, teams are groups of employees dedicated to a specific ongoing role, like customer support or sales. All the members of an operational team support one overarching goal and process. They tend to measure themselves on output rather than outcome.

What are self-managed teams?

While self-managed teams aren’t new, they are seeing a surge in popularity as remote work becomes the new normal. Plus, with managers feeling less supported by the organization and less able to effectively navigate rapid change, more teams may experiment with self-management by choice or necessity.

Self-directed teams take full ownership and responsibility to drive business results for a particular process. Unlike an operational team, most self-managed teams don’t have a hierarchy. Instead, self-designing teams have more autonomy over their processes and roles within the bounds of what team members agree is needed to achieve agreed upon team outcomes.

how self-managed teams work(Image source)

A self-managed team also has more discretion over decision-making within their process and how the entire team is managed. While this can pose some unique leadership challenges, it also offers leadership opportunities and skill development that may not be accessible for a traditional team.

What are the benefits of self-managed teams?

Younger generations entering the workforce are more interested in developing expertise than in rising through the ranks, which 51% of managers see as an opportunity. Even among other generations, workers are becoming more aware of the need to stay relevant and gain new skills and experiences. Self-managed teams are a great way to expand employees’ experience and allow them to try out and master new capabilities through rotating roles and learning from other teammates. 

Good self-managed teams demonstrate many of the benefits of having a great manager. These teams often develop more effective decision-making practices that combine considering more viewpoints, more natural collaboration and give-and-take, and moving toward action to remove obstacles and stay focused on the shared outcomes.

benefits of self-managed teams

(Image source)

The close-knit, communal feel of autonomous teams can drive innovation and motivation, too. Each team member feels personally responsible for team performance, inspiring employees to do excellent work and share ideas for improvement more readily. 

Fewer barriers in their work can lead to increased productivity, too. Since as far back as 2001, companies like RCAR Electronics have reported saving $10 million annually after implementing self-managed teams, showcasing the benefits that self-management can offer.

What are the cons of self-managed teams?

Despite the benefits, self-managed teams are hardly a silver bullet to productivity. Implementing and adapting to any new structure can be difficult, and self-managed teams are no exception. 

Self-managed teams often take a long time to set up and execute effectively. Certain employees may not be the right fit for self-management, and camaraderie, commitment, and competence are needed before seeing the benefits of a successful self-managed team. 

Plus, without the proper training, self-managed teams can flounder and lose motivation.

One major concern around self-managed teams is inequality. Compared to traditional teams, some self-managed teams have seen a 24% estimated pay gap for women. This inequality can lead to stifled innovation when members fear sharing ideas and a team succumbs to groupthink. 

Excessive meetings and a disconnect from overall business goals can also set a self-governing team off on the wrong track. Before developing autonomous teams, it’s crucial to give members the right training and guidance on their role in an organization.

What are the characteristics of self-managed teams?

When self-managed teams are implemented right, they’re known for being highly effective, innovative, and driven. 

Here are a few key characteristics that distinctly set great self-managed teams apart from other team structures. 

They’re self-driven

These teams collaborate on one central, common goal every day. They know the target, and they’re driven to support their team and do their part. No one waits for a manager or another team member to tell them what to do.

They trust each other

Self-managed teams are all-for-one and one-for-all. These teams innovate well because they are comfortable with each other and share their ideas freely. They know their team is dedicated to doing the best work possible together.

67% of employees say they would go above and beyond if they felt valued and engaged. These team members embody employee engagement and often excel for the benefit of the team.

Employee-driven decisions are the norm

Leadership is a must for self-managed teams, but no one person takes on the leader role. Instead, everyone contributes to decisions. These teams know their process best, and the organization trusts them to make informed decisions within reason. 

They have high self-awareness

Self-managed team members are always looking for ways to improve their performance and the overall process. These teams know that without their effort, a service or product doesn’t get completed. 

They have strong communication

63% of employees have wanted to quit because poor communication got in the way of their jobs.

Being on a team that values and prioritizes open communication helps self-organizing teams thrive. These teams readily contribute their opinions and unique experiences to drive the team forward.

Are you ready to build a self-managed team?

Not every team is ready to be self-managed. But, if you already have team members going above and beyond their specialties, a self-managed team may be a good option. 

10 essential steps to self-managed teams

Jumping into self-managed teams can be challenging, and you risk losing your team’s best people if the experiment falls flat. Without the proper training and structure, adapting to a self-managed team is often a more significant undertaking than many organizations realize.

How to move toward self-managed teams

Here are some innovative steps that you can take to ease into self-managed teams.

Gauge interest from possible team members

Identify employees that could be a good fit for a self-managed team and see if they are interested in participating.

Provide guidance and guardrails

Self-management should mean rudderless. These teams do best when they understand the organization’s larger goals and values and cann check-in to stay aligned to them. Leadership can be clear about the boundaries for teams and help them define what outcomes will matter most.

Define team objectives and goals

Clarify why a self-managed team is best for a service or process, then define your new team’s guiding principles and goals.

Develop team roles and decision-making standards

A self-managed team needs base guidelines to thrive. Defining who does what and how decisions are made can set your team on the path to success.

Offer training for employees

Provide training on how self-managed teams work and how the process will adapt to the new team style.

Practice on a project with a volunteer team

Before diving in, set up your employees to walk through a particular process together for practice, slowly adding self-management features. Then, get ongoing feedback on how the team can run more smoothly. Review full article:

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