Self-Managed Teams Deep-Dive: A Carya Group Case Study

INTRODUCTION

The Catalyst Leadership Trust (CLT) is a collection of global catalytic executives creating positive change and operating on the cutting edge of trends to do so. One key benefit of being a CLT member is access to one another.

One way we help maximize the impact you can gain from one another is sharing learnings from your unique experiences. From our initial one-on-ones with members and our CLT kickoff meeting, the concept of ‘self-managing teams’ rose to the top as a key area for exploration.

CLT member Patrick Vanbrabandt, CEO of Carya Group, implemented self-managed teams in his company 9 years ago and shared his learnings with us.

Defined

A self-managed team is a small group of employees who take full responsibility for delivering a service or product through peer collaboration without a manager's guidance. (from BetterUp blog)

Self-managed teams have other names such as self-directed teams, self-regulating teams or autonomous teams. Within companies they can have even more specific names such as “circles” at Zappos or “cabals” at Valve. Whatever they are called, these are the basic structures of their organizations, vs departments or divisions.

Self-managed teams are not new (links to histories). However, they are still not common.

While you can find case studies about self-managed teams, and lots of high-level advice, there is very little that details the process over time. This Carya case study gives us access to the intimate details of three major overhauls and many small tweaks, over years of big successes and big failures, with self-managing teams.

Why Would You Implement Self-Managing Teams?

Self-managing teams are a serious commitment for organizations. Research shows that going all in is necessary for success. Therefore, you want to be clear on your purpose before deploying them.

For the Carya Group the purpose was to manage rapid growth.

The Carya Group is a Belgium-based 360° provider of IT-services and products for the automotive business, providing dealerships with customized software solutions and support.

In 2013 Carya was growing quickly. It had acquired its biggest competitor, it had several new clients and many new employees. Something needed to change quickly to ensure that customer service wasn’t disrupted.

As CEO Patrick explained:

After reading the leaked Valve Handbook which advocated for a flat structure, Patrick realized they needed to work completely differently. He wanted to try self-managed teams.

Most case studies of self-managed teams talk about the need to be more responsive to the customer as a primary reason to institute self-managed teams.

In a 2018 article discussing self-managing teams, Oliver Bossert at McKenzie noted: “We’ve argued that autonomy is especially beneficial to teams working on processes and capabilities that directly affect the customer experience. When executives begin to give their small teams more independence, they should look first at teams that are responsible for features that matter greatly to customers.”

Similarly, in its blog, Zappos, one of the most well-known implementers of self-managed teams, posted this:

Evolution 1: All Things Being Equal

On a Friday afternoon all Carya employees were gathered into a meeting room and told them that they were shifting into three equal teams with similar customer goals and capabilities. The only differences between the teams were the individuals assigned to them, and their team colors (Blue Team, Green Team, etc). Carya executives thought that making things be equal would help to not offend anybody.

The response was rapid and unexpected – people were confused, resistant and some began to cry.
People responded emotionally because this was a total shock to them.

They had been working for 5-6 years with the same people, in the same office. They understood how to get work done and what was expected of them.

They were told that when they returned on Monday, pretty much everything that had provided a sense of control and comfort would be gone. They could no longer work with friends and close colleagues. They had no clear framework or purpose. And they felt they had no input or control.

Annelies Van Der Sanden, the Director of Innovation at Carya, explained: “It was really a shock and they didn't know what was happening. They just started crying. Patrick went home and he thought that on Monday he would come back and there would be no one left. It was devastating.”

No one did actually quit that weekend. And customer response time did begin to get faster and teams felt a direct responsibility to their customers in a way that hadn’t happened in a long time:

But it was clear the initial structure could be improved because trying to make everyone and all teams equal was not motivating, and gave no sense of clear purpose as to why individuals were assigned to a particular team. Plans for iterating began quickly. This time, deeply involving the Carya employees.

Key Lessons from Evolution 1

• Involve People: Be sure to involve employees in what you will be doing ahead of time. Get their input. Communicate early and often.

• Clarify Why This Is Being Done: Explain WHY you are doing this. How it is good for the company, and how it can be good for them individually.

• Ensure Teams Have a Clear Purpose: Help employees understand why they are on a certain team, and the purpose of that specific team. Attempting to make all teams equal meant that people didn’t understand why they were grouped together.

• Avoid Announcing Major Decisions on a Friday Afternoon: Plan announcements for a time when people will have time to process and discuss the changes with team members and management. And while Carya knows this, they laugh that they are still making this mistake, “We are still doing it. We changed the teams two times when Patrick was on holiday. That is a joke now.”

Evolution 2: Now We Compete!

Recognizing that trying to make all teams the same wasn’t the right strategy, the next evolution reorganized people into teams that each had a clear purpose - and they were named something fun to represent each purpose.

‘The Giants’ were the team that would cater to customers that were growing larger, like BMW and Daimler. ‘The Bears’ were the team that would support the regular, single location, single brand customers. And ‘the Hunters’ were hunting for new business. (Note: The developers were kept as a centralized team and this has gone back and forth over time)

The executives worked with each team to create a unique purpose and mission statement.

At first this formation seemed to work well. Motivation quickly returned. Customer needs were being met.

And then…the teams became hyper competitive with one another, losing sight that they were all still on the Carya team:

One day the Bears hacked the screens that were placed around the office with images of bears. Then the Hunters began talking about how hunters kill bears, and they hacked the screens with their own images that afternoon.

It was clear something needed to change to bring the focus back to the customer.

Key Lessons from Evolution 2

• Be Sure the Structure Keeps Everyone Under the Same Banner: While the executive team did a great job of instilling a sense of purpose, this formation led to more focus on competition than cooperation. Employees connected more to their team identities than they did to their customers or to Carya holistically.

Evolution 3: Let’s Get Back to Customer Experience

The executive team recognized it was necessary to reconnect everyone to the primary reason they created self-managed teams – to improve customer experience.

Patrick began instilling the mindset that whatever problem a customer experienced, it was Carya’s problem to address.

They began to hold weekly sessions where they would invite customers who had become upset at their experience. The whole company would gather to listen to the customers and co-create with them. And this began to have a positive impact.

The next step was to re-organize the team structure to continue this momentum.

Patrick gathered a small group and they locked themselves up in a hotel for a week. They designed and mapped the customer experience problems. Then they visioned how to deliver a great customer experience.

The new structure had multiple updates. First, the teams were reorganized around customers directly, for example ‘the BMW team’.

Next, the teams were given a framework to work within. When the setup was simply ‘teams, customers, go!’ there was a lot of variation in how the teams worked, which was part of the competitive spirit. A ‘Team Operating System’ was introduced which included a set of meeting structures and tools that all teams needed to adhere to. This helped everyone be clear on what is expected from them, know how the team can function well together, know what everyone is doing and have a place to express and connect with how everyone is feeling. The ’Team Operating System’ included:

These shifts allowed for clear purpose, a customer focus, and continuity team-to-team which created a clear connection to Carya as their ultimate identity. At first there was a lot of resistance to the Team Operating System. Yet after 3 years of using it, it has had a big positive impact and all the teams are now working the same way. Plus this framework allows Carya to quickly integrate new teams, or even new external offices.

This is still the structure that exists today at Carya. However, regular iteration continues.

One area of iteration has been with team coaches. At first the role of team coaches was not defined. There were coaches that became a great help to their teams and others who didn’t appear to do anything. Now clear expectations have been created for team coaches, and there is a monthly meeting where coaches share issues or best practices, to support the learning and iteration process.

Key Lessons from Evolution 3

• Build in Ways to Keep the Customer a Central Focus: If a key reason for implementing self-managed teams is allowing more customer focus, be sure to build in ways to keep all employees close to customers. Rather than making hearing from customers the job of each team, Carya’s executive management helped oversee regular ways to bring the customer voice into the company.

• Make Iteration a Constant Part of the Process: While iteration happened in big, sweeping overhauls early on for Carya’s self-managed teams, as leadership gained clarity and experience they adopted regular retros and coach meetings to involve everyone in constantly optimizing structures to support customer and employee experience.

• Give Teams a Framework They Work In: While there are many things that teams need to be able to control locally, there are some things that can be standardized across the company. The standardized ‘Team Operating System’ has also been helpful as a way to introduce new employees to how self-managed teams function.

• Invest in Tools: Find the right tools to support the needs and functioning of teams. For Carya, tools that supported accountability and communication have been the most helpful.

• Assign Team Coaches: Having someone responsible to setup the meetings and secure the resources for the team ensures that those things get done across all teams.

• Do Not Make Decisions Based on Who is Friends with Whom: There used to be heated discussions at Carya about which employees could not work with other employees. However, now they have learned that they have to make hard decisions that prioritize the needs of the customers. The ‘Team Operating System’ also reduced friction between employees considerably, making this lesson easier to adhere to.

Summary of Lessons

Here is the combined list of lessons listed above:

1. Involve People

2. Clarify Why This Is Being Done

3. Ensure Teams Have a Clear Purpose

4. Avoid Announcing Major Decisions on a Friday Afternoon

5. Build in Ways to Keep the Customer a Central Focus

6. Make Iteration a Constant Part of the Process

7. Give Teams a Framework They Work In

8. Invest in Tools

9. Assign Team Coaches

10. Do Not Make Decisions Based on Who is Friends with Whom

Additional Lessons

In addition to these lessons learned evolution by evolution, there are a set of learnings that have emerged for Carya across the evolutions that have informed their iterations.

Leadership Needs to Watch the Teams Closely – All the Time

If you plan to experiment with self-managed teams, it is important to be prepared for iteration from the start. With each change, there are often unintended consequences. It is critical to have someone watching the teams closely, paying attention to the employee and customer experience and be ready to evolve when things are not working.

It is a common fallacy that self-managed teams eliminate the need for senior management. Case study research published in the Ivey Business Journal showed that successful self-managing teams shared three attributes: “organization-wide commitment to using autonomous teams, upfront and unwavering commitment to allocating organizational resources for team use and frequent, face-to-face feedback from organizational leaders.” Similarly, unsuccessful teams “blamed weak support from management for their failure.” A key conclusion of the research is that “organization-wide commitment to autonomous teams is one of the most powerful factors behind team success. In particular, top administrators can create an environment conducive to successful autonomous teams by fostering team orientation, building employee desire to participate on autonomous teams and optimizing appropriate levels of autonomy.”

The need for leadership engagement is echoed in the McKinsey article on self-managed teams: “executives still must ensure that teams operate with proper governance, that company resources are aligned in pursuit of strategic priorities, and that midlevel managers get the coaching they need to become better versed in agile ways of working.”

It helped at Carya that Patrick had total authority to make changes: “I have total authority. It's a huge advantage if the leadership is the decision maker.” While Patrick has two partners in the business they trust him to guide the structures and restructures. (Note, however, one of the partners, still struggles to define his place and value to the company in a self-managed team world. While executive oversight is necessary, so might be redefinition of executive and other leadership roles. This MIT Sloan Management Review gives tips for how to be a leader in self-managed teams.)

In a Medium article about failures of self-managed teams Vladimir Oane explained that Github struggled with the model due to lack of coordination and direction, “as the company grew employees didn’t know who to direct their questions to, neither with regard to uncomfortable confrontations with colleagues nor concerning their own performance.” Having no central decision-maker created problems and swirl.

The Culture of the Company Has to Support Self-Managing Teams

Carya Chief People Officer, Evelyn, explains that there is a certain type of person that works best in self-managed teams: “People who take responsibility, who take initiative, who are self-steering and don’t need a boss to tell them what to do.”

The Ivey Business Journal case study confirms the need for a culture that supports self-managing teams: “In order for autonomous teams to be effective an entrepreneurial tone within the organization must also be cultivated.”

These days Evelyn is more intentional to look for those traits when hiring, however, Carya didn’t begin hiring people like that because they implemented self-managing teams. Rather self-managing teams fit because people like that were the foundation of the existing Carya culture.

It is important to assess if your organization already has the right culture to support self-managed teams, or if you will need to build toward the right culture to support their long-term success.

Workload Imbalances Occur

Within the teams at Carya, there are people that say ‘yes’ to everything, and others who get less involved and don’t pick up extra work. This is visible in the teams’ OKRs.

Performance Management is Tricky in Self-Managing Teams

Related to the lesson above, Carya Chief People Officer, Evelyn, explains that performance management is difficult with self-managed teams because teammates are reluctant to call out their peers and there is no one overseeing individual performance on a day-to-day basis.

Building toward a feedback culture and adding agile performance review processes are going to be one of their next iterations.

Expect Resistance

Even as they moved to include employees in the process of creating, implementing and iterating self-managed teams, Patrick and Evelyn shared that there was resistance to changes, each time. The bright side is that people are getting more used to change at Carya so the resistance has become less strong.

“Now for people in the company for several years they are used to it. So when we do the change they are used to it. They know ‘now I am in this team and maybe tomorrow it could be different.’”

– Evelyn, CPO

It’s More Than Self-Managed Teams: It’s A Mindset

Patrick shared that leadership is not only proud of their learnings with self-managed teams and instituting a Catalyst Program, but with the mindset shift that has accompanied those investments: “We have not only helped our colleagues get used to change, but even embrace change.” This is allowing Patrick to bring to life a longtime motto: “Wrapping VUCA like a warm blanket around me....”