Sky High: How self-organizing teams and a ‘we’ culture set the stage for innovation

Read the full article @ ASQ Quality Progress

Just the Facts

• Self-organizing teams are a way to restructure a workforce and empower employees to make better decisions, become more efficient and devise innovative solutions.
• Adopting a “we” culture focused on teamwork and collective employee engagement goes hand-in-hand with adopting self-organizing teams.
• Before you pilot a self-organizing team that embraces the “we” culture, there are seven deliverables that organizations must consider.

The ability to work in a “we” culture in which self-organizing teams lead is key to becoming agile not only for entrepreneurs but also for individuals working for innovative organizations.

Recently, I visited the headquarters of Zappos in Las Vegas. The online shoe and clothing retailer is an example of a successful “we” company—that is, everybody speaks in terms of “we” instead of “me.” Employees realize that teams are the way to accomplish goals, employees’ ideas really do matter, and self-organization prevails over the chain of command.

Zappos doesn’t designate managers, and everyone focuses on their job at hand—not their title or position. From employees to clients to suppliers, everyone is important.

Does that arrangement look impossible or impractical? It may seem like both, but it’s becoming more and more real at innovative companies. It isn’t easy, but it can be done and can generate great bottom-line results at the same time. The way Zappos CEO Tony Hsieh puts it: “Chase the vision, not the money. The money will end up following you.”¹

The idea of self-organizing teams has been promoted since W. Edwards Deming’s methods were introduced in the 1950s and applied by Japanese companies like Toyota. These teams have been popularized recently by the agile manifesto developed in 2000 and applied to build agile teams in the IT sector. One of the manifesto’s 12 principles is: “The best architectures, requirements and designs emerge from self-organizing teams.”²

The role of agile leaders

Is it true that self-organizing teams have no managers? Well, organizations made up of self-organizing teams have fewer layers between employees and customers because they are organized by teams. There is no clear hierarchy, and no top or bottom. Organizations look more like diamonds than pyramids.

Diamonds are the hardest known naturally occurring material due to their strong bonds. All of a diamond’s faces are connected and each depends on one another to remain strong and brilliant. Diamonds are not brilliant by themselves—it’s the reflection of the light sources they face that shines brightly. Diamonds are just like “we” organizations: They are successful and innovative because each of their employees can shine at their highest potential.

In traditional structures, only managers have the authority to make decisions. In “we” organizations, everyone has the authority to make changes to the company and make decisions about how they perform their work.

In companies with self-organizing teams, leaders may need to “unlearn what it means to be a leader,” as Stephen Denning describes in his book, The Age of Agile,³ because they no longer need to be heroes that solve everything. The leader is more agile. He or she may be just another team member with the role to facilitate or connect the resources. Zappos, for example, calls this type of team member “lead links.”

One of the main changes, however, is that leaders won’t be the only ones making decisions for the team or holding critical information. Leaders will need to let go of micromanaging the day-to-day activities to become successful facilitators and adapt to the role that the specific team requires.

Every employee must be more self-organizing and have access to the same information. Leaders may have to set the long-term vision, promote interaction across the organization, define priorities and help unleash team members’ ideas to develop new leaders within the team. Maybe they will only need to do the reporting. The role of the leader, if there is any, will depend on the needs and maturity of the team.

Read more: 7 tips to kick-off self-organizing teams

To build the first self-organizing team that embraces the “we” culture, leadership must define the main rules of the road—that is, the framework.

First and foremost, the team must have autonomy in terms of how it goes about doing the work.

As part of the implementation plan, the rules of the road must be defined at two different levels: the entire company and the specific project. Of course, the purpose of the project should be aligned with the company’s purpose.

To start, there are seven deliverables (7R’s) the company must define:

1. Reason: Self-organizing teams need a purpose—that is, the reason why they will work for the company and the specific project. Employees no longer just take on tasks as they are so they can engage with the team. They must understand the reasons behind the tasks.
2. Rules: Self-organizing teams must be disciplined to be able to accomplish tasks. They must have clear rules so they can make decisions accordingly. There must be a shared set of values and principles for the company that can be applied to the specific team, or some extra principles can be added case by case. Most companies usually have seven to 12 shared values. Zappos developed 10 core values, and the business is run based on those core values that represent its culture. They hire, evaluate and fire employees based on those values. Brandon Hsiung, product lead at Riot Games, a video game developer in West Los Angeles, CA, keeps it simple when addressing his fellow team members: “Here are our guidelines. As long as you operate within them, you can go crazy; do whatever you believe is best for our players.”¹¹
3. Routines: Setting certain common routines is crucial to start changing habits. Every company has routines. The key now is defined by which routines to keep and which ones must be avoided or changed. For example, some consider meetings to be a common “disease” in the workplace these days. Some leaders spend most of their time attending meetings. Agile teams prefer fewer or shorter meetings, and more emphasis on results-oriented activities.Lots of companies, like Toyota, have daily stand-up meetings. A routine could be having one stand-up, 15-minute meeting when every shift changes to communicate quick updates across shifts. Companies that have turnarounds and outages benefit a lot from this type of meeting. Celebrations, rewards, project planning, hiring and other routine meetings also can be important to translate values into real actions.
4. Roles and responsibilities: As Deming said, “The obligation of any component is to contribute its best to the system.”¹² Each team member needs a clear role and responsibilities for the specific process or project. When I implement 5S, the first step I take is defining clear roles and responsibilities, and space ownership. The entire section is divided into subsections, and each section has specific owners who define the rules of the section (for more details, see the sidebar, “Using 5S as a Starting Point for Cultural Change”). They have full autonomy to make decisions. This helps employees see how they can contribute to their workspace organization.
5. Results and rewards: The “we” culture paradigm promotes a win-win approach to rewards and negotiations. Sharing results and rewards helps employees check how well they are accomplishing the purpose. Creating “results trackers” helps everyone see the team’s gains and keep focused. Some companies also update their compensation systems to reward group rather than individual accomplishments.“They need recognition programs that celebrate contributions immediately. Public recognition is better than confidential,” wrote Darrell Rigby, Jeff Sutherland and Andy Nobel in “Agile at Scale,” which appeared in Harvard Business Review.¹³Some companies also are implementing peer-to-peer rewards. Zappos, for example, lets employees engage and recognize one another. They can award work colleagues Zappos dollars called Zollars, which can be used to purchase logo-identified merchandise from the company store. Every team has a designated person to distribute Zollars. Each month, every employee can give 50 Zollars to someone they think deserves a reward, perhaps for delivering excellent customer service, for example.A furniture company in Houston used another approach to encourage engagement among its employees: The company “put their salesmen on salary, in place of commissions for sales. Result: a steady increase in sales. Older salesmen now help beginners. Salesmen no longer try to steal business from other salesmen. They now help one another. They protect the customer.”¹⁴
6. Risk-taking approach: Traditional teams usually avoid taking risks by moving decision making to the upper levels. On the contrary, “we” culture companies promote pushing decision making to those closest to the problems. “We” are all capable of making decisions in our areas of expertise. This unlocks everyone’s ideas and can generate more innovation. Innovative companies usually take more risks in the pursuit of innovation—testing products that may not work, but also taking actions to mitigate those risks. You can call this smart risk-taking. They may try products in pilot settings, do quick turnarounds and solicit more immediate feedback from customers. Sometimes, being slow is a risk. IDEO’s slogan, for example, is “fail often in order to succeed sooner.”¹⁵ Citing Deming again, we must “drive out fear.”¹⁶ The fear of failure makes people slower in decision making, less creative and less team-oriented. The fear hurts their psychological safety. When implementing 5S, use an action plan. It’s a sheet or table in which employees write down their ideas for improvement in each section, which makes them accountable.
7. Repetition: The last ingredient for forming new habits is repetition. Repeat, repeat and repeat the expected action until it’s second nature. It’s a matter of making discipline a core value. This is the main reason why cultural change can take so long. It requires time to stick to a new habit for just one person, so it can be even harder for various teams. The good news, however, is that habits are contagious. That’s why pilot teams are so crucial. Like in a garden, as Denning writes, “the outcome is less dependent on the initial planting than on consistent maintenance.”¹⁷

Read more “The new era of self-organizing teams”

USING 5S AS A STARTING POINT FOR CULTURAL CHANGE

To help organizations make it easier to see and achieve the 7R deliverables, I use 5S as a starting point. 5S is not just a tool to organize inventory and make the workplace look neat, but it’s a way to achieve cultural change through workplace organization.

1. Reason: The reason to start 5S is to improve workplace organization. Through workplace organization, we show respect to our peers, we can communicate better, and we show respect for our customers and suppliers who may come to visit and see how we work. Respect is the key for a “we” culture, but it is something hard to explain. 5S makes it easy to see and compare across groups, just by seeing how many tools they leave unattended or how clean the machines, desks and meeting rooms are.
2. Rules: To check whether the 5S method is being implemented, I use three rules. Everything must look like brand new, you must be able to find everything in less than 30 seconds and everything must have a home. With these rules, teams understand what must be done, and they don’t need a manager to control that.
3. Routines: Each step of 5S—sort, store, shine, standardize and self-organize—includes a new habit that must be added to the daily routine to implement and maintain 5S.
4. Roles and responsibilities: Every section implementing 5S—and every element like a machine, a desk, a wall or a tool—must have an owner. Everyone must have specific responsibilities defined as part of the standardized step.
5. Results and rewards: To evaluate 5S implementation, I audit every section that is involved in the implementation. Every month, the sections receive a report with a score, and details and photos showing the results of the work. Some organizations provide rewards based on the scores. I recommend providing team rewards instead of individual rewards to reinforce the “we” culture.
6. Risk taking: The 5S action plan is a tool that employees use to provide ideas for improvement for their own sections. There may be ideas from the past that were never tried because the organization’s appetite for risk was low. Through the 5S action plan, they are empowered to participate, to propose, to make changes and to innovate without fear.
7. Repetition: The last S, sustain, is about self-discipline and repeating the habits developed in sort, store, shine and standardize. Without sustain, 5S is just a tool. With sustain, you achieve cultural change.

Call to action

More and more companies are losing knowledge, valuable employees and clients, and many companies don’t know why. The world is changing so fast that the only way to adapt is to make the company more agile—not waiting for decisions to be made strictly at the top, but allowing every single employee to participate in making the company great.

For that to happen, company leaders must start by defining the 7R’s and breaking down the new habits into little parts, incorporating each one into daily routines. Sharing audits, board metrics and surveys will help discover what is working in an organization and keep the organization learning and adjusting in a continuous plan-do-check-act cycle. As Deming would say, “Learning is not compulsory… neither is survival.”¹⁸

Lu Paulise – Coach, book author and speaker

luciana@biztorming.com

@lupaulise

Biztorming Training & Consulting