We at Contribyte have been trying out a self-managing organization model ever since 2015. Upon becoming the CEO of Contribyte, I desired to shape our company into a form, in which the experts have room to operate as they wish. I also made sure that I would not lose touch with the clients, which is why I work with clients for about half of my time. With these two ideas, we started to build a management model in which the self-managing policy plays a crucial part.

The self-managing model motivates people and helps create things which can not be expected to occur.

Because of self-management, our management model evolves constantly. At the moment, in our 20-person organization, we have no internal titles. Only I have the title CEO. Otherwise our organization is extremely equal and mainly your skills and knowledge determines the value of your voice in decision making. So the people who understand more than others about certain fields, get to make the decisions considering that field and our strategy.

Four years of experience with self-management has brought both positive experiences and negative surprises about the functionality of the model. On one hand the self-managing model motivates people and helps create things one could not expect being created. On the other hand, self-management is surprisingly painful for several people, after all most employees are used to getting told what to do. This does not happen in self-management and that may bother some. Changing stuff around is also more difficult, since you just can not tell people what to do. Instead you have to rationalize or explain the importance of something to change it.

On the grounds of our experience we listed these five tips to get a self-managing organization to go far.

1. Know the reasoning behind your self-management

Management based on processes and hierarchy is definitely a more secure and a faster way to get well known tasks done. The best sides of self-management are found in innovation and in solving complex problems.

It is important to understand that there are several levels of self-management. For example it is much easier to let teams with clear objectives self-manage, than letting larger parts of an organization with multiple competing objectives self-manage.

Uncontrollability brings efficiency to an expert-organization but chaos can get frustrating. Balancing within and between control and chaos demands sensibility and even metrics when possible and appropriate.

2. Ensure a clear vision and goals

Self-management relies on the fact that people and teams find their way towards their goals.

In a process-oriented and hierarchical organization, achievements and progress is measured through processes. In self-management, especially in its extremity, it relies on the fact that people and teams find their way towards their goals.

In self-management, goals, strategy and vision ought to be extremely clear. Everyone has to understand the thought and message behind the goals. Why are the goals and strategies the way they are and how do I confirm that my daily decisions are taking me towards my team, and my organization towards our objectives.

In self-management there are less ways to control the organization than there are in a traditional organization and that is why those few ways of controlling are more important than in the traditional operating model. A self-managing organization is lost without a clear vision, a clear strategy and clear goals.

3. Create clear rules for decision making

An organization that self-manages, requires boundaries. Without any boundaries, self-management would be anarchy. Boundaries define what you can do, what you should do and how cooperation should be ensured.

A good way to define boundaries or rules for decision making is a delegation board. On a delegation board you can have a saying in important matters and specify the level of delegation to these matters.

On Contribyte’s decision making board the levels of delegation are:

1) Everyone decides for themselves

2) Have to ask for advice (you don’t have to follow the advice, but you have to ask for it)

3) A team decides together (the teams are determined by the decision maker)

4) A team decides but asks for management’s opinion on the matter

5) Management decides

On a board we go through practical matters for example credit card purchases, deciding your leaves or holidays, office decorations, making offers to clients and your own workspace. Most of our matters fall into categories 1-3 and basically the only things management decides are the salaries and the changes in salaries.

A decision making board per se is not necessary for self-management but people, who are presumed to self-manage need to know the boundaries in which they can operate. Defining the boundaries gives self-managing people and teams a sense of security and furthermore it makes self-management work better.

4. Make everything transparent

In self-management, transparency creates control

In self-management instead of processes it’s transparency which creates control. When the company’s work is perfectly transparent, a common interest creates a control for different matters. Transparency has to be comprehensive, starting from the company and product area’s successes. This means that transparency has to go both ways, the management has to be as transparent as possible so it can also be assumed from the employees.

In addition to creating control, transparency also creates the sense of peer pressure. On the other hand it also enables better decision making, since it’s possible to know more background information to support your decisions.

Examples of our tools of transparency:

• An always available list of our current and a prediction for the future’s revenue and expenditure. We go through the list weekly but it is available at all times. This ensures that everyone knows where the money is coming from and where it is going to.
• Open credit card bills. We all have our own company credit card. Our control mechanisms are that in our decision making board we have set a purchase limit and in addition all credit card purchases are open to everyone. They are sent to the staff personally once a month but they are also available at all times.
• Open calendars. Many organizations have had open calendars for a long time but we have taken it so far that it is not even possible to hide your work calendar. Our vision is that calendars have to be open so your co-workers can better understand your schedule and understand why you may be busy. Just saying “I’m busy” is not enough for us.

There still are many methods of transparency and transparency could be considered to be more of a value and a part of the organization-culture rather than an isolated way of work. It is a part of transparency to actively want to bring into the open your own knowledge, plans and learnings. To counterbalance this, in an organization you should learn to filter out information so that transparency won’t become a burden on you but a genuine asset.

5. Demand for new kind of management

You can not manage a self-managing organization the same old ways. When the way of management is close to breaking even in a traditional organization, you really need to think about the management style differently in a self-managed organization.

The management transforms more and more towards coaching rather than managing, which requires a lot of trust, showing examples and creating opportunities. A manager is required to have the ability to lead people into the right direction without using too much of their authority. The usage of your authority as a manager eats away self-management and trust. That is why managing a self-managing organization is more showing the way and making an impression on people. These elements of course have somewhat transferred towards the traditional organizations as well. Authority has always been a big asset in management and now in self-management it is practically taken away from you, so managing becomes notably more challenging.

One significant change in the management of a self-managed organization compared to a traditional organization is the interest in the outcome, so called “attention management”. An organization goes towards wherever their attention is pinned to. In attention management, you can pay attention to what the manager wants you to but because of the customer value, your attention should be drawn more towards the results. Because in ways of working, you are given close to full freedom so you should especially pay attention to the results.

Summary – self-management isn’t a silver bullet

Self-management is like other operating models and principles: it has to come from the organization’s starting points.

As it goes for many other organization trends, self-management is often started without even knowing why you are starting it. At best a self-managing model can motivate and create exceptional competitive advantages in return of value. At worst it frustrates the employees as well as the employers and it creates inefficiency and indiscipline inside the organization.

When you are discussing self-management with others, you should always make sure to clarify what type of self-management you are talking about. Self-management inside teams has been a trend ever since the 90’s. But organizational self-management has emerged only in recent years.

Self-management is, like other operating models and principles: it has to come from the organization’s starting points – a model brought from somewhere else also brings goals from somewhere else.