A self-managed team is just the right fit for an Information Technology Department. What is it and what are the critical elements for likely success?

Introduction

What is a self-managed team? What are the critical elements for success? How does it fit within an Information Technology Department? Self-managed teams are a hot-topic within the IT world with the growth and consolidation of Agile methodologies[1]. “In fact, the Agile Manifesto includes self-organizing teams as a key principle, saying that “the best architectures, requirements, and designs emerge from self-organizing teams.”” (Cohn, 2018). Organizational Behavior (OB) is "a field of study that investigates the impact individuals, groups, and structure have on behavior within organizations, for the purpose of applying such knowledge toward improving an organization’s effectiveness" (Robbins & Judge) and “incorporating OB principles can help transform a workplace from good to great” (Robbins & Judge), in that context, understanding the dynamics of a self-managed team and the critical elements for its success will allow managers to develop the required skills, and make decisions that contribute to more successful and empowered teams.

Agile methodologies focus on self-management and self-managing teams; this paper will explore these concepts in order to provide essential background. In that context, will explore “What Is Self-Management? How Self-Managed Teams Operate Without Hierarchy“ (Roberts, n.d.)), followed by an investigation on the evolution of self-managed teams which have “been growing steadily ever since the first articles in the 1950’s and 60’s appeared on the subject” (Vregelaar, 2017) and what the most recent Organizational Behavior (OB) recommendations are in this particular area since “Self-directed teams are gaining popularity in organizations (Glenn, Snyder, Dahnke & Kuether, 2016), and are often set up because it has been found that it is linked to, amongst other things, increased productivity, job satisfaction, and organizational commitment (Cohen & Bailey, 1997; Sundstrom, McIntyre, Halfhil, & Richards, 2000)” (Spoel, 2018). Next, this paper will explore the characteristics of such teams and describe the “four main predictors for effective self-managing teams: Group task design, Group Characteristics, Encouraging supervisory behaviors and a context that supports Employee involvement” (Vregelaar, 2017). At the end of this paper, the key findings and critical success factors required to implement Agile self-managed teams in an IT department will be summarized.

Self-Managed Teams

Self-managed teams, also known as self-directed teams, self-regulating teams, and autonomous teams, are “groups of individuals with a diversity of skills and knowledge, who have the collective responsibility to plan, manage, and execute tasks independently to reach a common goal” (Spoel, 2018). Rachaelle Lynn, highlights in her article “What is a Self-Organizing Team” that “at the simplest level, a self-organizing team is one that does not depend on or wait for a manager to assign work. Instead, these teams find their own work and manage the associated responsibilities and timelines” (Lynn).

Geoff Roberts, the co-founder of Outseta, a SaaS[2] start-up, explains that they built Outseta inspired by the principles shared in Frederic Laloux’s Reinventing Organizations book (Laloux, 2014), and “to prove that there's a better way to build a business—one that results in more engaged employees who are more fulfilled in both their personal and professional lives“ (Outseta, n.d.), advocate that “In short, self management simply means “no bosses.” That’s it.” (Roberts, n.d.), and continues by explaining that “what Laloux argues is that you can run an organization without the need for hierarchy. There’s absolutely no real reason or need for a boss; but in order to operate without hierarchy, there must be well defined structures or processes to help with the things that bosses usually do” (Roberts, n.d.). In fact, “scholars did not accord on whether self managing teams have supervisors” (Vregelaar, 2017), and while we can find multiple articles supporting the  theory of no bosses (Dumaine & Gustke, 1990; Mendes, 2016; Stratman, 2012) it is also a fact that many organizations strive to empower their teams while maintaining some type of hierarchical supervision (Mills & Ungson, 2003; Fisher, n.d.; Vito, 2019).

How Self-Managed Teams Operate Without Hierarchy?

“The major obstacle to self-management, as one might suspect, was thought to be people, especially managers” (Heskett, 2006), and “a common criticism of self-organizing teams is, “We cannot just put eight random individuals together, tell them to self-organize, and expect anything good to result” (Cohn, 2018). Geoff Robert elaborates on the “necessary assumptions and perquisites for self management” as 1) “The company has figured out the principles which will guide it”, 2) “A belief in trust over control”, 3) “A belief in personal ownership and responsibility”, 4) “A belief in earned authority over positional authority”, 5) “A long term view”, and 6) “The company shares all information, including financial information, with full transparency” (Roberts, n.d.). He continues by providing several examples of how self management organization handles operational decisions, namely, a) how “each team is responsible for figuring out things like how large it needs to be, which geographies or territories it will cover, which customers it will serve. Tasks typically assigned to bosses like performance evaluations, planning, and even finding office space are distributed amongst and owned within each specific team” (Roberts, n.d.), claiming that “teams collectively are responsible for their own performance, operating procedures, and contributions to the company at large” (Roberts, n.d.), b) how meetings are organized where “rather than having predefined times and agendas for meetings, self managed organizations emphasize calling ad hoc meetings as needs arise. Every meeting is assigned a facilitator, whose sole job is to solicit feedback on items that the group would like to discuss in that present moment” (Roberts, n.d.), c) how to handle budgeting and forecasting where “self managed organizations also advocate for keeping budgeting and forecasting activities to a minimum (…) but with everyone in the organization operating with a full understanding of the company’s financial standing, self managed organizations appreciate the agility that they have to operate within those financial constraints without adhering to or spending a lot of time putting together rigid budget” (Roberts, n.d.), or how d) decision making takes place, elaborating that “the key pillars of decision making in a self managed organizations are that you do not rely on hierarchy to make decisions, nor do you need consensus (everyone in agreement) on which decision to make” (Roberts, n.d.), and adding that “instead, Laloux advocates for the use of what he calls the “Advice Process” to make decisions in a self managed organization. Simply put, advice process means that any employee can make any decision (including spending company money) as long as two conditions are met. 1) They seek the advice of experts. 2) They seek the advice of the people that will be most directly impacted by their decision” (Roberts, n.d.).

Mike Cohn, one of the contributors for the development of the Scrum framework[3], elucidates that “the benefit of allowing a team to self-organize isn’t that the team finds some optimal organization for its work that a manager may have missed. Rather, it is that by allowing the team to self-organize, it is encouraged to fully own the problem of performing its work” (Cohn, 2018), Cohen elucidates that “not every agile team will choose to organize themselves the same way, and that’s OK. [Instead,] making use of the collective wisdom of the team will generally lead to a better way of organizing around the work than will relying solely on the wisdom of one personnel manager” (Cohn, 2018). Some self-managed teams “will decide that all key technical decisions will be made by one person on the team. Other teams will decide to split the responsibility for technical decisions along technical boundaries: Our database expert makes database decisions, and our most experienced Python programmer makes Python decisions” (Cohn, 2018), and “other teams may decide that whoever is working on the feature makes the decision but has the responsibility of sharing the results of the decision with the team” (Cohn, 2018).

Evolution of Self-Managed Teams

“The use of self-managing teams in organizations has been growing steadily ever since the first articles in the 1950’s and 60’s appeared on the subject.” (Vregelaar, 2017). The same article refers that “based on Surveys, Druskat and Wheeler (2004, p. 65) report that: “79% of companies in the Fortune 1,000 and 81% of manufacturing organizations currently deploy such “empowered,” “self-directed” or “autonomous” teams”” (Vregelaar, 2017). Nevertheless, Joost claims that “although the label, self-managing teams, has gained traction in recent management literature, it is by no means a novel phenomenon” (Minnaar, 2018), and part of the investigation for his PhD, he tracked the idea back to 1941, explaining that “almost from the birth of modern organization studies, researchers have argued for a more decentralized and democratic approach. Even in the 1940s, theorists suggested alternatives to ‘bureaucracy’s confining routines and rules.’” (Minnaar, 2018). “The academic roots, and empirical evidence of, self-managing teams can be traced to the 1950s when British scientist, Eric Trist, reported on self-regulating coal miners (…) Subsequently, Trist’s work was built upon. Examples include Scandinavian experience with semi-autonomous teams in the 1970s, self-managing teams at the American Gaines Dog Food plant in the 1980s, and self-managing organizations like Morning Star, Zappos, Valve, FAVI, Haier, Handelsbanken, and Buurtzorg in more recent publications” (Minnaar, 2018). Joost argues that “the push for flatter organization structures became something of an obsession in the 1980s and 1990s business literature. Academic researchers, together with influential business consultants like Peter Drucker and Tom Peters, urged their readers to start de-bureaucratizing their firms” (Minnaar, 2018). He claims that “calling self-managing teams a novel phenomenon is utter nonsense, as we have shown this concept is firmly grounded in academic literature” (Minnaar, 2018), and that “what seems to have changed, however, is that the concept is now actually being ‘practiced’ more visibly, and with more mainstream traction” (Minnaar, 2018).

Organizational Behavior Recommendations on Self-Managed Teams

Robbins and Judge explain that "research results on the effectiveness of self-managed work teams have not been uniformly positive. Some research indicates that self-managed teams may be more or less effective based on the degree to which team-promoting behaviors are rewarded" (Robbins & Judge), and continue by informing that "some research indicated that self-managed teams are not effective when there is conflict. When disputes arise, members often stop cooperating and power struggles ensue, which lead to lower group performance" (Robbins & Judge). In an article by Magpili and Pazos, they conclude that “the analysis corroborates that successful implementation of [self managed teams] (SMTs) requires a thorough understanding of input factors and an ability to manage those factors at different levels in the organization. Implementing SMTs without consideration of these factors will almost certainly lead to failure” (Magpili & Pazos, 2017). They reinforce that their “review revealed that a flatter organizational structure, reduced formalization, and an empowering culture that supports and facilitates autonomy provide the ideal organizational context for SMTs to thrive” (Magpili & Pazos, 2017), and highlight that “SMT success is far from an overnight success story. Evidence suggests that developing and eradicating old habits takes time. All parties need to engage throughout the implementation process, including the team members, team leaders, external leaders, and upper management. As the team matures, they gain more capability to act autonomously and require less help from the external leaders. Over time, the norms and strategies they form will benefit the organization greatly” (Magpili & Pazos, 2017).

Self-Managed Teams Are Gaining Popularity in Organizations

As explored in the Evolution of Self-Managed Teams section, self-managed teams are no longer a novelty, “the fact is that many large, highly successful companies like W. L. Gore, Semco, Barry Wehmiller and countless others have been structured this way for up to fifty years” (Blakeman, 2014). Blakeman affirms that “many companies have benefited for decades from giving people back their brains. These companies grow faster, are more productive and more profitable, have lower turnover, and have increased longevity. As more and more owners and investors see the numbers, they will demand that their companies move in this direction” (Blakeman, 2014). In a McKinsey & Company article we learn that “small, independent teams are the lifeblood of the agile organization” (Bossert, Kretzberg, & Laartz, 2018), and it advocates that in IT management, “instead of concentrating technology professionals in a central department, agile companies embed software designers and engineers in independent teams, where they can work continually on high-value projects” (Bossert, Kretzberg, & Laartz, 2018), arguing “that autonomy is especially beneficial to teams working on processes and capabilities that directly affect the customer experience” (Bossert, Kretzberg, & Laartz, 2018). In another article by Harvard Business Review we analyze that “over the past 25 to 30 years, agile innovation methods have greatly increased success rates in software development, improved quality and speed to market, and boosted the motivation and productivity of IT teams” (Rigby, Sutherland, & Takeuchi, 2016), the authors concluded that “allow teams that have mastered the process to customize their practices” (Rigby, Sutherland, & Takeuchi, 2016) is one of the “crucial practices for capitalizing on agile’ s potential” (Rigby, Sutherland, & Takeuchi, 2016).

Characteristics of Self-Managed Teams

Roos ten Vregelaar references Hackman who “describes that successful teams possess the following characteristics: they satisfy external and internal clients, develop capabilities for future performance, and members of those teams find meaning and satisfaction within their team” (Vregelaar, 2017). In a Lumen Learning course we can find that “overall, self-managed teams include these characteristics:” 1) “The power to manage their work”, 2) “Members with different expertise and functional experience”, 3) “No outside manager”, 4) “The power to implement decisions”, 5) “Coordination and cooperation with other teams and individuals impacted by their decisions”, and 6) “Internal leadership, based on facilitation. This means that a rotating leader focuses on freeing the team from obstacles as they do their work” (Lumen Learning), some of these items are corroborated by Mike Cohn’s article “Self-Organizing Teams Are Not Put Together Randomly”, where he indicates that “as a cross-functional team, it is important that all skills necessary to go from idea to implemented feature be represented on the team. Initially this may mean that team size is slightly larger than desired” (Cohn, 2018), “Subject to considerations of team size, you should strive to balance skill levels on the team. If a team has three senior programmers and no less-experienced programmers, the senior programmers will need to code some low-criticality features that they could find boring. Not only might a junior programmer have found such features enjoyable to work on, that programmer would also benefit from learning through association with the senior programmers.” (Cohn, 2018), he also mentions that “just as we strive to balance technical skills, we should strive for a balance between those with deep knowledge of the domain in which we are working or the problem we are attempting to solve” (Cohn, 2018). Cohn alerts to the fact that “diversity can mean many different things—gender, race, and culture being just three among them. Perhaps equally important can be how individuals think about problems, how they make decisions, how much information they need before making a decision, and so on” (Cohn, 2018), and finalizes by saying that “it takes time for agile team members to learn to work well together. Strive, therefore, to keep team members together who have worked well together in the past. When forming a new team, consider how long members will be able to work together before some or all are dispersed to other commitments” (Cohn, 2018).

Predictors for Effective Self-Managing Teams

In his research, Vregelaar used the framework of Cohen, Ledford Jr, and Spreitzer, and explains that “Cohen et al. (1996) describe four main predictors for effective self-managing teams: Group task design, Group Characteristics, encouraging supervisory behaviors, and a context that supports Employee involvement” (Vregelaar, 2017). In the Group Task Design predictor, Vregelaar describes that “work design and social-technical theory point out that task design contributes to effective SMTs by their effect on motivation and their impact on self-regulation. There are several attributes of group task design that advocate for work team motivation and self-regulation: group task variety, group task identity, group task significance, group task autonomy and group task feedback” (Vregelaar, 2017). Regarding Group Characteristics, it states that “this predictor is split up into the smaller sub-categories: group composition, group beliefs and group processes. Group composition consists of the variables group expertise, group size adequacy, and group stability. Group beliefs, those beliefs that a group shares with its members, can be split up in group norms and group self-efficacy. The sub-category group process refers to the interaction between group members when on the job. Group process is divided in group coordination and group innovation processes. Part of the effectiveness of a self-managing team may depend upon the ability of the team to solve problems and implement innovative ideas to address the change in task demands. Group characteristics is found to predict absenteeism and team ratings of performance but is not related to QWL [Quality of Work Life] (Cohen et al., 1996)” (Vregelaar, 2017). When looking to the Encouraging Supervisory Behaviors predictor, it “is the attribute focused on self-leadership in self-managing teams. This self-leadership is established through a facilitating supervisor. There are six leadership behaviors this supervisor should adhere to: encourage self-observation/self-evaluation, encourage self-goal setting, encourage self-reinforcement, encourage self-criticism, encourage self-expectation, and encourage rehearsal” (Vregelaar, 2017). Finally, in the Employee Involvement Context predictor, Vregellar explains that “an organizational context that supports the involvement of employees, results in more effective self-managing teams. For SMTs to be effective, several elements of organizational design should be moved to lower levels in an organization. Cohen et al. (1996) mention five design elements: power, information, rewards, training, and resources. The more these five elements are moved down the organization the more employees will take ownership and responsibility for their task which in turn motivates performance. The five elements reinforce each other” (Vregelaar, 2017). Reinforcing the predictors mentioned by Vreegelaar, Bessert et al. (2018) strengthen the idea that to empower self-managed teams, organizations must 1) ”put strong performers on independent teams, especially at the outset”, 2) “provide teams with a clear view of their customer”, 3) “allocate resources up front, then hold teams accountable”, 4) “define outcomes, then let teams chart their own path toward them”, 5) “step inside independent teams to enable their success” , and 6) “commit to retraining managers for their redefined roles (Bossert, Kretzberg, & Laartz, 2018).

Conclusion

There are different perspectives of what a self-managed team is, going from the extreme of “in short, self management simply means “no bosses.” That’s it.” (Roberts, n.d.), to the ones with some type of hierarchical supervision (Mills & Ungson, 2003; Fisher, n.d.; Vito, 2019). A balanced perspective is provided by Steffan Surdek who states it is 1) “a team that has a certain level of decision-making authority. This level may change and evolve over time, but there is a clear sandbox defined where teams can make decisions”, 2) “A team that is working toward meeting their emerging vision”, and 3) “A team that takes ownership of how they work and continuously evolves through having a continuous improvement mindset” (Surdek, 2016).

Self-Managed teams are a concept that can be tracked back from the 40’s (Minnaar, 2018), nevertheless, “has gained traction in recent management literature” (Minnaar, 2018), most likely because the “concept is now actually being ‘practiced’ more visibly, and with more mainstream traction” (Minnaar, 2018). In an Information Technology context, “agile project management continues to gain momentum as an early 21st century approach for managing the development of innovatively new products and services” (Rico), and “agile innovation methods have greatly increased success rates in software development, improved quality and speed to market, and boosted the motivation and productivity of IT teams” (Rigby, Sutherland, & Takeuchi, 2016). For this, it contributes the fact that “the Scrum framework prescribes that teams should be self-sufficient when it comes to achieving the sprint goal and performing their tasks” (Veerman, 2017), which originates in the Agile Manifesto, defending that “the best architectures, requirements, and designs emerge from self-organizing teams.”” (Cohn, 2018).

The benefits of implementing self-managed teams in software projects are highlighted in several articles (?zerten, 2016; Lynn; Spoel, 2018; Veerman, 2017), and summarized by Arda ?zerten as 1) “improved quality, productivity and service”, 2) “greater flexibility”, 3) “reduced operating costs”, 4) “faster response to technological change”, 5) “fewer, simpler job classifications”, 6) “better response to worker’s values”, 7) “increased employee commitment to the organization”, and 8) the “ability to attract and retain the best people” (?zerten, 2016). Nevertheless, several studies demonstrate that implementing self-managed team without considering specific predictors “will almost certainly lead to failure” (Magpili & Pazos, 2017). To help organizations to build the environment necessary for successful self-managed teams, Vregelaar used the framework of Cohen, Ledford Jr, and Spreitzer, and defined the four main predictors for effective self-managing teams: Group task design, Group Characteristics, encouraging supervisory behaviors and a context that supports Employee involvement” (Vregelaar, 2017). To build this context, ?zerten highlights that “organizational structure should be decentralized and less formal. In addition, organization context should be moved to lower levels to endorse team member involvement to the success of self-directed teams” (?zerten, 2016), and Rico adds that “agile teams must be given adequate time, money, tools, authority, and other resources necessary to complete the job. This doesn’t mean they are without oversight. However, this should never be in the form of day-to-day micromanagement” (Rico).  An important factor to consider, as concluded by Surdek, is that “as a leader, it is also important for you to align your actions and decisions to support your teams in their journey toward self-organization. If the teams start noticing you are asking them for one thing and acting in the opposite way, you will quickly lose credibility” (Surdek, 2016).

“Research has regularly demonstrated that when employees feel empowered at work, it is associated with stronger job performance, job satisfaction, and commitment to the organization“ (Lee, Willis, & Tian, 2018), Organizational Behavior modern management trends put emphasis in empowerment, and self-managed teams are a corollary of such events. In any case, “although agile teams are often referred to as self-organizing, self-managed, or self-directed, they are not leaderless. A strong leader is a major success factor. The leader must have instant credibility, experience, and charisma. Although somewhat hard driving, they must be strong, bold, visionary, articulate, well-respected, and have clear formal authority over the team” (Rico).

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[1] Agile methodology is a type of project management process, mainly used for software development, where demands and solutions evolve through the collaborative effort of self-organizing and cross-functional teams and their customers (Muslihat, 2018).

[2] SaaS is a method of software delivery that allows data to be accessed from any device with an Internet connection and web browser. In this web-based model, software vendors host and maintain the servers, databases and code that constitute an application (Singleton, 2019).

[3] Scrum is an agile way to manage a project, usually software development (…) Scrum relies on a self-organizing, cross-functional team. The scrum team is self-organizing in that there is no overall team leader who decides which person will do which task or how a problem will be solved (Maintain Goat Software, n.d.).

Note: This article was prepared based on the final paper I wrote for the 647 - Organizational Behavior and Development course in the Maryville University of St. Louis, under the guidance of Prof. Francis A. Lonsway.