Vineet Ahuja is a Business Adviser working with AMTIL on the Federal Government’s Entrepreneurs’ Programme. Here he offers some advice on how you can cut costs and save yourself a lot of pain by structuring your growing business with self-managed collaborative teams.

Imagine the scenario:

  • You own a small or medium-sized business. The business is stagnating because you don’t want to stop micromanaging. You have a team who can perform their roles, but you don’t believe you can depend upon anyone. You are mostly working in the business – not on it. As a result the business is not growing or realising its potential.
  • You are in firefighting mode every day. The whole time is spent “managing” people, resources or urgent customer issues, which is frustrating. As a professional running the organisation, you hardly have time for your own projects that could help the organisation.
  • You can grow fast as the market and the product you are in is in a growth phase. However, that growth needs managing and you are short of management resources. You need to hire managers but don’t know who to hire, what skillssets suit your organisation, or who will be the right fit to continue the philosophy and culture you have built.

What do you do?

Now consider this:

  • In every business, there are people who do actual value-adding activities that earn direct revenue – activities that a customer pays for – such as staff on the floor in a factory. They add value by conducting revenue-earning activities in their small areas of operation. These are the value-adding people in any organisation.
  • Only these value-adding people actually add value/revenue in any organisation; all others add cost.
  • These people are generally “managed” by someone – by you as the owner, or by a manager or supervisor – creating a layered hierarchy that creates a cost structure.
  • And yet remember each of those value-adding people manages their own lives outside the workplace. They manage their personal affairs, their home finances, their children and dependants, and grow in their life/status.
  • So is there any reason to believe value-adding people can’t manage their small areas of work? Is it necessary to assign a manager to manage them? Is there a way to let those people who add real value run their own areas of operations without you micromanaging them?

The solution lies in collaborative workplaces where people work and deliver as self-managed teams. To make this happen we need to understand three concepts: responsibility, accountability and authority. Let us define each of these:

  • Responsibility: This is “the ownership of a task”. Being responsible means to deliver a task within the parameters of time, costs and performance, to a level acceptable to all relevant stakeholders. For example, someone operating a machine in a line has responsibility for that machine’s output.
  • Accountability: This is answerability, liability, and the expectation of account-giving to someone over your actions. You may be responsible for a task, but you and your boss are accountable for the overall outcome – for example, the target outcome quantity and quality of the whole line output for the day.
  • Authority: This is defined as the right or power assigned to achieve certain organisational objectives – for example, acceptance of the output quality to release to the customer.

The solution lies in creating teams of people to whom you can give Responsibility, Accountability and Authority. Responsibility without accountability, or accountability without responsibility, or authority without responsibility or accountability are inherently risky – it’s sort of a no-brainer to see that a catastrophe’s coming. The current rash of banking scandals in Australia show this vividly.

Generally, we give value-adding people full responsibility, some accountability and significantly less authority to take decisions, and this leads to the creaton of more layers of management.

So how do you develop teams that you can trust and empower?

  • By creating structured TEAMS with all involved in the line or section, define a goal, with regular, structured team meetings based on rules. Allocate ACTIONS to each member, reviewing the actions in every team meeting. Involvement and support of the owner/senior manager starts a culture that allows people to take responsibility with accountability and authority – to own their roles and make decisions.
  • Create TEAMS with ALL involved in process lines or sections in locations, select TEAM LEADERS (ensure they continue to add value and do not suddenly become bosses), provide TRAINING, IMPROVE THEIR SKILLS, MENTOR them to take decisions with limits (and to escalate decisions when necessary). Communicate daily with TEAM LEADERS. This creates trust and empowerment of the people, who then participate in growing the business.

The Industrial Age is giving way to The Participation Age, where employees participate in decision-making and share ownership of decisions taken to help the organisation grow. Thousands of organisations are discovering this and taking advantage, and techniques are available to assist (see the links below for further reading).

Would you rather create silos in your organisation or create teams that work towards a common goal without people controlling people?

AMTIL is a partner organisation in the Federal Government’s Entrepreneurs’ Programme, focused on helping companies raise their competitiveness and productivity. For more information, please contact Greg Chalker, Corporate Services Manager at AMTIL, on 03 9800 3666 or email