People in a self-organized team are able to make decisions themselves and accordingly adapt to changing situations. Command and control grunts have to wait for the boss to tell them what to do. That introduces latency in the development process as the team waits for the leader to shake free to deal with a decision.
He's right. The latency is proportional to the distance the decision maker is away from the point where the decision is needed. This is often far away from the coal face (hierarchically, geographically, or both). And it gets worse. Small decisions aren't possible because the latency is too great - you'll spend all your time waiting around - and because decisions are bigger than they need to be, they aren't easily reversible. (If you try to reverse them you have to traverse the hierarchy again adding more latency). This means it's more difficult to fail fast, learn, and try something else.
Self-organisation only works if people are (and importantly feel that they are) empowered to make decisions, own the necessary authority, are prepared to be responsible and hold one another accountable to their commitments.
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