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Is there too much autonomy? Some companies assign tasks in a rigid way, but it is becoming more popular to allow employees to decide what they work on and who they work with. Companies such as Spotify, GitHub, and Google have publicized their policies allowing employees to self-select the projects and teams they work with, arguing that by spurring higher levels of ownership and creativity, this strategy leads to better, more innovative ideas.
This may seem intuitive, but our research shows that it is possible to take too much freedom. We conducted a field experiment with more than 900 students in an 11 week undergraduate course on lean startup entrepreneurship, in which students were grouped into three-person teams and tasked with developing a startup idea and pitch deck. We randomly assigned students to one of four conditions, varying whether or not they had the freedom to work on their own ideas and the composition of their teams. Students were told what idea to pursue in the first group. The students were assigned an idea to work on in the second group. Students were given the freedom to choose their own idea in the third group. Students were allowed to choose their teammates and their ideas in the final group.
A panel of practitioners, including entrepreneurs, angel investors, and venture capitalists, evaluated the pitch decks produced by the teams. The judges were not allowed to communicate with each other before they submitted their responses, and each pitch deck received three independent evaluations. The judges were asked to assess the pitch decks performance in five areas: novelty, feasibility, market potential, likelihood of success, and likelihood of inviting the team to a follow-up meeting. The judges were asked to allocate a fictional investment budget of $1 million across all the projects they evaluated after the pitch decks had been individually scored.
What did we find? Our analysis suggested that some autonomy yielded the best results. The teams that weren't allowed to choose either their ideas or their teammates performed the worst, but those with full autonomy performed only marginally better.
The teams that were given some freedom were more likely to succeed than the teams with no freedom. They received more of the fictional investment budget than those with no autonomy and more of the budget than those with full autonomy. The teams that were the top performers were those who were assigned their teammates but allowed to choose their own teams, closely followed by those who were assigned ideas and allowed to choose their own teams.
Why would this be? The main factor driving these effects was that the teams with some autonomy were best able to match ideas to team members. Teams with assigned teammates and autonomy over ideas could choose teammates who were best suited to work on the idea, while teams with assigned ideas and autonomy over membership could choose teammates who were best suited to work on the idea. It was difficult to match teams and ideas effectively when both were up for discussion, because teams without autonomy over their membership or ideas had no way to do this.
Getting to choose both their teams and ideas fueled overconfidence is known to negatively impact performance. We asked the teams to describe how they performed compared to the reference group, and we found that the teams with total autonomy were the most likely to overstate their abilities.
We found that the more autonomy the students had, the happier they reported being. The teams that got to choose their own ideas were happier with their ideas, the teams that got to choose their members were happier with their groups, and the teams that got to choose both were happier with their groups. We found that the happiest student-entrepreneurs did not come up with the highest-performing pitch decks despite extensive literature about the connection between positive emotions and higher performance.
There are Takeaways for the workplace.
There is a big difference between students in an entrepreneurship class and corporate practitioners. The kind of large-scale data and controlled experimental environment that is difficult to access in traditional workplace is offered by the classroom setting. Managers would be wise to consider how their contexts may differ from the one we have described, and to adapt accordingly, even though prior research suggests it is reasonable to assume how people in the working world might act based on students' behavior in studies similar to ours. With that caveat in mind, we can offer two strategies to help managers leverage their teams more effectively.
The question to ask is not whether or not teams should be allowed to make their own decisions, but what kind of independence you should give them. It is not all-good or all-bad. In our research, we looked at how a more nuanced understanding of autonomy could boost performance. There are many other types of autonomy that managers could consider. Managers can experiment to gain clarity around which decisions benefit from more guidance and which are better left to employees.
Our work shows the power of randomness. When teams chose their own ideas, those whose members were randomly assigned performed better than teams whose members were chosen by one another. We observed the same kind of pattern in teams that chose their own members as we did in previous research, which showed that people tend to gravitate to their friends or to people who look similar to themselves. This didn't directly account for why these teams performed poorly, but indirectly, this meant that teams with complete autonomy got stuck in echo chambers, which inflated their confidence in their pitch decks and ultimately harmed performance.
There is no one-size-fits-all solution to determining how much team freedom you can give. Managers should use a more nuanced approach to determining how key decisions will be made. This requires moving past black-and-white philosophy and thinking about which areas will benefit from independence.
