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Natalia Rossingol

Leading from Within: A Guide to Self-Managed Teams

Want to build and support a self-managed team that calls the shots? Here's all you need to know about getting a self-managing team to a great start.

Autonomy and empowerment are becoming key concepts in contemporary business environments. Hybrid workplaces, which gained increased popularity after the Covid 19 outbreak, offer flexibility for employees and promote deep collaboration within a group. For this reason, many organizations, (in particular, software development companies) shift to a new organizational structure, implementing self-managing teams. 

The practice of building self-managed teams can potentially boost performance and lead to unusual creativity, unleashed from under the pressure of traditional management hierarchy. However, it also involves risks and can be a pretty frustrating experience if applied wrongly.

So let’s discuss the nature of self-managed teams in more detail.

What is a self-managed team?

A self-managed team (also known as self-organized) is a group of employees who work collaboratively and share responsibilities without the direct supervision of a manager. This team consists of interdependent individuals who autonomously regulate their behavior, possess a variety of work skills, and have decision-making power. They monitor their own performance and fulfill management tasks.

Such a team model excludes a traditional hierarchy, so team members plan processes, workflow, and schedules autonomously and make commitments to each other rather than to an external leader. This way, the focus here is on the outcome, and not on the title. 

In his book “Reinventing Organizations”, Frederick Laloux describes self-managing teams as one of the three main breakthroughs (along with purpose and wholeness) of Teal Organizations – revolutionary companies that are based on the principles of employee self-expression and authenticity.  

Yet, even though we may have an impression that self-managing teams are typical only to contemporary organizations, they are not a novel phenomenon. Theoretical alternatives to traditional bureaucratic systems were suggested back in the 1940s, and the empirical evidence can be traced back to the 1950s when a British scientist Eric Trist wrote an article about self-regulating coal miners.

Further examples include Scandinavian semi-autonomous companies which existed in the 1970s and self-managing teams at the American Gaines Dog Food plant in the 1980. Among more recent examples, we can find companies like Morning Star, Zappos, FAVI, Valve, and Buurtzorg.

This is why, according to Joost Minnaar, a co-founder of “Corporate Rebels”, the rise of self-managed teams nowadays is rather the revival of older concepts, so we might be trying to reinvent a wheel:

What seems to have changed, however, is that self-management is now actually being “practiced” more visibly, and with more mainstream traction.   

The characteristics of self-managed teams

Self-managed teams can be different. First of all, they fall into three categories based on the level of autonomy and purpose:

  1. Fully autonomous self-managed teams. These consist of crossed-trained workers with different skills relevant to the project. The workers are not supervised from the top, taking individual responsibility for the outcomes and visualizing what project success looks like. A fully autonomous team is formed on an indefinite basis.
  2. Limited supervision teams. In this model, team members make the majority of decisions, but work under the supervision of a manager who provides guidance and can call the shots when necessary.
  3. Problem-solving or temporary teams. These teams are formed to conduct a time-limited task, like completing a specific project or finding a solution to a problem. Since they’re temporary, team members have to meet tight deadlines and fulfill certain expectations.   

As an organizational structure, a self-managed team has the following characteristics:

Shared leadership

Team members have equal rights, and no one has authority over the others. There is no external leader - team leaders may be included in the structure, but their role will not be that of a conventional manager. They will rather function like mentors and facilitate team-building.

Shared leadership means that power is decentralized and distributed horizontally, while in the traditional management system, it flows from top-down – from the leader at the hierarchy top down to middle-link managers and other employees. This means that the mechanism used to direct individual behavior is peer control:

Team members help regulate non-productive individuals when team rewards depend on peer evaluation. On the other hand, peer pressure may become an inhibitor when strict norms are imposed leaving no room for dissent or creative ideas. - Nina Christina Magpili Smith and Pilar Pazos, Self-Managing Team Performance: A Systematic Review of Multilevel Input Factors

Independent tasks

In a self-managed team, roles are clearly defined, and everyone knows what they are working on. Team members assign and perform tasks, not waiting for guidance from the top and taking complete ownership of their results.

Typically, the members of a self-managing team have different expertise and functional experience.

Autonomous decision-making

Unlike traditional management models, where a decision is made and authorized by a leader, self-managed teams empower employees to participate in all or most aspects of the decision-making process. This way, decisions are made internally, and everyone can contribute.

Frederick Laloux mentions the following example. In 1990 Jean-François Zobrist, the CEO of FAVI, faced a tough situation: there wasn't enough work to keep all the employees in the company. The obvious solution was to fire some workers. Yet, he let the employees talk. One man suggested keeping everybody but shortening work time to 3 weeks per month. This idea was accepted well, and a decision was made very fast.

In self-managed teams, people are also encouraged to make individual decisions, without group approval, on condition they have consulted with a subject-matter expert and those who will be directly impacted.

Shared responsibility

All employees are collectively responsible for the final product, and take full ownership of the individual tasks assigned specifically to them.

What are the benefits of self-managing teams?

The benefit of allowing a team to self-organize isn’t that the team finds some optimal organization for its work that a manager might 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. - Mike Cohn.

Giving your team the authority to self-manage can have a significantly positive effect on the team's success. Let’s mention the most obvious benefits of self-management:

  • Higher motivation and increased productivity. A self-managing team is a great learning environment where people can safely exchange experiences with peers. They get a chance to enhance their undeveloped skills, and they can also develop totally new skills since responsibilities can rotate from one person to another.
  • Self-expression positively impacts team members’ motivation and therefore results in greater employee engagement – a sense of growth is inspiring and leads to more commitment, increasing team effectiveness.
  • Quality & customer focus. Instead of simply doing what a manager says, the team works to satisfy the customers’ needs, using their feedback to improve the product or service. 
  • More innovation. People get more room for exploring new methods and techniques. Not limited by any agenda, they look for fresh ideas and take more risks.
  • Speed. Since self-managing teams focus their efforts on a specific task, they can easily respond to unexpected challenges as they appear. Besides, they do not have to deal with bureaucracy. There is no need to wait for approval from the top – you can make a decision and act immediately. This makes self-managing teams more flexible.
  • Adaptability. Priorities can change, and a self-managed team is good at shifting to a new course of action.
  • Cost-effectiveness. By developing successful self-managed teams, you can save costs as you don’t have to hire or train managers.
  • Less burnout for managers.  The job of a manager involves a lot of stress, a high workload, and much responsibility. A 2019 study, conducted by Boston Consulting Group, showed that 80% of interviewed managers and employees think management is harder than before, and only 37% of managers want to stay in their position. One of the key study results was that management is no longer the most attractive career progression model – there are alternative options, and they become more and more popular.

Disadvantages of self-managed teams

No doubt, self-organization is a powerful concept. Yet, just like traditional teams, self-managed ones face challenges that are not always easy to overcome.

In his article “Why Self-Organizing Teams Do Not Work” Cliff Berg, the co-founder and managing partner of Agile 2 Academy, emphasizes that even though self-management is a central pillar of the Agile movement, it is not a silver bullet.

According to the Agile Manifesto, “The best architectures, requirements, and designs emerge from self-organizing teams.” Sarcastically pointing out that the title of his article sounds like heresy, Berg explains that this doesn't always work:

While the Agile Manifesto is brilliant, and has largely stood the test of time, it is not perfect: it was not burned into a stone by the Heavens. It was created by a group of people, and it can be wrong.   

So let’s analyze why self-managed teams are not perfect:

  • They may be hard to implement. It may take some time before a team starts working coherently and effectively without a leader’s guidance. This is why, to build a sustaining and successful self-managed team, it’s important to provide training for decision-making and management skills. Without proper training, a team may start looking for a leader, falling back into the old hierarchical structure.
  • Complex issues may still need to be managed. Sometimes it takes more than a single discussion or a meeting to resolve an issue. It might involve many email exchanges and whiteboard discussions. Of course, it would be better if someone managed such a process.
  • Toxic team dynamics. The very essence of self-managing teams is decentralized leadership – yet, in practice, some ambitious team members may unofficially assume leadership roles. This will reduce or eliminate individual autonomy and may result in personality conflicts and even bullying. There may also happen a situation when after reorganizing the team structure, people who previously occupied leadership positions will have to lose their “higher” status. It might lead to different conflicts and fights for authority. But without psychological safety, it won't be possible to achieve the peak of productivity. Fear will stifle innovation. Serious issues will not be addressed. Since there is no leader who could direct the group into creating a psychologically safe environment, a self-managed team may have problems trying to fight toxic behaviors.  
  • Loss of alignment with the company goals. Focused on their narrow goals, a self-managed team may end up losing connection with the company and taking up a different direction.
  • Inequality. A 2019 study “Peer Bargaining and Productivity in Teams” aimed to analyze the division of pay and productivity in self-managing environments. Its results showed that self-management may have negative implications for females. While the females participating in the study received compensation below their productivity level, men were overcompensated. Inequality in the workplace can cause problems with motivation and productivity, as the members of the discriminated group will not work to their full potential.

How do self-managing teams operate?

Self-organization… does not mean letting people do whatever they want to do. It means that management commits to guiding the evolution of behaviors that emerge from the interaction of independent agents instead of specifying in advance what effective behavior is. - Philip Anderson, The Biology of Business

In a self-managed team, members plan, organize, and monitor their own work. Everyone performs their own duties and responsibilities, working to achieve the common project goals. Since there is no single manager, the whole team is in charge of the management process. All members determine operating procedures, set goals and formulate a vision, and also perform evaluations.    

Frederick Laloux describes self-managed teams through the following criteria:

Information Flow

Everyone has access to information. Even the most sensitive information is not kept secret.


Salaries are often self-set, and salary differences are narrow. There are no promotions in the usual sense.

Role Allocation

Roles get rearranged on the agreement and can evolve over time. Some roles can be created, some can be removed, and some will stay permanent. Usually, roles in self-managing teams are not tied to work descriptions.  

Purchases and investment

Anyone can spend resources the way they find appropriate.


If someone fails to do their job well, he gets confronted by the team. A person who doesn't fit in won't stay long.

Typically, self-managing teams do not schedule regular daily or weekly meetings, preferring to hold them when necessary. For these meetings to be productive, there should be a facilitator – yet, this does not have to be an external leader. Every team member can assume this role in turn, facilitating a particular meeting.  

The work of such a group is a great illustration of the Performing Stage of team development, according to Tuckman, with its well-established organizations, clear roles, and well-tested problem-solving techniques.

How to build and support a self-managed team

Effective organization is evolved, not designed. It aims to create an environment in which successful division of labor and routines not only emerge but also self-adjust in response to environmental changes. - Philip Anderson, The Biology of Business

An organizational culture that supports autonomy and collective decision-making prepares fertile soil for the implementation of self-management methods. And vice versa, if your teams are used to diametrically different models like traditional top-down management, switching to self-management without any previous training can be a risky experiment. 

To build self-managed teams, it will be helpful to provide a new team with some initial guidance. Once team members feel comfortable enough working to a new rhythm, a leader can minimize the level of supervision.

Below you can find some advice on how to build a successful self-managed team:

Pick the right people

Some people are like “glue” and pull a team together and keep it there. - Mike Cohn.

Not everyone is able to work independently. Looking for possible team members, think of highly motivated employees who have strong communication and time-management skills – these people will be the best fit for a self-managed team.

Mike Cohn, the founder of Mountain Goat Software, underlines that who is on the team influences how the entire team will self-organize. He recommends considering the following factors while choosing the people for a self-managed team:

  • Team size
  • Background and experience of individuals
  • Decision-making style
  • Gender
  • Self-motivation 

Choose a team type

Think about which kind of self-managed team you’d like to build – fully autonomous, limited supervision, or temporary.

Explain why self-management is important

Your colleagues must understand what the company can gain from self-management and what unique benefits it can bring for each individual worker.

You should be ready that some people will resist change. Researchers say that the reasons for resistance include fear of the unknown, lack of experience and job security, and a preference for structure.  A clear explanation of the self-management philosophy will reduce resistance.

Give direction

Make sure everyone on the team knows what the project desired outcome is, and what they personally are expected to do. Give the project team just a few goals to start with. Assign roles and define who is in charge of what.

Management establishes enough checkpoints to prevent instability, ambiguity, and tension from turning into chaos. At the same time, management avoids the kind of rigid control that impairs creativity and spontaneity. - Takeuchi & Nonaka, “The New New Product Development Game"

Allocate resources

Provide your team with a budget and other resources they will need to accomplish their project. Let the team determine how exactly they want to spend the resources – with freedom of maneuver, employees will be able to apply resources in the most efficient ways.

Develop decision-making principles

This doesn’t mean designating a leader. Rather, develop a framework that would be used as an algorithm once a decisions needs to be made.

Discuss communication rules

Designate a physical area where team members can gather for meetings. If they work online, you could implement software for them to communicate, in addition to regular instant messengers.     

You should establish a collaborative meeting agenda. It’s important that everyone on the team updates colleagues on their progress and has an opportunity to ask for support.

Also, remember that open communication is impossible without feedback, so make sure feedback is a part of your team culture.

Establish conflict resolution rules

In a traditional team structure, conflicts can always be resolved by a team leader. For example, if you cannot agree on how to shift deadlines, you can ask a leader to step in. However, this wouldn’t work for a self-managed team.

Amit Maimon, SVP of product innovation at ADP, mentions three ways of successful conflict resolution in a self-managing team:   

  1. Encourage openness to productive conflict. Conflicts shouldn’t be seen as obstacles or annoyance triggers – they can be constructive and provide opportunities to learn.
  2. Prioritize accountability over blame. When there occurs an issue, do not look for who is to blame – try to find out why the problem happened in the first place. People who made a mistake can give valuable information, so it makes no sense to discourage them from dialogue.
  3. Quantify the impact of the problem. When a problem in translated into numbers, it becomes clearer how much harm it causes and what needs to be done to reduce the negative impact. For example, if a team member misses a 60-minute meeting, it takes other employees around 30 minutes to recap for him and listen to his feedback. In a month, it’s two hours of wasted time.

Review team performance

Do it on a regular basis, every few weeks or months, to either suggest ways to improve or offer positive feedback.  

Implementing self-managed teams can be a great practice if you apply the right principles. Don’t be radical – see if your organization is ready for such changes. Try to make the transition as painless as possible, approaching it with judgment. This way, you will create conditions for your team to achieve great business results and expand employees' experience at the same time.  

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