Making Decentralization Work
We donât have the space here to cover in immense detail all the specifics of a decentralized structure. Nonetheless, there are some general principles about making a decentralized structure work:
- Link to vision. If your vision (values, purpose, and mission) is clear, people or groups operating autonomously can self-regulate themselves relative to the shared overall vision. They can all sight on the same guiding star, yet be in separate vehicles heading toward that star. Shared vision is the crucial link in making decentralization work.
- Overcome lack of centralized control with increased communication and informal coordination. People need to know what other decentralized subunits are doing so that they can act in concert with them. At Patagonia, for example, product line directors meet at least once per month to coordinate. Another way to gain increased communication and coordination without the burden of increased bureaucracy is to use electronic communicationsâ electronic mail, voice mail, computer networks, tele-conferencing, etc.
- Facilitate the transferring of valuable knowledge between sub-units. Hold internal seminars where members from different sub-units share ideas, present papers, and learn from each otherâs experiences. Grant prestigious awards to those who contribute a significant idea, invention, or other valuable assistance to another sub-unit.
- Have an open system. People operating autonomously can make good decisions only if they have good information. One of the best ways to achieve this is to make lots of information available to peopleâeven traditionally sensitive information. At NeXT, for example, any employee can get access to any piece of informationâeven peopleâs salary levels and internal financial information. Although you may not feel comfortable going to this extreme, we urge you to head in this direction. Again, compare centralized, secretive societies like the Soviet Union (and how terribly inefficient they are) with open systems like the United States. The same principle applies to companies.
- Avoid matrix structures. In an attempt to have the best of both worlds, some companies make the mistake of creating matrix organizations. Donât do this. Matrix structures remove the fire of personal ownership, not to mention accountability.