How to Lead a Self-Managing Team

To get work done, many companies organize employees into self-managing teams that are basically left to run themselves with some guidance from an external leader. In fact, comprehensive surveys report that 79% of companies in the Fortune 1,000 and 81% of manufacturing organizations currently deploy such “empowered,” “self-directed” or “autonomous” teams.1 Because of their widespread use, much research has been devoted to understanding how best to set up self-managing teams to maximize their productivity and effectiveness. Interestingly, though, relatively little attention has been paid to the leaders who must oversee such working groups.

At first, it seems contradictory: Why should a self-managing team require any leadership? After all, doesn’t the group manage itself? In actuality, though, self-managing teams require a specific kind of leadership. Even a team that is autonomous in terms of its activities and decision making must still continually receive direction from higher levels in the organization. And it also must report to that hierarchy through a person who is ultimately held accountable for the group’s performance. Many managers today are expected to fulfill the role of external leader, but most receive conflicting signals regarding how to go about it.2 Should they, for instance, be involved in their team’s decision-making process? If so, how should they participate without detracting from the group’s autonomy?

To investigate such issues, we conducted a study of 300 self-managing teams at a large manufacturing plant of a Fortune 500 corporation. (See “About the Research.”) We investigated both average- and superior-performing external leaders at that site to determine the behaviors that separated one group from the other. Our research has shown that, contrary to common perception, the best external leaders were not necessarily the ones who had adopted a hands-off approach, nor were they simply focused on encouraging team members in various ways.3 Instead, the external leaders who had contributed most to their team’s success excelled at one skill: managing the boundary between the team and the larger organization. That process required specific behaviors that can be grouped into four basic functions: relating, scouting, persuading and empowering. (See “The Work of the External Leader.”) External leaders who excelled at those capabilities were able to drive their teams to superior performance.

Managing in No-Man’s Land

As recently as the 1960s, self-managing teams were practically unheard of. Indeed, an early experiment by General Foods Corp. to deploy self-managing teams on its Gaines dog-food production line more than 30 years ago was something of a sensation. Even, the company’s own senior management expected the project to fail.4 Since then, self-managing teams have become an increasingly popular way for companies to get work done. Even so, the role of the people in charge of those groups has remained somewhat of a mystery.

To be sure, leading a team that needs to manage itself is inherently tricky. The role is highly ambiguous by nature (and, on the face of it, oxymoronic). In general, self-managing teams tend to have well-defined job functions and are responsible for monitoring and managing their own performance. Instead of managers telling them what to do, these teams gather and synthesize information, make important decisions, and take collective responsibility for meeting their goals. What’s left for the external leader to do? As one of the external leaders in our study remarked, “Maybe we’re not needed, you know?”

But the reality is that the buck stops at the external leaders. Specifically, companies hold them responsible for their team’s performance. If the quality or productivity of a team is substandard, its external leader is taken to task. As another team leader in our study noted, “The hardest part is that I’m also held accountable. If they make the wrong decision, it still comes back on me.” In essence, the job of external leader exists squarely in the middle of a managerial no-man’s land.

Back in 1977, a field study published about that early experiment at General Foods revealed external leaders caught in the middle: Their teams criticized them for being too controlling, while their own managers complained that they were being too lax.5 Not long after, another research study looked at teams in other organizational settings and found that those three constituencies — team members, external leaders and their upper- level managers — all had different ideas about the role.6

Unfortunately, that lack of consensus generally remains today. Prior to and since our study, we have found confusion about the external-leader role in other companies and at all organizational levels. Consider the senior executive of a large Midwestern bank who desperately wanted to empower his team of high-level bank executives but was unsure how to go about that. When he attended meetings, he felt team members relied too heavily on his opinion, but when he stopped going to meetings, he felt stuck in an information black hole. Even with his many years of experience, he really did not know how to manage that group.

The problem is that a self-managing team requires leadership of a very different sort. Researchers agree that the external-leader role is more complex than the traditional manager role.7 This is true partly because the typical external leader is in charge of several self-managing teams at any one time. (In our study, they were responsible for as many as eight.)

More importantly, the external leader absolutely must avoid any heavy-handed attempts at managing. Case studies have shown that external leaders who struggle with their role usually end up exerting too much control, which then undermines the self-managing team’s ability to get work done.8 Because of that and other issues, various researchers have labeled external leaders as the most common impediment to the success of self-managing teams.9

Confusion about the role of the external leader might be tolerable if that function weren’t so crucial, but a variety of studies have shown that the success of a self-managing team greatly depends on its external leader.10 A newly created group, for example, often needs both effective coaching and a champion who can represent its decisions to other executives in the organization. Teams also depend on external leaders for help in acquiring resources. That’s why it’s common to see an underperforming team successfully turn itself around with only the change of its external leader — or to see a once-great team suffer after its external leader departs.

Four Functions, 11 Behaviors

Although the essence of a self-managing team is autonomy, the quality of its link to the organization is pivotal to success. Some external leaders perform that role much better than others, with the superior ones tending to excel at relating, scouting, persuading and empowering. Each function requires specific behaviors, of which there are a total of 11. In the exhibit “The Work of the External Leader,” the relating activities are shown at the beginning of the process because, without the formation of those relationships, external leaders will find scouting difficult. Scouting, in turn, equips external leaders with the information they need to persuade. And various aspects of scouting and persuading help pave the way for greater empowerment of a team, which then contributes to the group’s ultimate effectiveness.

The well-known key to making self-managing teams work is to delegate considerable authority to the group, granting it tremendous flexibility in making its own decisions.11 What is less well-known are the kinds of leadership activities and behaviors that are needed to build the foundation for team empowerment. Relating, scouting and persuading are those critical building blocks.

Relating

External leaders must continually move back and forth between the team and the broader organization to build relationships. Success in this area requires three behaviors: being socially and politically aware, building team trust and caring for team members.

Being socially and politically aware.

During our research study, we heard stories of both team triumphs and irritations. In one case, an external leader recounted the time he allowed one of his teams a freedom that was inconsistent with the company’s informal policies. Later, he was taken aback by the backlash he experienced from his peers in the organization. Recalls the leader, “This person sends a note to my manager, to his manager and to my colleagues … saying, ‘Since when did this policy change?’” The leader was also vehemently attacked by another team leader for his “ineffective supervision.”

What happened? Clearly, the incident suggests a lack of political awareness: The leader simply didn’t anticipate the impact of his decision on others. Nor did he perceive the need to build a broader consensus. Incidentally, in our study the performance of that leader had been categorized as average. By contrast, the superior external leaders had consistently demonstrated an understanding of the broader organization, including the individual concerns and decision-making criteria of important constituencies, such as the engineering and human resources groups. As one superior leader bluntly put it, “I’ve got a good rapport with all those groups, and most things I ask for get done. … You can get moved to the top of the list for things in a hurry if you’re not [upsetting] people.”

Building team trust.

Superior external leaders also consistently recognized the value of building good relationships with their teams, even to the point of achieving insider status. Given that the leaders had little time to spend with any one team, such acceptance was far from automatic. In fact, one leader in our study was impeached by her team members, who did not trust that she had their best interests in mind. Contrast that with the experience of another leader who, when his team complained of problems with new equipment, said, “Whatever it costs, if you guys aren’t happy with it, we’ll get another system in here … because you’re the ones who are gonna have to work with it.” The team was incredulous. One member pointed out that the new system had cost $23,000 to install.

Caring for team members.

In our study, average leaders were more likely to see the personal problems of the team members as impediments to getting work done, whereas superior leaders more often recognized them as opportunities to build relationships. One superior leader described an incident in which one of his employees had a problem with her disability leave. The leader took it upon himself to call the insurance department in the health center to clear the dispute, which had been an ongoing source of worry for the worker. “It was … instant relief for that person,” recalls the leader. “It was not a big problem, but it was big to her.”

Scouting

To scout effectively, external leaders must demonstrate three behaviors: seeking information from managers, peers and specialists; diagnosing member behavior; and investigating problems systematically.

Seeking information from managers, peers and specialists.

Superior leaders appeared to be significantly more likely to seek information from others in the organization, whether as advice or simply in response to technical questions from the team. Sometimes the leaders used that information to influence team decision making, especially when they wanted to persuade people to take into account broader organizational considerations. For example, when a team wanted to hire a colleague who had filled in for absent members in the past, the group’s external leader wisely decided to step in. The leader wanted his team members to be able to make their own choice, but he also sensed that their lack of knowledge and respect for a new hiring policy at the company could create problems with management. “I could tell this was going to be a sticky situation,” he recalls, because the new policy was more formal and favored candidates with greater seniority. So the leader talked to HR as well as other external leaders as to how they filled their jobs. He then informed his boss about the situation and invited him to the team’s next meeting. At the meeting, the team members were able to persuade the external leader’s boss to delay implementing the new policy so that they could hire the person they wanted. By seeking and relaying all the pertinent information, the leader was able to enable his team to make its own decision (without disrupting the organization), which helped boost the team’s morale.

Not surprisingly, external leaders who routinely sought information from the broader organization were able to advocate more effectively for their teams. They were able to help their teams gain valuable political awareness and build social capital for them — all of which would often pay off in less obvious, but no less important, ways. The team members themselves realized the importance of having an external leader who could get information faster than they could, had access to data they didn’t have and could easily make contact with upper management. On the other hand, when team members felt that an external leader was not keeping them adequately informed, they tended to develop an “us against them” attitude. As one such member put it, “[They] don’t want to give up information; it’s their power.”

Diagnosing member behavior.

Because external leaders are typically responsible for the performance of several teams, they are rarely on the scene when something critical occurs within a specific group. As a result, they must often gain insight after the fact. To do so, they frequently need to add to their incomplete information by analyzing and making sense of verbal and non-verbal cues from team members. One leader described an episode when his team had done months of benchmarking research to suggest a policy change to the directors of the organization. But the directors quickly shot down the proposal and instead told the team members that their time might be better spent improving their quality and productivity. When the leader heard the news he had mixed emotions. He was upset because he knew how much time his team had spent on the proposal, yet he also knew he had to support the directors’ decision because, after all, he was part of management. So he went to the team members and started to give them a pep talk but quickly stopped himself. “I could tell they thought I was full of you-know-what. You could see it in their eyes,” he recalls. So, he instead offered people a sympathetic ear and acknowledged their well-intentioned efforts.

Interestingly, both the superior and the average leaders in our study talked about the need to read their team members accurately. In fact, it was the leadership capability they most commonly identified as important.

Investigating problems systematically.

When superior leaders got wind of a potential problem, they were significantly more likely to deploy an inquisitive and systematic approach to investigate the matter. They would begin by asking the team members myriad questions to collect data and identify the issues, after which they might visit an external constituent to collect additional information. “You’ve got to be down on the floor,” one superior leader asserted. “When the line is down, I’m over there within a minute.” By collecting firsthand information from the team members, superior leaders were able to fully understand their group’s perspective, enabling them to make informed recommendations that would be acceptable to their teams as well as to external constituents. In contrast, average leaders were more likely to attempt problem solving with less data or input from the team members.

Persuading

With respect to external leadership, effective persuasion requires two behaviors: obtaining external support and influencing the team.

Obtaining external support.

Teams often need support from the broader organization, and superior leaders are able to perform this advocacy role more effectively. One such leader remembered a time when his team members were having equipment problems. After talking with them, he used their ideas to sketch a new piece of machinery and came in during other shifts to gain additional input from other teams. He was then able to obtain management’s authorization to build the new piece of equipment. In our study, team members agreed that leaders were most helpful when they were able to get the attention of important external constituents. Average leaders seemed to seek such external support less frequently, and when they did they were less successful in obtaining it. One average leader remembered an incident when he pleaded with the scheduling department to make a change for one of his teams. But because he had not built relationships with that department and had not expended the effort to obtain the information necessary to support his case, his request was denied.

Influencing the team.

Effective external leaders were also adept at swaying their teams to decisions that best met the needs of the organization. Keep in mind that prior to doing so, these superior leaders had already established trust with their teams, had systematically investigated the problem at hand and had used their external contacts to obtain all necessary information. One superior leader, for example, collected statistics from the accounting department to persuade his struggling team to think of ways to improve its productivity. Using that data, the leader impressed upon his team how much the company lost in profits every minute a manufacturing line was down. “This is the money that we didn’t make,” the leader told the team. “If somebody is cutting the line off just to eat a sandwich, it is costing everybody.” Three months later, the group’s performance had improved markedly, and whenever the team was about to fall behind schedule, people would work a little longer to stay on track. Interestingly, those team members were going the extra distance without their leader having to ask (let alone demand) that they do so.

Empowering

External leaders of self-managing teams can empower those teams by demonstrating three behaviors: delegating authority, exercising flexibility regarding team decisions and coaching.

Delegating authority.

External leaders typically have great discretion over the amount and type of authority that they delegate. In general, the superior leaders tended to empower their teams with more responsibility. For example, when one team was told by management that it had to move its assembly line, its leader left it up to the team to work out the details. “They very much had ownership,” remembers the leader. “They knew what we needed to do and took it from there. This needed to be their baby.” However, average leaders tended to be more fearful about delegating authority, and they would often make decisions for the team and solve its problems covertly. It is important to note that the average leaders’ reluctance to delegate authority was not because they were leading the poorer-performing teams. In fact, many of the superior leaders in our study had been transferred to a problem team and had worked with it until they felt comfortable delegating authority. Eventually, as the team gained more and more ownership, its performance improved.

Exercising flexibility regarding team decisions.

Sometimes a team proposes something that is outlandish or that appears to reflect poorly on its leader. In such situations, average leaders were likely to express their reservations, whereas superior leaders frequently replied with comments such as, “It’s not what I think; it’s what you think.” One of the teams in our study, for example, wanted to present its quarterly performance results at the department meeting by performing a skit. At first, the team’s leader was a little hesitant because nothing like that had been done before and the meeting would be attended by all of the managers in the organization. “I thought, ‘Oh, we could look so foolish on this,’ ” she recalls. But she gave the team her approval and, as it turned out, the skit went over well, which boosted the team’s sense of cohesion and identity. Of course, teams don’t always make good decisions, and a major responsibility of external leaders is to prevent serious mistakes. But even when a team has to be reined in, superior leaders did so only after considering the proposal as open-mindedly as possible.

Coaching.

Coaching involves a number of activities, including working one-on-one with employees, giving feedback to the team and demonstrating certain behaviors (such as effective meeting facilitation) for others to model. Past research has found that superior leaders tend to be active in educating and coaching others,12 and our study confirmed that. In particular, superior leaders focused on strengthening a team’s confidence, its ability to manage itself and its contributions from individual members. A common coaching behavior was for leaders to work with people who had just taken on roles of greater responsibility. For example, after a meeting in which people argued for 20 minutes about coffee, one superior leader helped the team member in charge to run more efficient meetings, first by developing an agenda and then by keeping the group focused on that agenda.

Self-Management in the Long Run

For external leaders to relate, scout, persuade and empower, they must frequently — but quietly — cross the boundary between the team and the broader organization. The idea that a leader must manage this boundary is certainly not new; past research has linked it to the effectiveness of traditionally managed teams,13 and several studies of empowered teams have proposed that it is the central focus of the external leader’s role.14 Our own research supports those findings. Specifically, the superior leaders in our study were able to develop strong relationships both inside the team and across the organization. In contrast, average performers tended to relate well to the team or to those in the broader organization, but not to both.

The four functions — relating, scouting, persuading and empowering — are important for the leader of any group but particularly so for those in charge of self-managing teams. (After all, if a team has not been empowered, how can it manage itself?) And the same process would be useful for leaders of geographically dispersed teams, given their similar challenge of having to rely on imperfect information to influence behavior from a remote location.

An important thing to remember about team autonomy is that self-management is not an either-or condition. Instead, it’s a continuum, and external leaders should also be constantly guiding and developing their teams so that they become increasingly independent. In fact, the ultimate goal of the external leader should be the delegation of all 11 of the behaviors described. For example, external leaders should be developing their teams’ relationships with relevant individuals and other groups in the broader organization, eventually relinquishing that primary activity to the teams themselves. And when teams do become less dependent on their external leaders, the leaders will theoretically be freer to assume the responsibility for an even larger number of groups.

The teams in our study had made the transition to self-management five years before our research commenced. At that time, the superior participants were already performing the 11 essential behaviors of external leadership. We would not be surprised to learn today that those individuals have since moved their teams further along the continuum of increased autonomy and independence. In fact, we would be greatly surprised if that were not the case.