SELF-MANAGING TEAMS IN

AGILE PROJECT MANAGEMENT – PAIN OR GAIN?

Eva-Maria MÜLLER

ESC RENNES SCHOOL OF BUSINESS

Abstract

Due to an increasingly dynamic global environment with a high unpredicta-

bility, the classical project management approach in software development
changed. New agile methods were introduced which promise a faster,
cheaper, and better software development with on-time, and on-budget de-
livery of the agreed scope. Core of the agile approach are self-managing
teams, where the team members are empowered to manage their tasks them-
selves. The new form of team organization promises many benefits. Based
on a literature review, the paper provides an insight into the basics of self-
managing teams. It furthermore provides an evaluation of the approach,
considering benefits and limitations. The aim of the paper is to come to a
final judgment, if self-managing teams in agile project management should
be considered as pain or gain.

Key words: Agile Project Management, Self-Managing Teams, Empower-

ment

JEL Classification: M15, M54, O22

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1. Introduction

Business projects nowadays are characterized by a high complexity

due to an increasingly technical sophistication and interdependency across
functions and organizations (Ayas, 1996, p. 136). In order to stay competi-
tive and to satisfy the customers in face of globalization, a change in the
traditional project management approach is required (Roper & Phillips,
2007, p. 33). A team-based organizational structure (Roper & Phillips, 2007,
p. 33) and an information-based approach are possible solutions to increase
project efficiency (Ayas, 1996, p. 136).

Also information system departments need to adapt to an increasing-

ly dynamic and unpredictable global environment (Elmuti, 1997, p. 233).
They are required to “develop, deliver, and support information systems
more responsively, with higher quality” using less human resources (Janz,
1999, p. 171). To meet the needs, it is suggested that software teams self-
organize or self-manage (Moe, et al., 2010, p. 481).

Up to the 1990s the common approach in software departments was

a “plan-driven product line approach” (Anderson, 2004, p. xxvii). It was
highly emphasizing on a standardized methodology that facilitates an in-
creased optimization, control, and prediction of the development process
(Moe, et al., 2010, p. 480). Change came along with a growing customer
dissatisfaction due to long lead times and a loss of quality (Anderson, 2004,
p. xxvii). New methodologies, claiming to enable “faster, cheaper, better
software development with on-time, on-budget delivery of the agreed scope”
emerged, referred to as agile methods (Anderson, 2004, p. xxvii; Chow &
Cao, 2008, p. 961). The term ‘agile’ transports the flexibility and respon-
siveness of the methodology (Moe, et al., 2010, p. 480).

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 In 2001, exponents of different streams of agile methodologies
agreed on some common principles of agile software development, an-
chored in the ‘Manifesto for Agile Software Development’ (Williams, 2012,
p. 72). The manifest states its four central values and contrasts them to the
traditional development approach: (I) “Individuals and interactions over
process and tools”, (II) “working software over comprehensive documenta-
tion”, (III) “Customer collaboration over contract negotiation”, and (IV)
“Responding to change over following a plan” (Agile Manifesto, 2001). In
order to implement these values in agile project management, the work is
autonomously organized and coordinated by self-managing teams (Moe, et
al., 2010, p. 480). Self-managing or self-directed teams are according to
Wellins et al. (1991): “small groups of people empowered to manage them-
selves and their work on a day-to-day basis…members…not only handle
their job responsibilities, but also plan and schedule their work, make pro-
duction related decisions, take action to solve problems and share leader-
ship responsibilities“ (Williams, 1997, p. 219). As a direct result of the
higher involvement and responsibility of the team members in an empow-
ered project team, the effectiveness and quality are increased (Roper & Phil-
lips, 2007, p. 23). Besides this a higher focus on consumer needs can be
attained (Sheffield & Lemétayer, 2013, p. 259). Furthermore the probability
of project success is found to be 20% higher when using agile methods
(Strasser, 2013, p. 39). These examples support the potential benefits of
employee empowerment in self-managing work teams.

This paper wants to provide the foundations of self-managing teams

in agile project management. A critical examination of the literature should
provide an overview of potential benefits (gain) but also downsides and re-
strictions (pain) of the approach. If a company considerers the introduction

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of agile project management and employing self-managing teams, the paper
can serve as a practical support and basis for decision-making.

2. Methodology

The literature contains many findings on self-directing work teams

and employee empowerment. However, they are often focusing on industrial
settings. In the field of agile project management, the topic of self-directed
teams is mentioned but does not seem to be a major issue (Janz, 1999, p.
172). Other contents like the processes and methodology are more present in
the field of agile project management literature.

For the literature review in this paper, general sources on self-

directing work teams as well as specific resources referring to agile project
management have been employed. Besides books and peer-reviewed journal
articles, also some practice oriented conference publications have been con-
sulted.

Based on the literature review, the paper will first address the issue
of how teams in agile project management settings are organized and how
they work. Afterwards findings in literature about the benefits and limita-
tions of the approach will be considered. Finally a conclusion will be drawn
by considering implications of the findings.

3. Teams in agile project management

3.1 Concept of empowered, self-directing teams

In general a team can be described as a small number of people who

pursue and achieve a common objective while each member is contributing
complementary skills (Katzenbach & Smith, 1993; Moe, et al., 2010, p.

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480). As the members have a common purpose and are mutually accounta-
ble, they develop energy and commitment to achieve their defined goals
(Ayas, 1996, p. 132). In a team also the individual performance is promoted,
which in turn enhances the team performance (Moe, et al., 2010, p. 481).
Due to each member´s contributions, a team can have more talent, experi-
ence, diversity and make better decisions than one individual (Roper &
Phillips, 2007, p. 26).

Software development relies highly on the team performance (Moe,

et al., 2010, p. 480). The basic concept of project teams in agile software
development lies in the empowerment of the team (Sheffield & Lemétayer,
2013, p. 469). Due to empowerment, former subordinates get control and
responsibility and are for instance involved in the decision making (Elmuti,
1997, pp. 233-234).

Self-directed teams are according to Wellins et al. (1991): “small

groups of people empowered to manage themselves and their work on a
day-to-day basis”. In order to become self managing, the teams need to be
autonomous, inspired and to see beyond the end of their noses (Imai, et al.,
1985; Ayas, 1996, p. 132).

3.2 Team-structure and team work

Agile project teams are organized as self-managing teams (Moe, et

al., 2010, p. 480). The overall concept of self-managing teams is, that mem-
bers themselves organize and optimize their work (Anderson, 2004, p. 115).
Throughout the working progress members of self-managing teams contrib-
ute a diversity of skills and capabilities (Janz, 1999, p. 172). Due to their

5
empowerment they also carry out managerial functions (Kezsbom, 1993;
Williams, 1997, p. 219).

Managerial functions are for instance the assignment and scheduling

of tasks, choice of work methods, and installation control and monitoring
instances (Janz, 1999, p. 173). They are also preparing their own budgets
and inventory management (Williams, 1997, p. 219). To sum up, Kezsbom
(1994) states that “members…not only handle their job responsibilities, but
also plan and schedule their work, make production related decisions, take
action to solve problems and share leadership responsibilities” (Williams,
1997, p. 219).

To ensure the effectiveness of self-managing teams, teams generally

comprise 2 to 25 members, the majority has an average size of 10 (Roper &
Phillips, 2007, p. 24). Furthermore a right people mix needs to be consid-
ered. Essential skills are members’ expertise in a technology or function,
their skills in problem solving and decision-making, and their interpersonal
skills (Roper & Phillips, 2007, pp. 23-24).

3.3 Team leadership

The concept of empowered teams also leads to a new definition of

the project manager´s role (Williams, 1997, p. 219). The previous responsi-
bilities of a project leader to supervise, schedule and control the tasks are
now carried out by the team (Anderson, 2004, p. 59). However, the demand
for leadership has not disappeared in empowered project teams. The mem-
bers still need an authoritative instance they can contact in case of questions
and difficulties and to which they report (Elmuti, 1997, p. 237). Furthermore
a leader is needed to monitor, supervise and coordinate the project proceed-

6
ings and to report relevant events to the senior management (Anderson,
2004, p. 59; Roper & Phillips, 2007, p. 25).

The focus of leaders of self-managing teams however should be the

design of the team (Ayas, 1996, p. 132). This can be achieved by empower-
ing the members and supporting their learning process (Ayas, 1996, p. 132).
The empowerment can be fostered by facilitating the development of self-
controls (Nauman, et al., 2010, p. 641). To attain the commitment of the
team members, the leaders are advised to define a broad vision on which the
team can focus (Elmuti, 1997, p. 237). Roper and Philips (2007, p. 30) con-
clude that leaders can “help to equip a team with sufficient knowledge and
skills, membership stability, and performance-enhancing norms, [...] train-
ing and resources” in order to enhance the effectiveness of a self-managing
teams.

3.4 Organizational context

An agile project team is not simply formed by declaring a group as

“self-managing” and to expect that its members know how to organize ef-
fectively (Moe, et al., 2010). Instead, it is imperative that the organizational
structures are adapted to the requirements of the new approach (Ayas, 1996,
p. 131). Change has to take place throughout the organization: in their
“practices, values and beliefs” (Elmuti, 1997, p. 236). Obstacles to empow-
erment rooted in the organization are for instance controls through hierarchy
or stage-gate processes (Sheffield & Lemétayer, 2013, p. 460). Therefore
organizations have to be reshaped and become more horizontal (Elmuti,
1997, p. 234). To build heterogeneous self-managing teams the organiza-
tional structure should focus on “formalization, socialization, training, and
decentralization” whereas the management strategies should pursue “com-

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munication, shared values, and trust” (Elmuti, 1997, p. 237). Changing an
organizational structure is a challenging task. When pursuing the idea of
establishing agile project teams, companies have to be aware that the pro-
cess demands time, training and resources until the teams are delivering the
desired results (Elmuti, 1997, p. 233).

4. Evaluation of self-managing teams in agile project management

4.1 Benefits

Self-managing teams are promising various advancements. Roper

and Phillips (2007, p. 24) describe the benefits in three categories: (I) “im-
prove quality of work environment”, (II) “increase overall performance of
the organization”, (III) “provide an environment that focuses on the well-
being of the employees as well as the organization´s performance”.

The impacts of self-managing teams on the work environment (I)

are for instance their ability to provide a good cultural ground for infor-
mation sharing and knowledge creation within an organization (Ayas, 1996,
p. 132). Also the working-conditions are valued more positively (Elmuti,
1997, p. 234). Furthermore the speed and responsiveness to events and
changes can be increased (Nauman, et al., 2010, p. 638). The positive impli-
cations are also sensed by external stakeholders who perceive a better team
performance (Janz, 1999, p. 184).

The overall performance of the organization (II) is increased due

to the fact that employees in self-managing project teams are striving to
produce a high quality product or service, as they are directly responsible
for it (Elmuti, 1997, p. 237). Additionally the overall improved working
conditions lead to an increased “productivity, market share, pricing and

8
cost-reduction” for the organization (Elmuti, 1997, p. 234). The empower-
ment of the team members leads to a higher commitment to the whole or-
ganization, which can also be valued positively (Nauman, et al., 2010, p.
640).

The benefits of the approach that are gained from focusing on the
well-being of employees and on performance (III) are highlighted by
many researchers. The fact that the increased motivation of individuals in
self-managing teams is enhancing the organizational productivity is often
referred to (Elmuti, 1997, p. 233). Due to a higher autonomy, responsibility,
and control, the members of empowered teams are more motivated, their job
satisfaction increases and all these factors lead to a better performance in
their jobs (Janz, 1999, p. 172). The enhancement of the well-being of em-
ployees is reflected in the fact that members of self-managing teams are
more satisfied, have a lower turnover and a lower absent rate (Moe, et al.,
2010, p. 481). The environment also motivates the creativity and entrepre-
neurship of the team members (Williams, 1997, p. 221).

4.2 Limitations

Besides these promising benefits, some critical aspects of empow-

ered self-managing teams are raised in literature (Williams, 1997, p. 220).
For instance a lack of strict scheduling of tasks and holistic planning could
lead to implausible aims (Elmuti, 1997, p. 235) Furthermore the employees
are not experienced in decision making and might lack judgment which
could lead to bad decisions and inefficiencies (Elmuti, 1997, p. 236). Con-
sequently managers are required to have a higher tolerance towards mis-
takes (Thamhain, 1993; Williams, 1997, p. 220). Considering the risk of

9
empowered teams, Williams (1997, p. 220) points out that the effects on
project risk are not adequately represented in literature on empowered pro-
ject teams. Literature would suggest that empowerment reduces risk, which
he opposes by stating that this would not be supported by evidence (Wil-
liams, 1997, p. 220).

More findings reflect on the downsides of empowered teams for the

employees. A central discussion is the relationship between the individual
autonomy and the group level autonomy. Some authors hold, that the high
level of autonomy in the group does not necessarily go along with a high
autonomy on the individual level (Moe, et al., 2010, p. 481). This refers to
the sociological concept of the “iron cage” by Max Weber. It is considered
as a challenge to incorporate autonomy for the individuals and the group in
the same work group (Moe, et al., 2010, p. 481). This is supported by Janz
(1999, p. 172) who holds that the empowerment of a team offers new forms
of autonomies for the members. However, in the same time the individuals
have to adhere to certain norms of the group. If the norms of the group are
higher than the gain of individual autonomy, this is described as a “decrease
in job freedom” (Janz, 1999, p. 172).

Finally the choice of agile team members is crucial, as an unmotivat-

ed employee might have a negative on the whole team (Elmuti, 1997, p.
236). It has to be considered beforehand if an individual wants to be em-
powered, which means an increase of responsibility and workload, and if the
employee is a team player.

5. Conclusion

Considering the findings of this paper, it becomes obvious that the

empowerment of teams in agile project management can be a highly benefi-

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cial approach in project management. Agile project management is adapted
to an increasingly dynamic global environment that is less predictable. It
enables software developers to be more responsive to changes. This flexibil-
ity is very much enabled by the self-managing project teams who autono-
mously organize their work and strongly focus on customer needs. By em-
ploying self-managing work teams especially the quality, performance, and
employee satisfaction can be considered as gains. The highest risk and pain
of self-managing teams can be seen in the negative impact of group auton-
omy on the individual autonomy which can lead to a decrease in personal
job freedom.

In order to profit from the benefits of introducing self-managing pro-

ject teams, it is up to the management to minimize the “pain” by adequately
encountering the risks of the approach. They should for example carefully
select members of an empowered team beforehand and make sure they are
fitting to the approach. To prevent the establishment of too strong group
norms, a leader who is balancing the empowerment and control of the group
has to be installed. If the management is able to address this challenge ade-
quately, self-managing teams in agile project management can be of great
benefit for the whole organization.

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