Cohesive decentralization

Article by: Menno van Dijk, Berend-Jan Hilberts

Employees at any level have always struggled with the desire to be their own boss in some capacity. The dream (for some) is to be able to have a large degree of autonomy from the “boss”, and to work in small teams that are personable, collegial and non-hierarchical. This setup is required in situations when things move fast and coordination is difficult or impossible.

A typical example of this structure in action is a business development team that has been assigned to create a new business entity in an overseas market. The team is entrusted to be entrepreneurial, do the right thing, and adapt to local circumstances. How do you ensure this decentralized team does not reinvent the wheel, make choices that are inconsistent with the company brand, or miss out on opportunities to capture scale economies?

Effective decentralization is thus found in cohesive decentralization. First of all, amount organizational expectations. When a team is given decisional power, upper management should expect that they thoroughly inform themselves on and follow into the “grand scheme”. The team would immediately inform management about any issues that arise, come to them for advice, and take responsibility for corrective action and final results. Effective upward management means involving seniors for maximum effect, rather than keeping them at bay.

Cohesive decentralization is also about strengthening the fabric that keeps everything together, so that the whole organization can fly formation instead of all over the map. We’ve identified the seven key factors that bind teams for success, ensuring each team can thrive and survive within a larger team.

1. Shared vision and purpose

When the common purpose is shared by all of the employees, the organization stays on board, aligned, and focused on the right outcome. It provides a moral compass, and gives guidance in situations in which the right course of action is not immediately clear.

2. Shared values

Empowered organizations have a clear set of values and core beliefs governing behavior and performance. Enacting these values starts at the leadership level. A culture is felt and understood by all through experiences and stories. Stories and myths are a great way of ensuring common values stay “alive” in the organization.

3. Information transparency

“To move faster, pulse faster to more people.” Ensure information transparency through open communication about activities, progress, success and failure, and learnings. This is a sharp departure from the long valued “information sharing on a need-to-know basis”. It makes sure the people at the edge of the organization are fed in real time with all relevant information they need to make the best decisions. Transparency breeds trust and accountability – the foundations of great teamwork.

4. Talent hiring, grooming, evaluating, and rewarding

Hire people whose personal goals are aligned with organization goals and mission. To ensure synergy, you should not only hire based on skills, but also on cultural fit – without losing out on diversity. Value-based grooming means evaluating and rewarding people on common values, instead of one performance only.

5. Structure (teams, contracts, circles)

People need some form of structure to work together, yet (permanent) structures often lead to silo-ed behavior. Co-dependent teams, or “small fighting units”, allow for product, market and customer focus. By transcending functional units, these teams operate with clear but fluid structures that adapt and morph based on the needs of the organization and changes in the environment.

6. Mutual trust and co-dependence

Any person can make any decision after seeking advice from (1) everyone who will be meaningfully affected, and (2) people with expertise and experience in the matter. Advice received must be taken into consideration. The point is not to create a watered-down compromise that accommodates everybody’s wishes. It is about accessing collective wisdom in pursuit of a sound decision: with all the advice and perspectives the decision maker has received.

7. Rules of engagement

Culture and values come alive through behavior. Rules of engagement refer to “the way you feel and act” in any given circumstance, providing authorization and/or limits, among other things. It often also defines what the public sees. Apart from a set of “ground rules”, rules of engagement may include a brand books, working formats and templates.

The African proverb goes, “when you move fast, walk alone; when you want to move far, walk together.” Decentralized teams are mandated to act entrepreneurially and follow their judgment, but only when they can be trusted to stay connected, to leverage the leadership support and guidance available, and work for the common good.

To discover how to build successful teams and ensure that each team can thrive and survive, join the THNK Executive Leadership Program.