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Self-Managed Teams: The Secret Tool to Building a Successful Business

Posted by Arya Chatterjee

September 22, 2023

Teamwork makes the dream work. But can your team run like a well-oiled machine without a manager? Let’s find out.

The world, as we know it, is divided into pre- and post-COVID-19 ways of life. The pandemic made a lasting impact on every aspect of our lives, including the way we work and organizations operate. 

With the rise of remote working over the last couple of years, older office hierarchies are giving way to new ways of team management. In the midst of work-from-home or hybrid setups, one term that keeps popping up is “self-managed” teams. It is a way of work where no day-to-day supervision is needed, and each team member takes responsibility to get things done. self-managed teams break away from a traditional setup where the manager tracks the progress of the project as well as individuals. 

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Sounds great, but how do you define a self-managed team? 

In simple terms, a self-managed team is a group of employees collaborating and working towards a common goal without the direct supervision of a manager or a boss. Each team member takes responsibility for their action and their contribution to the project while fully understanding their interdependence on each other. 

As a result, you get a team that commits to each other and the company for the task at hand rather than waiting for instructions and direction from their bosses. They understand that their individual tasks ultimately lead to the company’s growth and themselves in the long run.

Isn’t that the same as empowering your employees? 

It can get confusing as they are both an integral part of forward-thinking organizations. Autonomous employees are individuals with greater authority without having any of the team members report directly to them. Oddly enough, it can also backfire as an employee with authority and no answerability can bring the entire team down. 

On the other hand, a self-managed team has a clear segregation of responsibilities and deliverables. Self-evaluation and progress tracking is a critical component of any successful self-managed team. 

To sum it up, employees working under self-managed teams take charge of the following key components: 

  • Roles & Deliverables 
  • Individual timelines & Project schedules 
  • Processes & Workflow 
  • Progress & Challenges 

Remember, many organizations are pivoting to self-managed teams after seeing the change it brings. These teams have more: 

  • Autonomy
  • Accountability
  • A collaborative spirit

As a result, they can transform the way companies function by being agile, innovative, and adaptable. 

How does it impact my business? Why reinvent the wheel? 

The concept of a self-managed team is not entirely new. Studies reveal that organizations across industries have thrived under this system. From coal miners of the 1940s to more recent names like Haier, AVI, Zappos, and Morning Star, the spirit of self-management has made them truly successful. 

The shift towards self-managed teams reflects a fundamental change in how organizations operate today. There’s growing recognition that top-down management systems and other traditional hierarchical structures can hinder autonomy and innovation. 

As a result, self-managed teams empower employees and foster a culture of trust and self-drive. These teams are more agile and responsive, better equipped to harness their members’ diverse talents and insights.

Diverse, Innovative & Collaborative: The essence of truly self-managed teams and successful businesses 

With a rapidly evolving corporate and business landscape, self-managed, effective teams are the backbone of solid and successful companies. The best teams bring together multiple perspectives and skills for well-rounded decision-making and successful outcomes. The most necessary skills include: 

  • Ability to adapt
  • Communicate efficiently
  • Encourage a collaborative culture
  • Further accountability

Building these self-managed, diverse teams also brings soft skills into the setup. These critical factors often get overlooked in traditional hierarchy-led businesses where all decisions are top-down. 

Huge potential

Creating diverse, self-managed teams allows businesses to utilize the full spectrum of human potential that drives innovation. 

Solution focused

Employees from different backgrounds and skill sets promote creativity and problem-solving. 

Ready to take on challenges

These teams adapt easily and better address a more comprehensive range of challenges, leading to optimal outcomes collectively. 

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Self-managed, diverse teams are better equipped to understand and cater to a multicultural, globalized world. 

Beyond these practical benefits, promoting diversity also reflects an organization’s commitment to equal opportunities and inclusion, a necessity in any organization today. 

In essence, effective self-managed teams are essential for businesses to navigate the complexities of the modern world and achieve steady and sustainable growth.

Any organization, whether big or small, can adopt this method. All you need are a few tweaks, keeping your endgame in mind. 

The top 10 benefits of self-managed teams

1. Enhanced innovation

Diverse perspectives are the biggest benefits of self-managed teams. Creative ideas flow effortlessly, encouraging experimentation and looking at problems through a solution-focused lens, leading to cutting-edge results.

2. Improved productivity

Personal autonomy and responsibility drives team members to perform to their potential. They set their own goals, manage their tasks, and take pride in their work — without having a manager helicopter over them. 

3. Faster decision-making

Self-managed teams can make swift decisions, bypassing the administrative lags often associated with hierarchical structures. This agility is invaluable in fast-moving businesses, allowing organizations to better respond to changing market landscapes.

4. Stronger accountability

Each team member in a self-managed team is accountable for their actions and contributions. This accountability promotes a culture of responsibility, where individuals strive to meet their commitments and deliver high-quality results.

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5. Enhanced employee engagement

Self-motivation empowers employees by giving them a voice to convey how they want to work and contribute towards the organization’s goals. Continual involvement helps build a sense of pride and enhances employee engagement and job satisfaction.

6. Better adaptation to change

The flexibility that flows through self-managed teams teaches employees to pivot strategies, embrace new technologies, and navigate uncertainty with collaborative ideas and a genuine team effort.

7. Improved communication

Self-managed teams foster a collaborative team culture. Team members communicate openly, share their insights, and resolve conflicts without ego stepping in. 

8. High employee retention

Employees who feel empowered will likely stay with an organization. Self-managed teams encourage personal and professional growth for each team member, reducing costs associated with further recruitment.

9. Customer-centric focus

Self-managed teams are often hyper-focused on customer needs and preferences. They are better equipped to respond to customer feedback promptly and tailor their approaches to deliver customer-focused service.

10. Enhanced leadership skills

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

But what about the middle management? Won’t they feel insecure, and what about answerability? 

Let’s be honest, managers come with years of experience and knowledge that makes it easier to get the job done. However, junior managers often get confused when they move to senior roles. In place of being coaches, they continue to be players. 

Self-managed teams allow the managers to be the channel between the boardroom and their team. It gives them space to grow and contribute to the top line rather than getting stuck in the day-to-day running of projects.

To avoid turning this growth opportunity into a toxic battleground, setting some rules and boundaries from the start is essential.

5 steps to create a self-managed team structure 

1. Identify the right talent

Individuals who possess the necessary skills and expertise. They should also demonstrate adaptability, self-motivation, and a collaborative mindset. Furthermore, seek diversity in skills, backgrounds, and perspectives to ensure a well-rounded team. 

2. Establish decision-making processes

Define situations and circumstances when either consensus or autonomy is appropriate. Clear guidelines for decision-making processes allow team members to navigate choices confidently, whether collectively or individually, leading to better productivity. 

3. Provide training & resources

New learning opportunities ensure team members stay on top of industry trends and practices. These are necessary investments as they help to:
– Enhance team performance
– Demonstrate an organization’s commitment to supporting the growth and development of its employees

4. Promote accountability

Individual accountability starts with setting clear expectations and roles. It is advised to regularly track and measure performance against these objectives to ensure team members are on the right path. Feedback structures, both amongst colleagues and from managers, provide valuable perspectives and accountability checks. 

5. Celebrate successes

Celebrating successes, big or small, within the team builds a culture of appreciation and support. They:
– Help employees build confidence in their abilities.
– Enforces the power of positive feedback and a constructive mindset.
– Encourages members to put in the effort to continually better themselves. 

There is a shift towards self-managed teams amongst forward-thinking global organizations. Be one of them.

The shift towards self-managed teams reflects a fundamental change in how organizations operate today. These teams are more agile and responsive, making them better equipped to harness their members’ diverse talents and insights.

A self-managed team embodies a culture of trust, autonomy, and accountability, which are essential qualities to have in employees of all fast-growing companies. The important thing to keep in mind is that success is not a destination but an ongoing journey of growth and achievement.

The final word

Given the momentum created by these massive shifts in work culture, it’s clear that self-managing teams are a great way to build flexibility into a workplace across duties, hierarchies, and workflows. 

But remember while self-managed teams are the future, the transition may take some time. Start with taking smaller steps at your organization, making the process seamless and easy for all. If needed, take help of an external expert who can help you get started. 

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.

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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.


Arya Chatterjee
Arya Chatterjee

Arya Chatterjee is a freelance writer and consultant from Mumbai. With a background in journalism and over five years of creative writing experience working with legacy media like Architectural Digest and Femina India and brands like The Label Life, and Macy's, she crafts unique and compelling stories that engage the readers. She enjoys writing about health, beauty, fashion, and lifestyle and exploring the symbiotic relationship between thriving businesses and happy employees through her writing. She is always looking to explore new avenues to expand her creative energy.

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