To get work done, many companies organize employees into self-managing teams that are basically left to run themselves with some guidance from an external leader. In fact, comprehensive surveys report that 79% of companies in the Fortune 1,000 and 81% of manufacturing organizations currently deploy such “empowered,” “self-directed” or “autonomous” teams.1 Because of their widespread use, much research has been devoted to understanding how best to set up self-managing teams to maximize their productivity and effectiveness. Interestingly, though, relatively little attention has been paid to the leaders who must oversee such working groups.
At first, it seems contradictory: Why should a self-managing team require any leadership? After all, doesn’t the group manage itself? In actuality, though, self-managing teams require a specific kind of leadership. Even a team that is autonomous in terms of its activities and decision making must still continually receive direction from higher levels in the organization. And it also must report to that hierarchy through a person who is ultimately held accountable for the group’s performance. Many managers today are expected to fulfill the role of external leader, but most receive conflicting signals regarding how to go about it.2 Should they, for instance, be involved in their team’s decision-making process? If so, how should they participate without detracting from the group’s autonomy?
To investigate such issues, we conducted a study of 300 self-managing teams at a large manufacturing plant of a Fortune 500 corporation. (See “About the Research.”) We investigated both average- and superior-performing external leaders at that site to determine the behaviors that separated one group from the other. Our research has shown that, contrary to common perception, the best external leaders were not necessarily the ones who had adopted a hands-off approach, nor were they simply focused on encouraging team members in various ways.3 Instead, the external leaders who had contributed most to their team’s success excelled at one skill: managing the boundary between the team and the larger organization. That process required specific behaviors that can be grouped into four basic functions: relating, scouting, persuading and empowering. (See “The Work of the External Leader.”) External leaders who excelled at those capabilities were able to drive their teams to superior performance.