A quiet revolution is taking place in the workplace right now. Centralization is out, and decentralized management is in, reflecting wider technological trends. Here’s why centralized, hierarchal corporate structures are out and how companies are using decentralized management to future-proof their businesses and increase employee satisfaction.
Self-sufficiency
A decentralized organization prioritizes the opinions of people closest to stakeholders and subject matter experts, which results in a flat or horizontal organization that is nimble and addresses issues quickly.
- Lower-level employees are empowered to think about the organization’s future instead of worrying about what their manager will think.
Efficient management
Executive teams also have an important role to play, and steer the larger decentralized ship
- Decentralization emphasizes lean management, with an executive team focused on maintaining conditions that allow lower-level employees to fully express their creativity
- Determining metrics and other performance indicators is simple
- The flexibility inherent in decentralization allows employees to choose the work they’re most passionate about, and vice-versa
Promotes leadership skills
Centralized organizations don’t provide low-level employees with the opportunity to ascend to leadership roles.
- A decentralized organization forces employees to act as leaders. Thanks to greater autonomy and priority on responsiveness, employees must act decisively. The result is an upgrade in company-wide leadership skills and a better competitive posture.
Easier scaling
Decentralized organizations respond to changing business conditions quickly and scale accordingly
- Every team and employee is a separate cell, allowing for economies of scale and nimbleness
- The ability to customize products faster allows for more sales and better connections with consumers
