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10 Reasons Why Your Organization Needs Self-Managed Teams

Posted by Kanika Sinha

September 27, 2023

Self-managed teams will help you increase productivity and innovation in your organization.

Did you know that 85% of the total workforce around the world is dissatisfied at work? Studies reveal that over 50% of the workforce quit voluntarily yearly due to lousy management. The statistics revealed in the same survey by Gallup also show that this disengagement costs organizations up to $550 billion annually in the USA alone. That is a massive sum of money to lose over something that can be fixed by taking corrective steps. 

The first and most critical step is to create self-managed, empowered teams. These self-managed teams allow individual employees to take responsibility without day-to-day managerial supervision. 

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A self-managed team comprises trained experts and individuals working towards a common goal. They’re responsible for managing their schedules, deliverables, processes, and progress, creating a healthier work culture

Here are the top 10 reasons you need self-managed teams in your organization. 

1. Enhances innovation

With every team member bringing their unique perspective to the project, there is room for innovation and creativity. New ideas flow easily with teams eager to experiment and find solutions. This innovation mindset changes the company’s overall culture, leading to cutting-edge results.

2. Improves productivity

Without someone micromanaging them, teams set their own goals, manage their tasks, and take pride in their work. The sense of autonomy and responsibility drives team members to perform to their potential. Productivity at the company level is boosted, with each member performing to their potential while encouraging others. 

3. Helps in developing faster decision-making skills

Self-managed teams make quick, well-thought-out decisions. They can make swift decisions, bypassing the back-and-forth often associated with hierarchical structures. This agility is crucial in fast-moving businesses as they continually respond to changing market landscapes. 

4. Leads to stronger accountability

Team members in a self-managed team are accountable for their professional contributions. With a self-progress tracker in place, it promotes a culture of responsibility, where individuals work towards their commitment to deliver high-quality results.

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5. Increases employee engagement

Employees feel more seen and appreciated when making meaningful individual contributions. Self-managed teams give them a voice to convey how they can contribute towards the organization’s goals. Regular involvement in crucial decision-making builds a sense of pride and enhances employee engagement and job satisfaction.

6. Prepares teams to adapt to change

Collaborative ideas and the spirit of genuine teamwork make these teams extremely tensile. The flexibility that flows through self-managed teams teaches employees to pivot strategies, embrace new technologies, and confidently navigate uncertainty.

7. Improves internal communication

Transparency builds trust within the team. Team members communicate openly, share their insights, and resolve conflicts without ego stepping in. As a result, self-managed teams foster a collaborative and open team culture.

8. Leads to high employee retention

Self-managed teams empower each individual, making them feel involved and appreciated. These are two key reasons that make people stay with an organization. Such units also encourage personal and professional growth for each team member, thereby reducing costs associated with further recruitment.

9. Cultivates a customer-centric view

Self-managed teams have clear goals and objectives, which makes them hyper-focused on customer needs and preferences. As a result, they are better equipped and trained to respond to customer feedback promptly and tailor their approaches to deliver customer-focused service.

10. Enhances leadership skills across the board

Self-managed teams allow team members to sharpen their leadership skills as they take on responsibilities beyond their roles and learn to collaborate effectively. 

Bonus benefit: Reduced costs

The most important reason is the reduced costs that result from having a limited number of mid-level managers, a high retention rate, and increased productivity. 

The final word

Building self-managed teams can be a valuable strategy as organizations adapt to evolving business landscapes. It helps harness the workforce’s potential while positioning your company for long-term success.

Start with minor adjustments if you want to restructure your organization into smaller self-managed teams. Bring an external expert who can help you get started if needed. 

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Want to know more about setting up self-managed teams? Since 2006, Escalon has helped thousands of startups get off the ground with our back-office solutions for accounting, bookkeeping, taxes, HR, payroll, insurance, and recruiting — and we can help yours, too. Talk to an expert today.

This material has been prepared for informational purposes only. Escalon and its affiliates are not providing tax, legal or accounting advice in this article. If you would like to engage with Escalon, please contact us here.


Kanika Sinha
Kanika Sinha

Kanika is an enthusiastic content writer who craves to push the boundaries and explore uncharted territories. With her exceptional writing skills and in-depth knowledge of business-to-business dynamics, she creates compelling narratives that help businesses achieve tangible ROI. When not hunched over the keyboard, you can find her sweating it out in the gym, or indulging in a marathon of adorable movies with her young son.

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