With an increase in technology and the ability to passively monitor initiatives without having to be the focal point, a lot of companies are making the shift to a more circular or frequently referred to as a decentralized management structure. Over the past couple years, Incipient has aimed to decentralize areas that were creating a bottle neck and empower lower-level management to make decisions that would typically have to go through upper management.
What’s a Centralized Structure?
A centralized structure typically relies on one individual or upper level management only to make decisions and directly provide for the company. But a decentralized approach distributes some of those roles and decision-making abilities to lower level management — encouraging several people to be involved in the decision-making processes.
Of course, not all companies should decentralize and it’s a decision that must be taken with ease to ensure the distribution of responsibilities is systematic and not just completely let go of the ropes. As a company, we decided to test decentralization in our micro processes where we felt it was hurting the iterative cycle, restricting our teams from being agile, and having the ability to make product decisions quickly. Once we began to see the initial results within that department, we applied the approach in other areas and now have a clear synergy across all departments and individuals. Here are some benefits.
Employees can be empowered through the additional of responsibilities and roles in which they are in charge of execution. It is important to ensure each team member sees their role in a project as more than just a “doer.” Driving a sense of importance and making them know that their input is an element that is driving the direction of the organization is critical for decentralization to be effective. Allow your employees to leverage the knowledge and experience they have gained and implement their own ideas that can result in constant improvement of processes, products, and relationships.
Relieving the burden
As a moderately-sized company, a lot of work flow comes up to C-Level management quickly and often. When each core stage requires the approval of a manager, then a lot of momentum can get lost and at times quality can go down because the approval queue is too large and no manager wants to be the source of delays. Through a circular, decentralized approach you allow those managers to delegate a leader to make more of the micro approvals and relieve the burden of daily business operations allowing your managers to focus on the bigger picture and identify areas in which we can expand or nurture important clients growing existing businesses.
Creating a self-sustaining environment
When it comes to management you hope everyone is along for the long ride, but circumstances happen in which people move, leave, or seek opportunities and in some cases unplanned emergencies arise in which an individual must take an extend leave. In these circumstances, a centralized approach could be detrimental in a smaller business because that person was the focal point of everything.
Through the disbursement of that individual’s responsibilities, you will mitigate the risk by creating a self-sustaining environment that can operate without that person calling the shots and have the ability to pull up one of the high performing team leads to fill the role until the manger returns or is replaced.
With a circular flow everything is in constant motion allowing decisions to be made quickly and momentum to be sustained. We have seen a large change in the momentum and creativity that are the drivers of execution by allowing the micro decisions to be made quickly by those who have proven themselves and gained the trust of upper management. There is no more reason to send things “up to the top” for approval and sit their idle while waiting for approval.
Ease of expansion
With trust, empowerment, and respect comes a sense of community and family. Having this present in your organization is more impactful than any tool we have ever seen. Opinions are shared openly and objectively allowing the company to identify needs and execute quickly. We have seen a large increase in our team over the past year and empowering our employees to source candidates and conduct initial interviews has increased retention and ensured we got the right person in the right seat the first time around. Skillsets are important, but fitting into to the ecosystem and being a part of the family is critical.
As we expand to Houston in 2018, this approach will be vital to our success, allowing the members there to be adaptive to their environment and make the decisions they feel will have the biggest impact.
One of the biggest misconceptions is that organizational structures require a significant amount of planning time. In the beginning, yes, more planning and system creation is important to drive consistency and build your foundational processes. However, once those are in place, you must shift your focus to the team members and managers of that process and provide them the power to scale.
Whether you are a one-man shop or a 250-employee organization, delegation and empowerment is what will take you to new levels. We can’t be in control of it all.