How to Lead Self-Managing Teams? 3 Practical Tips (2023)

To succeed in fast-changing, dynamic markets, organizations must be increasingly flexible and adaptive. Self-managing teams are a key tool in creating such organizations. Also the new Scrum Guide describes the whole Scrum Team as self-managing. The design and agility of these teams enables them to respond quickly to evolving market situations, while improving employee engagement and effectiveness. The question is; how should we lead these teams? What are the key focus areas and what do they need – not only to succeed – but to thrive?

What is a self-managing team?

A self-managing team (SMT) is a group of individuals that use their diverse skills, knowledge and experience to achieve a common goal. Within boundaries, it’s the team members’ responsibility to manage their own work, decide how to achieve goals, grow as a team, continuously improve, and manage stakeholders. Successful or high-performing SMTs also help other teams and co-workers to grow, improve and thrive. Take for example a sales and marketing team with responsibility for an entire market segment like hospitality, or the metal industry. The team can’t change the price or name of the product solely. It would however, have a clear mandate to prioritize work, create a marketing strategy, find resellers, and do other similar tasks. Some activities that fall under the SMT’s remit include:

• taking ownership of sales targets
• responding to complaints and queries
• directing/implementing the marketing approach
• collaborating with other teams and sharing lessons learned
• propose price improvements

Why self-manage?

Empowered to decide on processes, objectives and product details, self-managing teams are better equipped to handle complex, unpredictable situations. They combine their skills and expertise to track deviations, make improvements, refocus and change trajectory. This contrasts with a managerial hierarchy (Lee et al. 2017), where employees report upwards and receive instructions from the hierarchy. When changes occur, a manager must be insightful and informed enough to give sound direction to multiple employees. Often, this requires alignment with other managers first, which slows down the response. If new instructions cause problems elsewhere in the organization, it often takes time before this is noted, the cause is found, and the instructions are improved. This scenario reduces both motivation and productivity. SMTs on the other hand constantly collaborate with other teams, pinpoint improvements and learn fast, making them more motivated and productive.

Common misperceptions

There are some common misperceptions about SMTs, usually related to autonomy, self-direction and planning.

1. Autonomy – SMTs don’t have, nor do they need, complete autonomy. They do however, have clear (ideally inspiring) boundaries, within which they can operate freely. For example, a SMT won’t decide on a free product giveaway, but can select focus customer segments, or submit price improvement proposals to the pricing team. A team thrives when freedom exceeds (a little) its current maturity, this gives team members the possibility to grow and take on even more responsibility.
2. Self-directed – SMTs don’t have mandate to decide - in total isolation - their own goals, direction and ambitions. SMTs need a clear overall company direction, so they can collaborate with other teams on how to best contribute to the goals and purpose of the entire organization.
3. No planning – SMTs undertake planning, but will understand that it plays a less important role than goal achievement or customer satisfaction. They will share plans with stakeholders and other teams, yet should point out that uncertainties remain and achieving goals is more important than following a plan.

Leading a team that is self-managing – 3 practical tips

When a team manages its own work, the leader’s job shifts to creating a suitable context or environment. Designing, building and improving the team context involves a lot of work, so where to focus on? Three key responsibilities arise from this new type of leadership:

1. A leader’s primary role is to deliver clear, aligned and inspiring direction. Consider slogans such as ‘effortless from door to door’ for a railway company, or ‘carbon neutral energy’ for an energy company. These slogans are, of course, backed up with a strategy, data, ambitious goals and a set of actions. Any direction given to the SMT won’t outline everyone’s individual tasks for the next half year - that’s up to them. How do successful leaders achieve this way of working? Is it just a matter of decide and convey? The best practice is to run multiple workshops where leaders and several different team members collaborate to craft a direction. It’s also crucial to validate and improve on that direction some months later. The leader must listen but also make clear and tangible decisions. The direction chosen should be one that challenges a team to think ‘outside the box’ and explore innovative ways to reach goals.
2. Safe, clear boundaries let the SMT take ownership. Teams have a pro-active, proud, engaged and can-do mindset when given the right amount of freedom. Too little freedom creates passiveness, frustration and demotivation. Too much freedom has the same effect. A leader should set a clear mandate. The team should have different decision-making areas, like planning, priority-setting, approaches, tactics, product and service improvements, or meeting customer expectations. In these areas they can make decisions themselves ánd learn from it along the way. Where less decision making authority is given, it must be clear who from outside the team decides and how fast decisions are made.
3. Last but not least, a crucial responsibility is that of building and driving healthy team culture. The leader has a huge influence on a team’s behavior, values and rules, both written and unwritten. For example, giving one team member a separate task and rewarding their work on it indirectly suggests that the team doesn’t need to collaborate. When – on the other hand – the leader asks the whole team what it can learn from a mistake, without pinpointing who is at fault, they promote a supportive culture of collaborating to rectify issues. Successful leaders have a clear vision for team culture and spend time and energy to help it flourish.

Go beyond leading the SMT - make it thrive!

Implementing a SMT does not guarantee immediate success. This is about more than declaring a team self-managing. Hard work, attention and different leadership skills are needed, such as the ability to ask ‘powerful questions’, engage with ‘radical candor’, ‘professional facilitation and ‘empathetic listening’. Years of talking to, coaching and observing leaders reveal that a priority change is needed, a realization that improving the context matters more than daily priorities or task assignment. It’s shifting focus from ‘actions, schedules and metrics’ to ‘facilitating ownership, trust and direction’. It’s a move from managing teams to explaining to stakeholders (and upper-management) what they should do differently to help teams grow faster. Above all, it’s about spending time really listening to teams, seeing what they need to take ownership in areas such as the product, customer satisfaction, planning, quality and continuous improvement.

Next steps

Take the first step in building and effectively leading SMTs. Tap into the resources below.

1. Gather honest feedback on your managerial performance from different teams and team members
2. Watch ‘Agile Leadership Nutshell’
3. Read the book ‘Agile Leadership Toolkit | How to Thrive with Self-managing teams’
4. Find a leadership coach to accelerate your growth (https://releaders.org)

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Peter Koningis author of ‘Agile Leadership Toolkit’ (available in EN, NL and DE), founder of Releaders | Redefining Leadership and leadershipcoach of different international organizations. Do you want your teams to take more ownership, do you want more Customer Focus or increased company agility? Contact Peter for more information!