Are self-managing organisations for everyone?
Insights from research and 100+ cases of self-managing companies
I used to think that everyone would love to work in a self-managing team. Who wouldn’t want to have more autonomy at work? Who wouldn’t enjoy being more involved in decision-making and shaping the organisation they work for?
What I’ve learned over the last ten years is: self-management isn’t for everyone.
As Bettina Rollow and Joana Breidenbach write in ‘The Future of Work Needs Inner Work’:
“We all develop different strategies to feel safe in our lives and work successfully on this stable basis. Many of us have learned to draw security from structures and rules. This is why new freedoms tend to trigger insecurity and stress in many people. For some, self-organisation is therefore more of a nightmare than the fulfilment of their dreams.”
So who thrives in a self-managing organisation, and who doesn’t? And what does that mean for those of us interested in starting transformation processes towards less hierarchical ways of working?
Voting with their feet
In 2015, Tony Hsieh, chief executive of the online shoe retailer Zappos, announced that the company was moving towards a self-management system called Holacracy. Anyone who wasn’t onboard with the change was given the option of a generous buyout. Within weeks, around 14% of the workforce had taken this offer. By early 2016, the press were gleefully reporting on the ‘mass exodus’ of staff, a number that had by then risen to 18%.
I’ve looked at more than a hundred cases of organisations that have transitioned to self-management, and spoken to a number of practitioners in this field, and it seems to be a common pattern for between 10 and 20% of employees to leave when they discover this new way of working is not for them.
Now, the mainstream media likes to conclude that this is proof self-management doesn’t work. However, I do not see this as a bad thing. It’s understandable that some people will struggle to adjust. The social contract has completely changed! Managers will need to be supported to find new roles and ways of adding value, and some may prefer to stick to what they know and join a more traditional company. Many individual contributors struggle with their newfound authority and decision-making power, preferring the sense of stability and clarity that management hierarchy provided. It’s therefore the right thing – the kind thing, even – to support some people to leave and find a more suitable role.
But are we able to discern the kinds of people who are more inclined to thrive in a self-managing environment? And how can we support those who might struggle more?
Sink or swim
The number of researchers exploring this question is still quite small, and more research needs to be done. However, one study by Michael Y. Lee – a 12-month field experiment with self-managing teams and a control group – had some interesting findings:
“…individuals who had high interest in self-managing, had high job performance, and high psychological safety prior to the experiment were more likely to experience the benefits of the shift to a less hierarchical structure.”
By contrast, those who had low job mastery and low interest in self-managing, actually fared worse – scoring lower in areas like engagement and job satisfaction. In other words, moving to a less hierarchical structure made some people’s work lives and performance better, and some people’s work lives and performance worse.
Having interviewed hundreds of people over the last decade, this matches my own experience of what is happening. For example, my co-author Karin Tenelius and I wrote in our book, Moose Heads on the Table, about a call centre she bought and transformed in 2012. The transformation process proved to be one of the most challenging of her career, largely because she discovered that the employees had lived under a reign of fear with the previous owner and consequently many had low self-esteem and job performance. This meant it took a long time to build a climate of psychological safety and for people to feel confident enough to ‘step in’, which resulted in significant financial problems. Karin learned a lot from that case about the prerequisites needed for a self-management transformation to succeed (more on that later).
So what does this mean?
Well, as Michael concluded in his paper:
“These results reveal the mixed effects that adopting less hierarchical structures can have on individuals and also highlight the human capital and group climate conditions that influence when decentralisation is likely to have a positive effect on employee experience at work.”
Many founders or senior leaders I speak to assume (like I did) that self-management will be universally popular. Surely everyone will dance in the streets when we announce there will be no longer be any bosses! So it comes as a great surprise when they start to experience pushback – some people are sceptical or questioning, some are cynical, some are waiting for it to all blow over. And it can be easy at this stage to hastily draw conclusions or take action too quickly.
This is why I think it’s so valuable for us to know that some people will take to self-management like a duck to water, and others will struggle. Anticipating this means we can be more thoughtful about how we approach a transformation process, and how we support people to navigate the change and make informed decisions based on their needs.
Pulling it all together
There is no foolproof blueprint or recipe for how to transition to a self-managing organisation. We cannot fully know how people are going to respond, or how to support them in advance. The very nature of self-management means every organisation will be different, made up of different human beings with different needs. However, I have discerned some key principles over the last decade that can help us approach a transformation process in a conscious way, and consider how we might respond when we encounter setbacks or resistance.
1. Be honest about what it will take
Don’t pitch self-management as a utopia. In fact, I’d also say don’t pitch self-management as self-management (i.e. a concept). Instead, try to say something about what self-managing teams might give us – more autonomy, pushing authority down closer to where decisions need to be made, speed of innovation, greater collaboration, deeper connection to the bigger purpose of our work; speak to what most resonates with you and your peers.
But back to the utopia point – be clear that this is a process that will need to be co-created. We might have some waypoints in mind, but there’s no map. We have to build it together. One of the most powerful ways to convey this is to have people meet others who have gone through a self-management transformation, as they do in the NER approach when companies take a vote to embark on the journey or not.
Being honest about what it takes also applies to the process of recruiting people into your self-managing organisation once you’ve established it as a way of working. You could even try something like the ‘Scare them away letter’.
2. Check the prerequisites
Especially if you are going to pilot self-management in one or more teams, you probably want to pick a team where you can get some wins and create a bit of buzz about this way of working.
Here’s a non-exhaustive list of some prerequisites. Let’s put it this way: if you don’t have any of these in place, it’s going to be an uphill battle, maybe even an impossible one.
Is there a climate of psychological safety? i.e. trust and openness; people feel able to make mistakes, learn together, ask questions or bring up challenges without fear of the consequences
Is there a good level of collaboration? For example, do people communicate in a straightforward and open manner? Is there a healthy feedback culture? Are they able to process interpersonal tensions?
Is there an interest in working in a self-managed way? Not everyone likes nerding out on books and podcasts, but are people at least curious? Can they see the potential benefits? Are they willing to learn, unlearn and try new things?
Does the team have a clear purpose? Is it clear what the team’s ‘mission’ is, and is that mission shared and ‘owned’ by everyone in the team?
Are the members of the team confident and competent? Do they have relatively high levels of self-esteem, self-awareness, and job performance?
3. Support people along the way (without parenting)
Given that we know people will respond to self-management in different ways, it’s important to consider how we can support each other through this transformation process. In my experience, the key here is to test out some light support structures from the beginning, and keep evaluating together what’s working and not working.
What’s crucial is not to try and rescue people from the ‘growth pain’ they will inevitably experience (i.e. infantilise them). This will undermine the process and create a parent-child dynamic and dependence on someone else to solve tricky problems. And at the same time, we also don’t want to abdicate entirely, letting people suffer needlessly or alone.
I could write a whole book about this point alone, but to share just a few examples of what some aspects of a supportive culture could look like:
Create spaces where people can share their struggles and feel heard and validated – for example, spaces where former managers can share how vulnerable it can be to no longer be the expert or the saviour all the time; or where individual contributors can talk about how scary and exposing it can be to have new levels of responsibility and power. Note: this is not a problem-solving space (nor is it a ‘pass-the-buck’, victim space), but rather it is primarily a listening space.
Give people access to coaches, someone who can play the role of asking coaching questions, providing an outside perspective, and supporting others to find their own solutions. These don’t have to be expensive external coaches, you can have an internal system of volunteers who are interested in developing coaching abilities and perhaps take on coaching as either a primary or additional role. In some cases, someone might need coaching to support them to make a decision about leaving the organisation in favour of a role or environment better suited to them. In other cases, they might just need some time and space to find their way.
Support people to develop the mindset and skillset that will help them thrive in a self-managing team. In addition to learning new structures and processes, it is hugely helpful to have safe (and brave) spaces where you can practise new ways of being and relating, foster greater levels of self-awareness, and get feedback on your blindspots. The kinds of abilities that are useful in a self-managing context include things like: coaching skills (versus defaulting to advice all the time), active listening, processing interpersonal tensions and conflicts, and giving feedback in an adult-to-adult way (versus a top-down way).
4. Don’t kill the experiment prematurely
I’ve come across many examples of founders or leaders going all in with a teal or self-management transformation in their organisations, only to completely change course after six months or a year. The pattern often looks like this: initial excitement about a new experiment —> bumping into some challenges —> organisational success metrics start to go down —> the leadership team and/or the board panic —> the organisation reverts to traditional hierarchy again.
When we encounter resistance or messiness in a transformation process, it’s easy to make conclusions like:
“See, people DO want to be told what to do. Let’s kill the self-management experiment!”, or
“People are fragile babies, we need to help them. Let’s rescue them and create lots of safe structures to protect them.”, or
“These people don’t get it, we should ask them to leave.”
An alternative way to respond is to remind yourself that this is a nonlinear process and that people have a capacity to be with complexity when they are supported to find their own ways forward.
It can be helpful to know some of the common patterns or hazards we might encounter along the way – I wrote about some of them in this post:
And when we inevitably encounter one or more of these hazards, rather than freaking out and killing the experiment – or launching into parental problem-solving mode – we can instead revisit some of the principles in point #3.
I like Margaret Wheatley’s metaphor of a spiderweb. When there is a trouble in a self-organising system, we can find ways to connect the web to more of itself. Who needs to be in dialogue? Who needs to feel heard? Who might have ideas about how to overcome or transform this tension?
By the way, over the last ten years I’ve crowdsourced the average time it takes for an organisation to reach a point where their self-managing structures are somewhat mature and they are starting to see results. Depending on the size of the organisation, the consensus is usually: at least two years. So having patience and the ability to be in a process is key!
Conclusion
So, yes: self-management is not for everyone. And that is totally human and normal! It doesn’t mean we shouldn’t try or give up too soon, and it doesn’t mean we should infantilise people either. It simply means being aware of how diverse and unique human beings are, and making informed decisions together about what would serve this particular group of individuals best.
My hope is that by knowing all of this, we can act with more compassion and consciousness when it comes to embarking on a transformation process.
Related resources:
Michael Y. Lee’s research:
My interview with Mike back in 2019 about some of his early research into less hierarchical ways of organising and leading
The interview with Mike where he talks about who thrives in self-management (and who doesn’t) on the Brave New Work podcast
Mike’s website where you can see an overview of his research papers
My book, Moose Heads on the Table: Stories About Self-Managing Organisations from Sweden, which focuses a lot on the inner shifts needed for new ways of working to, you know, work!
My podcast, Leadermorphosis, where you’ll find nearly a hundred hours of conversations with new ways of working practitioners