What does it really mean to be self-organizing and self-managed in a Scrum Team and why is that important?

Strictly speaking, a self-organizing system is one where the complexity of the system increases without being guided or managed by an outside source. Usually emergent properties can be observed.
The emergent property is a pattern that arises out of simple interactions within the system.
Self-organization spawns into several different concepts for different areas of knowledge. You can talk about it in Math, Chemistry, Linguistics or in Human Society.
Scrum is inserted in a subset of the self-organization principle within the Human context. The idea of not influencing the Team and allowing it to self-organize is based on the notion that emergent properties for the Team can improve the probability of success in a project.
In Scrum, avoiding external influences creates room for creativity and synergistic behavior. At the same time, periodic feedback influences the Team in the direction of the Product Owner’s vision, and both are the basis for a more flexible response to the difficulties presented in a project.

Increased chance of success by the use of Scrum

Increased chance of success by the use of Scrum

The concept of self-management in Scrum comes directly from the social context in work related matters. Worker councils, worker co-operatives, participatory economics and many other human work situations where the presence of a boss is lessened or dismissed entirely relates strongly to the origin of the concept in Scrum.

It seems to me that the founders of the Agile movement and of Scrum were much more capable and knowledgeable than their managers in the many projects they were involved in. This frustration led to studies on many aspects of group dynamics, and many of those principles were incorporated to the basis of these frameworks.

In software, it is not uncommon that the manager knows less about building software than the team members. Almost always the manager knows less about it than the collectiveness of the group.
The Team knows how to build software, and the manager does not. So, when establishing a command and control process within these conditions, the manager will undoubtly get in the way of the success of the project.
Under this line of thought, self-management becomes an obvious choice because you allow people who know how to do the job go on and do it. There is also the bonus that you might get synergy and emergent behavior.

Scrum does not propose a strict sense of self-organization or self-management. The Team is governed by rules that serve an external purpose. They have to follow the Scrum rules, they have to generate value to the client and they have regular feedback.
The Scrum team has a manager. The ScrumMaster is a manager with authority to enforce policy. The ScrumMaster enforces the continuous feedback process and the proper use of Scrum. The ScrumMaster enforces adherent behavior to the “company’s culture” and is a constant checker of the accomplishment of the DoD.
The ScrumMaster should not impose, however, on the “software building” part of the management because he is not the one with the knowledge on how to do it.
The team is self-managed to build the software, not to do whatever they want.

Also, it must be clear that self-management in Scrum does not imply democracy, or voting, or any other particular form of collaboration within a team. The whole of the group dynamics area of studies should be explored to the advantage of the project.
In my ScrumMaster Certification, Ken Schwaber illustrated how the time ticking and the Sprint deadline were strong factors for deciding conflict, and there was no suggestion on voting or a specific form of conflict resolution. In that particular exercise, the decision was made by the one who said it first (like children calling it first).
What was emphasized was the importance of transparency and broadband communication at all times.

Anakin Skywalker: “Doing what the Jedi Council says, that’s one thing. How we go about doing it, that’s another. That’s what I’m trying to teach you, my young Padawan.” – “Star Wars: The Clone Wars” (2008)

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