Anna Elgh on self-managing teams and shifting conflicts at Svenska Retursystem

Lisa: So Anna, thank you so much for coming on the Leadermorphosis podcast. I thought maybe we could start with if you could tell us a little bit about Svenska Retursystem and what you looked like as a company before you started to go on this journey towards self-management or towards a new way of working.

Anna: Thank you and I do appreciate to have the opportunity to speak on this podcast. I think it’s a fantastic podcast that you are producing. Well, I started as a CEO in 2014, and Svenska Retursystem is a truly circular company providing the Swedish food industry with crates and pallets for the entire supply chain. We are a fast-growing company and the company has been growing all over the time for the 20 years that we have existed.

But at the time when I started at the company, our employee motivation index was a real catastrophe. It was looking so bad, I’ve never seen anything like it. And it has always been my mission in different companies where I’ve worked to work for a way of engaging all employees and working together. So I thought this was really a challenge and also a situation where I thought that I could really add some good things to the company.

So really the main purpose of this journey was to create better conditions for everybody to engage in the development of the company, and that everybody could feel free to take day-to-day decisions. And through doing that, we could increase the motivation and engagement from all employees. So that was really the starting point.

My former CEO, he retired when I came to the company and he was actually taking most of the decisions. So it was a huge change that the company was in need of. So we started off establishing a new way of working. We wanted to establish a system and a way of working with systematic improvements and based that on the lean thinking principles. I’ve worked with that in many previous companies and I’ve seen the positive effects of it, and it really creates evolvement to a lot of the people.

So we started to establish improvement teams and cross-functional teams and involving more and more people. We also started to work with self-insight amongst people and we started to work together with Enneagram Institute. That is a model that is based on nine different strategies that we as individuals use in our daily life. And through that, I think we built an understanding on how different we really are and why we react the way we do, and how we can relate to each other in a better way with a higher degree of understanding why we behave the way we do. So we started really training all people in this method and we did the analysis on all our staff.

And throughout these years we had discussions on how could we actually support our managers in a better way, how could we support them to be more involving, less controlling. Because I think I have the experience from previous companies where we have worked with the lean thinking principles and continuous improvements - that really depends on how the managers adopt this and how the manager behave in relation to the staff and to get really all people involved.

So things were going pretty well, I think. We saw huge improvements in our employee motivation index. But at some time around 2017, we didn’t see the improvements anymore and we saw actually all the behaviors coming back, old conflicts were actually reappearing again. And it was like this is just reproducing itself, the way of behaving and the silo thinking and hierarchical culture. And I was really frustrated because I didn’t really know what to do, because doing what we had done had worked quite good in other companies that I have worked with. But I was really frustrated, well what should we really do now?

And it was actually at that time that we met with Tuff Leadership Training, and they felt like a very good partner because we were speaking the same language. And what I appreciated very much from their side was the approach of very hands-on training, focus on shifting climate and sort of putting everything on the table and start to deal with it. And that was really what we needed.

So the journey that we are going to talk about a little bit more did really not start with the ambition of creating self-organizing teams. It started from something really different.

Lisa: That’s really interesting, the evolution of lean principles and Enneagram and then meeting Tuff and seeing what that partnership could look like. When you started that next phase or chapter of the journey, I guess you could say with Tuff Leadership Training, what were you hoping for? In terms of what support were you looking for to help you on this journey?

Anna: I think what we were looking for was to increase the cooperation in the company, to create the climate and an environment that supported cooperation instead of conflict. And also to get the coaching and help from Tuff to work with the conflicts that we had at that time. So that was really the aim - shifting the climate, that was what we actually talked a lot about. It was like a wet blanket all over the company. We’re trying to do things but nothing moved. It was hard to know how to deal with it, and my feeling was that Tuff could provide us with tools that we were not in the position of.

Lisa: It’s like the image I have is, as you described it, that things were working well and then they seemed to be sort of sliding backwards somehow. And it seemed like there was something intangible that was in the way for you to kind of push through to the next potential really of the company.

Anna: Yes, we have changed. I mean, there were a lot of people that had gone from the company and new people that are coming to the company, but then suddenly the behavior of the people who left the company was starting to reproduce itself amongst the new people. It was kind of weird.

Lisa: Human beings are messy creatures, aren’t they? So it’s now year three, I think, of this collaboration with Tuff and I’m curious to know, what were some of the starting points and what have been some of the milestones along the way in this shift?

Anna: Well, I think the starting point was actually when our partners at the Enneagram Center, they saw a potential within SRS and they recommended us to read the book “Reinventing Organizations” by Frederic Laloux. And I know you have interviewed him. And that was a real eye-opening for me because I didn’t even know that these kinds of companies existed. And I realized that most of my career had been really different from what it has been if I had worked in a self-organizing company.

And I think that I myself have actually worked in that way in many companies and taking my decisions, but it hasn’t been really approved from my managers of course because it’s not the way you do it. And it’s actually forced me to change jobs and companies several times due to the fact that I have felt too constrained. So I got this from reading that book and then meeting with Tuff. It gave me a strong conviction that this was really something to hold on to, and also due to my personal experience.

So that’s how I became interested in going that path more. So when we started off with Tuff, we decided to start with two teams: the management team and the IT team. And the IT team had actually, I think the IT sector is more advanced in this field, because the IT team had already decided to start their journey towards a self-managing team. And our CIO left the company in 2017, and at that time I sat down with the IT team and we discussed where they were and what their needs were. And they actually felt that they had a job to do to make it more clear about the responsibilities and roles within the team before they felt that they could proceed in a recruitment or put a very good specification of what they needed.

And finally after having done that process, they came to the conclusion that they didn’t want to recruit a new CIO or manager. But when Tuff Leadership came along, we felt that they could really support this team and give them some good coaching. So that’s why we chose to start with the IT team.

But on the other hand, working with the management team was much tougher and it was a much more difficult story. Because I think the idea of giving more control and more mandate to the organization, and together with that, we were actually creating more cross-functional teams where the decisions were made more and more. That was something that for some members of the team, it wasn’t in their comfort zone. So we had several conflicts within the management team.

So it was quite a tough year, I must say, 2018. And by the end of that year, two members of the management team actually left the company. And I think that in looking back, it was something that happened because they didn’t feel that this journey was in their interest. It wasn’t very interesting.

So when they left, I actually did the same as I’ve done with the IT team. I sat down with their old teams - it was the operations team, production and logistics, and it was the sales and marketing team. So it was actually two teams that are really crucial for our deliveries in the organization. And I had a discussion with them on what they wanted to do and if they wanted to try out this same way as the IT team had decided to go. And they both decided actually that they wanted to try it out and not recruit a new manager, which was really fascinating.

And this was something totally new for me, and I think this was really the starting point on the natural dissolution of the management team. That actually happened around May 2019, that we actually finally decided that all the decisions are made in other groups, in other meetings, why should we have a management team? It’s just adding more meetings, more reporting, and so on.

So we took that decision and we said we can always go back if we feel that this doesn’t work. And I think that at that time it wasn’t a difficult decision, but I think it was tough for the organization because there was a lot of frustration in the rest of the organization. And they had just gone into this messy middle, and I think the rest of the organization was asking more questions about “what are they doing - no management team?”

Lisa: I think it’s really interesting to think about something that Miki Kashtan shared when I interviewed her for this podcast about that the shift has to happen in two directions: from those who have management positions or have formerly been managers to sort of unlearn a lot of controlling, command and control behaviors, but also there’s a huge journey for people who are on the other sort of end of the scale who are used to there being managers or a management team to make decisions that they can go to with complaints or problems and rely on. And so it’s sort of, it can be painful in both ways. I’m going to kind of hear that in what you’re sharing as well, that you know, for many of the management team the idea of giving away my authority and my mandate - that’s not so appealing to me. And also for people on the other end: “What do you mean we’re not going to have a management team?” Like that, you know, suddenly that opens up a whole world of uncertainty and completely unfamiliar questions.

Anna: Where are we heading? Yeah, what is the hidden agenda? What’s the catch?

Lisa: So how did you navigate that as sort of CEO and as the person championing this transformation? How did you hold the space for people to ask those questions and to kind of handle that tension, I guess?

Anna: Well, I think I had very good help from Tuff Leadership Training. I had very good training, good help from Karin and Christer. Because I think personally for me, it has really been a challenge to have the patience and not to step forward when the organization is asking for a structure and these decisions. And I mean, this is really something that I have done in all my previous jobs and I think I’m pretty good at it. And suddenly what you are good at, you are not supposed to do. Because the organization, if we want to really reach our goal - and I do - I think what helped me was that I was convinced that this was really something we had to do even though it was hard.

So my conviction that this is the right way to go, that helped me. But it was still very stressful not to go in and interrupt them and take decisions. I think that was the most difficult part.

And by the end of 2019, or during that fall, I think I had the worst period I ever had in my entire career because there were some employees that started sending anonymous letters to our chairman and to the board of directors. And it was stating that this is terrible, the company is heading towards chaos and nothing is working, the results are going to be a disaster. And I’m very glad that I had the support from the board at that time to continue because they didn’t see that the company was in chaos, and they saw very good results.

And after this period, we also got a new employee motivation survey that showed that that was not the case amongst the majority of the staff. And we have also since then delivered our best results in the history. So we sort of proved that things have not become chaos and instead the cooperation - I hear people stating every week that we have never had such good cooperation between us as we have today. So today I can say it was worth it, but it was a terrible period.

Lisa: What were some of the things that got you through that difficult period? Because as you say, I can imagine it must be really difficult as a CEO, especially as you said coming from a long career of doing things in a particular way and being really good at doing them in that way. It must have been very tempting to want to step in and solve things and add things. And so to have had that experience of almost like your hands are behind your back or something and to have this unrest from people must have been very tough. What got you through that?

Anna: I think as I said, my own conviction that we can’t reach a state of working in the company where everyone takes responsibility if we don’t wait for everyone to do that. So I think that I sort of mentally knew that if I were to step in again, I was I would ruin months of work by setting us where we were. And I think it was very from my side - all this journey is very value-driven, and it comes from what I sort of believe in. So I think that that was what helped me, and also having the support from Tuff to really support that it will eventually get better.

Lisa: I really like what you say there about waiting for everyone to step into responsibility. And you mentioned before about patience, and I think a lot of times I talk to CEOs or senior leaders who are frustrated that there are pockets of the organization that are really on board and moving really fast, but then there are teams and parts of the organization that are really struggling or resisting or slow. And it’s so easy, I think, at that point to give up and think, “Well, maybe some people just need to be told what to do.” Or “Maybe this isn’t working.” And I think holding on and having that faith that it will happen and having that patience that it takes different amounts of time for different people, there’s so much unlearning to do and new ways of being to practice. Yeah, that if you could just hold fast, then you know, as you’ve experienced, you come out the other side.

Anna: Yes, and I must say that the feeling right now is that a lot of people in the company have actually come out on the other side, but some are still in a messy part. But there is a bigger and bigger majority coming out on the other side, and they’re just giving a lot of energy into the daily work.

Lisa: I’m curious to talk a little bit about this piece you mentioned about shifting the climate, and you mentioned also about there being conflicts in the management team, for example. What have you learned from this experience about a working climate and how important that is and how you can shift it together?

Anna: We have adopted the methods and learned with Tuff Leadership Training about putting the moose heads on the table. It’s been a way of doing it that has helped us. And as we have also - everyone has gone to training, not yet done it, but we have a cooperation that helps us in creating the same language.

But I also think that we have a pitfall in our organization that we are very kind, we are very warm to one another, we are very caring - which is good. But when it comes to giving a very clear and direct feedback, we are in a learning phase to really see that we do that because we care. We don’t do it because we want to be mean to one another. And that is really something that we have been working very hard on and continue to work hard on, to really when you get the feedback from someone, you also can feel that this is because this person is caring about me and want to help me to become better. And we need a lot of training and we continue to train in order to make this happen. It’s hard, takes commitment, but we are talking about this a lot more today and also addressing things in meetings.

Lisa: Can you give an example?

Anna: For instance, when we are in a meeting when we are talking about how we should prioritize different projects within the companies, today we can address - anyone can actually do that - address in that meeting if they have a feeling that there is a hidden agenda or “Why was this decision not made in this meeting?” And we can start talking about those things. And it didn’t use to be that way. Then people went out of the meeting and then they started to talk afterwards about this. They discussed this behind closed doors. So that has changed, I think.

Lisa: What are some of the other changes or shifts that you’ve noticed, and what are some of the things that you’re most proud of?

Anna: I think what I’m most proud of is actually that we had the courage to let go on the management team. It was a big step, but I think that we actually could walk the talk. And I still think the feeling is that I think you have to have that feeling every day that you fall down in your pitfalls every day. And I think that it has made me a more humble manager because I feel that there are new key learnings to do every day.

I think I felt like a more experienced manager when I came to SRS than I do today. I have many new experiences, but I had to relearn a lot of what was truth to me when exercising a managerial role. So and I think that that has been very - that has given me a lot of energy. And I think that’s why I’m still the CEO in Svenska Retursystem. I’ve never been in a position for as many years as I have been here, but I think that’s what giving me also a lot of energy that I’m learning new things every day.

Lisa: Do you find - because I think it’s often difficult the higher up the organization you go, the less feedback you tend to get. You know, people, it really sort of can feel really risky and dangerous to give feedback upwards. Did you notice a shift in that culture? Do you find that people are more willing to give you feedback now?

Anna: They could still give me much more feedback. If you go to the Enneagram, I have this number eight, the Challenger. And by nature, I think a lot of people feel that we can be dominant and not easy to go and say what you think. So it’s become much better and I have very good colleagues that give me feedback, but I could use much more feedback.

Lisa: How do you see your role now, now that the management team is dissolved? And I’m assuming the those three teams you mentioned, IT and the other two teams that they’re still self-managed, that they haven’t reinstalled a manager. How do you see your role as CEO now? And I guess, how do you - what does leadership look like generally in SRS now?

Anna: It’s fantastic because I’ve released and gotten so much more time. And I think that I’m actually spending my time on things that I should spend my time on much more and spend more time on the strategic agenda, be a support to the organization where I’m needed. And I think I have more time to do the right things. And I think it’s good because we have several positions that used to be in the old management team and I’m no longer their manager. They don’t have a manager as these self-organized teams don’t have managers. So we work more in groups where we need to work. So I think more and more that the organization is using me more as a support and someone to discuss things with when needed.

Lisa: And the other managers in the management team, did they sort of reshape their roles? They found a different way to…

Anna: Yes, but we are still in a phase where some of the company - some of the teams have not appeared. So some of the managers from the old management teams, they are still manager for their team. And that’s working fine, but of course I think it’s posting - there is this question in the air: where are we going and are every team supposed not to have a manager? But we’ve never taken that decision. It has to evolve and it has to sort of be driven from the organization, what the next step is for different teams.

Lisa: It sounds like you’ve started with teams where there’s the most natural energy towards experimenting with this way of working, like the IT team and the management team and then those other teams when the managers left. So I think that’s a good approach to not sort of enforce this or to rush it, but to allow it to evolve in the organization. And as you say, now it’s sort of more of a groundswell, a majority of people who are starting to work in this way, and naturally the others will sort of take notice and see what it means, what it really looks like in practice.

Anna: Absolutely.

Lisa: I’m curious, you know, I’m wondering if there are some people listening who are interested in some of the results. Like so we’ve talked a little bit about some of the human things, noticing people talking about different things more honestly and openly in meetings, for example. But you mentioned also that one of the things that’s helped even when it’s been tough times is that the results were good and now, you know, record results. So what have been some of the tangible benefits that you’ve noticed?

Anna: I noticed that we have reached a higher degree of transparency within the company. We were quite transparent, but we are even more transparent today and we try to share information and communicate within the whole company. We’re 160 employees and we’re trying to find ways so that everyone can get the same information and communication at the same time. And that has helped, I think, for more people to take decisions.

And also along the way, I think when we have sort of found a problem or an obstacle in how should we do now - I can take an example: how are we supposed to take decisions in the new organization? Then one of the teams got this task to look through how can we do it, are we supposed to think when we take decisions, and also to clarify. We have some different forums and which forum is supposed to take what decision, and also to clarify that each and every one can take decisions as long as you take advice from those who really know something about it. So that is something that we have worked with, and I think it’s getting better and better.

Also, well, how do you set salaries when you don’t have managers, or half of the organization have managers? How should we do this? And to solve this problem, we also set up a cross-functional team that worked with this. And I think that was very, very good, but we have never had a really good process even before with the managers, because a lot of the people felt that it was unclear. How do we set goals? What are the premises? Who is deciding? And a lot of people felt that it was very unfair, the way they got their salaries.

So I think also would by doing this and working in a cross-function team, it became very apparent for much more people in the organization how hard this is. This is not an instant quick fix. It’s really difficult to set a good process, but they did a fantastic job, I must say. We - they ended up in a process that is 100 times better than the way we used to do things. And they managed to set up a process that could work both for teams with a manager and teams without a manager, so it can sort of coexist in this organization where things look different.

Lisa: Would you be willing to share something about what some of the principles of the salary process are?

Anna: Yes, what they decided is that you will get the feedback from at least two of your colleagues. And if you have a manager, you should get feedback from your manager. And then we have - they have set up different criteria, so you are measured in different kinds of areas, say five different areas. And then actually you will know before what the percentage of raise will be depending on your feedback or your evaluation.

So it’s not like, well, I think this is a good guy so I’ll give him five results. It’s very well defined in advance, and then you will also receive - and you will by yourself choose who will give you feedback. So you can choose that, and then you will receive it back in person also from one of the ones who you decided you wanted to get feedback from. So that’s why we’re also doing a lot of feedback training now together with Tuff Leadership Training. And that’s good because then we really get everyone to train on this during quite a short period. And I think that would help us on the journey.

Lisa: I’m interested as well to explore whether you have noticed this sort of new organizational culture and this new way of working, whether that’s had an impact on how you as an organization have responded to the coronavirus pandemic?

Anna: Yes, that’s an interesting question. I think it has been a great help to us. When the virus started, I would say I think we gathered our crisis team in the beginning of March. We have a situation because the entire food industry is depending on our delivery, so we could not just shut down our plans. But it started mostly in Stockholm, the virus, and where we have our office in Stockholm. The majority could work or all of us could work actually from home, so we decided that we never closed the office. If you need to come into the office, you can do that. But we followed the recommendations, and it has worked fantastic. Everyone has really taken responsibility and delivered in a period where we have - we had doubled the growth that we had anticipated this year, which means that we have been in a very, very tough situation just to make our deliveries. And the entire organization has worked fantastically to deliver this, and this has never been an issue that we are not in control or people are not doing it. It has just happened and everyone has taken a very good responsibility.

Lisa: What are your hopes now for SRS in the future? Like what’s your vision for how you hope things might continue to unfold?

Anna: Well, we have a goal to become one of the most attractive mid-sized companies in Sweden according to Great Place to Work. We have taken, as I told you about, big steps. We were certified according to their standard last year, but of course we have many more steps to take. But I’m confident that we will make it.

And we have also talked about that currently we are an organization that is organized in different ways. And so there are still questions asked about where are we heading, what’s decided, and nothing is decided. So somehow we have to continue this journey and every team has to take own responsibility of their journey and decide when it’s time for them to take the next step and what is the next step for the different teams.

But what is clear is that many of the self-organized teams that we have in the organization, they don’t want to go back to the old way of working. They are very clear about that. And then we have other teams that are not really - but also are self-organized that feel that it’s not really efficient right now, we need to do some changes.

And the hard thing now is not to fall back and start taking top-down decisions, to really continue to be in this even though we see such positive effects that some teams - other teams must find their way. And I can just go to myself: I’m no longer the same CEO or manager that I used to be. So if the organization should sort of make a decision that “No, we must go back, we must have structural order and more hierarchy” - I don’t think I’m the CEO for that company. So that’s where I stand, but it’s not my decision on where we go. But I would surely see consequences for my own part if the organization decided to go back.

So I think we continue working with Tuff and they are helping us with this huge change and continuous training. And I think we are - if we can just manage now to start giving even more feedback, not be so kind to one another, less blind spots - we can really help each other to develop. But we’re on a good way, and I think it’s very fun and a lot of people are saying that it’s good fun, it’s working right now.

Lisa: That’s really inspiring. I’m wondering Anna, what - perhaps people that you’ve spoken to are the CEOs or leaders have asked you this, but for people listening who are on their own journey towards self-organized teams or towards, you know, more lean or agile ways of working. Having sort of gone through this journey yourself and of course it’s ongoing, but what advice would you give to people who are on this journey as well?

Anna: I think it’s really hard to give advice because the key thing about this is that every organization has to find its own way. I mean, it would be so much easier if you could just go to a book and you get some recipe and then follow the recipe and then it was over and done. And this is just the opposite, I would say.

And I mean, the hardest part of moving towards the self-organizing company is the fact that it is the organization and the employees itself, and not me as a CEO, that have to lead the way. And if you don’t stay in that and realize that, I think you are back in the hierarchical way of thinking.

So if I have to give an advice, it’s really about staying calm and to be brave and to have the patience and trust the process. And eventually things get better. I’ve seen that myself and to relate to the people as competent and adults to take the decisions and lead the way. And it’s believe me, very difficult and very frustrating. And as I myself experienced, you will be questioned. So you have to have a good - you have to have a sort of well inbuilt trust on beforehand, a capital of trust, I think, before doing it. Because there are a lot of people around you that say, “What is this? What are you doing? This is crazy.” So one’s inner belief, I think, is a good thing to have. You need that to try this path.

Lisa: Thank you. Is there anything else that you’d like to share with listeners that we haven’t covered?

Anna: I think we have talked about a lot of interesting things and a lot of good questions from your side. So at the moment, no.

Lisa: Okay, great. I always just like to check in case. Otherwise, it’s me being authoritarian ending it when I want to - in a good way. Well, thank you Anna so much. I really enjoyed this conversation. I think I’m just so inspired by your commitment and your courage, and it’s incredible these stories and how people are growing and developing.

Anna: Yeah, it’s amazing. It’s really amazing to see. It gives me a lot of - yes, it’s important for me to see that. Yeah, so thank you for having me here.

Lisa: Yeah, my pleasure. Thank you for your time and for sharing your stories.