In part two of this four-part blog series, Scott Docherty explores distributed authority vs centralisation.
Niccolò Machiavelli, the 15th-century Italian author, built international renown and cult status for his teachings on political manoeuvrings to support the retention of power. His name has now become eponymous with immoral acts that do just that.
His teachings, and the general opinion in the centuries that followed, reflected a belief in the centralisation of power under the privileged few. This is something we have inherited into the organisations that many of us work in today.
A key driver of this concept is the belief that those in power have the ability (and in this instance divine right) to make the best decisions. They reached that position based on their competence and therefore have the ability to provide the best resolution to any and all challenges.
The theory behind centralisation of power
This theory supposes that centralisation will bring a rapidity to decision-making where a small number of leaders can make unilateral decisions to achieve progress. You can see the appeal here, particularly for your 15th-century monarch who had only a handful of decisions to make in between their feasting and general warmongering.
What this theory fails to recognise, however, is the complexity that resides in organisations today. Endowing decision-making responsibility to a small number of leadership results in a series of repercussions that impact the rest of the organisation. Teams face challenges of filtering and summarising necessary but inevitably nebulous information to support the thinking of leadership, when, in fact, they themselves know it best.
When you need to make hundreds of decisions that impact different customer segments on a daily basis, like we see in modern organisations, then we experience inevitable bottlenecking. Contemporary leaders have large portfolios of responsibility to attend to without the never-ending backlog of checking, verification, and general thumbs-upping of any and all decisions.
Centralisation leads to overworked management teams and an apathetic workforce
The result? Overworked management teams, delayed decisions, standardised outcomes, and an apathetic workforce who lose any sense of ownership of their work.
So, what is the opposite of a centralised authority? Answer: a distributed one.
In essence, this means pushing the decision-making responsibility to the places where it needs to occur. In other words, the individuals closest to the issues are the ones deciding how it would be handled. An example of this would be allowing a local store manager to determine which products they would fill their store with, rather than mandating it centrally.
Alongside the aforementioned benefits of faster decision-making, this approach also brings with it a range of positive outcomes. Decisions being made by individuals on the frontline bring more creativity, resulting in a greater likelihood of more tailored products and services to individual customers. This would better support the increasingly localised preferences of customers, where we see demand differentiating across geographical areas.
In addition, frontline staff are then rid of the patronising processes that spot-check their decisions and are instead imbued with a sense of ownership over their own environments. The freedom to make decisions inherently promotes leadership skills as it forces all staff to think more entrepreneurially about how they could improve the products or services they offer, and to take autonomous decisions in the best interests of the organisation.
So what is stopping us?
With the introduction of decentralised authority, there must also be a shift in the responsibility burden from leadership to the staff making the decisions.
Distributed authority
Herein lies the biggest challenges of making the leap towards distributed authority. Firstly, authoritative leadership (a.k.a the great HIPPO, highest paid person’s opinion) need to be taught that it is not, in fact, their God-given right to make every decision. Rather, they must feel comfortable and trust that important decisions can be made without their express input, and that the positive outcomes of those decisions are as much reflective of good leadership as if they had been made by themselves.
Another obstacle is the daunting weight of responsibility that will be levied on frontline staff. In this endeavour, a staged approach is advisable as all staff need to go on the sizeable journey from decision-takers to decision-makers. For that, I refer to our esteemed partners at Corporate Rebels who offer a couple of tips on how to start that journey here.
All in all, it would therefore appear that were we to follow Machiavelli’s maxim that “the ends justify the means”, we should really be looking to rid ourselves of the centralising means that we keep employing, and move to a distributed means that brings better ends.
This blog is part two of a four-part series on people and change management. Find out more information on the series here, and if you need any support tackling your business challenges, get in touch.
