Decentralized organizations make faster decisions and have more empowered employees

Synopsis: To accelerate decision-making and empower employees, decentralize the organization.

Variables:

• Appropriate distance from customer to decision-maker

Examples:

• The ride of a lifetime
  • One was something I alluded to previously, that the centralized decision making had a demoralizing effect on the senior leaders of our businesses, who sensed that the power to run their divisions really resided at Strategic Planning. The other was that their overly analytical decision-making processes could be painstaking and slow. “The world is moving so much faster than it did even a couple of years ago,” I said to the board. “And the speed with which things are happening is only going to increase. Our decision making has to be straighter and faster, and I need to explore ways of doing that.” I assumed that if the leaders of our businesses felt more involved in making decisions, that would have a positive, trickle-down effect on the company’s morale.
• Cable Cowboy- John Malone & the Rise of the Modern Cable Business
  • Instead of scores of TCI cable systems taking orders from Denver, Hindery wanted to put marketing and purchasing decisions back in the hands of local operators. “You market from the bottom up, and not the top down. What works in Birmingham doesn’t work in Bozeman,”’ he told the troops. With haste, Hindery lopped off the heads of 25 executives at TCI, including Brendan Clouston and his team, and replaced virtually all of the positions from within. He began remaking TCI into a collection of local companies that tended to their own markets, based on the simple idea that no single manager can manage more than 2 million subscribers.