Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
COHESIVE
DECENTRALIZATION
2
• Today’s organizations facea volatile businessenvironment with large
uncertainties.
• To survive and scale,organization...
3
DECENTRALIZED COHESION
4
1. Intrinsic motivation
2. Decentralized decision-
making or self-management
3. Discretionary resources
4. Belief in cap...
5
INTRINSIC MOTIVATION
6
INTRINSIC MOTIVATION
Consider the paradigmin which,givenappropriate working conditions, most people perform
wellandare t...
7
INTRINSIC MOTIVATIONDECENTRALIZED DECISION-MAKING
AND SELF-DIRECTED TEAMS
8
Decentralizationempowersrapid decision-making by the people closestto the customer. By
putting the power where the actio...
9
INTRINSIC MOTIVATIONDECENTRALIZED DECISION-MAKING
AND SELF-DIRECTED TEAMS
BELIEF IN CAPABILITIES
10
BELIEF IN CAPABILITIES
Fostering deepfelt-faithon your employees’ abilities createsanenviroment of motivation.
Focuson ...
11
CONTINUOUS LEARNING FOR
MASTERY AND CONFIDENCE
12
Createanenvironment in whichcontinued employee development andlearning is
encouraged.This is not just aboutencouraging ...
13
DISCRETIONARY RESOURCES
14
DISCRETIONARY RESOURCES
Insteadof allocating budgetand resourcestop-down, andfollowing a “predict-and-
control” approac...
15
CONTINUOUS STRESS TESTING
THROUGH “INDUCED GENTLE ABUSE”
16
Failureshappenandthey inevitably happenwhen leastdesired or expected.The best defense
against major unexpectedfailuresi...
17
1. Intrinsic motivation
2. Decentralizeddecision-
making or self-management
3. Discretionary resources
4. Beliefin capa...
18
CONTINUOUS STRESS TESTINGSHARED VISION, COMMON PURPOSE
19
SHARED VISION, COMMON PURPOSE
When the common purpose is createdwithinput fromallof the employees, the organization
sta...
20
SHARED CULTURE, COMMON VALUES
21
SHARED CULTURE, COMMON VALUES
Empowered organizations have aclearset of valuesand corebeliefsgoverning behavior and
per...
22
INFORMATION TRANSPARENCY
23
INFORMATION TRANSPARENCY
“Tomove faster,pulse faster tomore people”.Ensure information transparency through
open commun...
24
INFORMATION TRANSPARENCYTALENT HIRING, GROOMING,
EVALUATING AND REWARDING
25
TALENT HIRING, GROOMING,
EVALUATING AND REWARDING
Hire people whose personal goalsare alignedwith organization goals an...
26
STRUCTURE
27
People need some form of structure to worktogether, yet(permanent) structures often leadto
silo-ed behavior.Co-dependen...
28
MUTUAL TRUST AND CO-DEPENDENCE
29
MUTUAL TRUST AND CO-DEPENDENCE
Any person canmake any decision afterseeking advicefrom(1) everyonewho willbe
meaningful...
30
RULES OF ENGAGEMENT
31
RULES OF ENGAGEMENT
Culture and valuescome alive through behavior.Rules of engagement referto “the wayyou
feeland act”i...
Upcoming SlideShare
Loading in …5
×

Cohesive Decentralization - THNK School of Creative Leadership

1,466 views

Published on

Employees at any level have always struggled between wanting to be their own boss in some capacity. The dream (for some) is to be able to work with a large degree of autonomy from the “boss”, 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. However, let’s hope it is not because the organization lacks inspirational leadership.

A typical case is a business development team that has been assigned the creation of new business entity in an overseas market. It 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.

Published in: Business
  • Be the first to comment

Cohesive Decentralization - THNK School of Creative Leadership

  1. 1. COHESIVE DECENTRALIZATION
  2. 2. 2 • Today’s organizations facea volatile businessenvironment with large uncertainties. • To survive and scale,organizations should not only be innovative but also focused,adaptable, agile and in touch with the external environment. • This requires new ways oforganizational design to accelerate and sustain growth. • Organizational design based on decentralization or even self-management seems best suited to offerscontinuous and new growth pathways in this environment. • However, there is a dilemma as decentralization/self-management challenges synergy and increases risksas “control” islost. There is no fitfor all solution to solve this dilemma. • Even the organizational design itself needs to be continuously adapted to have a scalable organization. SUSTAINING GROWTH IN TODAY’S BUSINESS ENVIRONMENT
  3. 3. 3 DECENTRALIZED COHESION
  4. 4. 4 1. Intrinsic motivation 2. Decentralized decision- making or self-management 3. Discretionary resources 4. Belief in capabilities 5. Continuous learning for mastery and confidence 6. Stresstesting through induced failures What drives us outwards? What binds us together? 1. Sharedvision andpurpose 2. Sharedvalues 3. Information transparency 4. Talenthiring, grooming, evaluating andrewarding 5. Structure (teams; contracts; circles) 6. Mutualtrust andco-dependence 7. Rules of engagement(templates, brandbooks, formats)
  5. 5. 5 INTRINSIC MOTIVATION
  6. 6. 6 INTRINSIC MOTIVATION Consider the paradigmin which,givenappropriate working conditions, most people perform wellandare the most important assetof the company. Ifyoubelieve thatworkers canderive satisfaction fromtheir physicalandmentalwork, they will doit for self-actualizationand enjoyment. Treateachworker asamature andresponsible individual. This spurs actionand self-motivation towardssolving difficultproblems, gothe extra mile,to do the right thing rather thanjust the easy thing, andit willlift the performanceand energy of the team. How might you ensure thatyou selectintrinsicallymotivatedpeople inyour organization? Zappos offers atwo-weekboot camptoallnew call-centeremployees. Afterfinishing the program, allemployees get a choice: eitherthey get $2000 tostop, or they are hired. Thisway, they retainthose that are reallymotivatedto stayand dothe work they’re being inspiredby. Afterthe breakdown of the “Obamacare”website, BarackObamaenlistedthe helpof young, tech savvy professionals toget the websitebackand running. Thisledtothe creationof the US Digital Service, whichspecificallytargetstechtalent that wanttohave positive societalimpact.
  7. 7. 7 INTRINSIC MOTIVATIONDECENTRALIZED DECISION-MAKING AND SELF-DIRECTED TEAMS
  8. 8. 8 Decentralizationempowersrapid decision-making by the people closestto the customer. By putting the power where the action is,you ensure that the right people,equipped with the right information andcontext make the right desicions –rather thanwaiting for decisions from the ‘higher-ups’ whousually don’t have the complete picture,or actdelayed.Self-directedteams are anextreme form inwhich the members areresponsible for anentire business operation, generally with no input froma manager. What canyou decentralize toempowerfront-line employees andwhatwould makeself-directedteamsanattractiveoption? Buurtzorg, whichoffers homecare, relieson self- directedteamsby itsfront-line nurses. Every teamis responsible forits ownclienteleandis inclose contact withfamilydoctors andfamilies.The teamsare also responsible fortheir ownfinancialresults. There is no middle-levelmanagement. Whole Foods decentralizes decision-making toregion and store levelby empowering the localmanagement and withinthe store to specificteams,e.g.,the fresh-produce team. DECENTRALIZED DECISION-MAKING AND SELF-DIRECTED TEAMS
  9. 9. 9 INTRINSIC MOTIVATIONDECENTRALIZED DECISION-MAKING AND SELF-DIRECTED TEAMS BELIEF IN CAPABILITIES
  10. 10. 10 BELIEF IN CAPABILITIES Fostering deepfelt-faithon your employees’ abilities createsanenviroment of motivation. Focuson creatingcleardivison of accountabilities andon producing results, rather than stipulating how things should be done. This willencourage people togive their best: achieving andexceeding personalgoals. Itis not just aboutgetting things done, but alsoteam-bonding andcreatingjoint experiencesfor your employees. How doyou fostertrust among your employees? SEMCO employeeshavefullaccesstoall financialsof the companies. They set their own salariestwicea year,based onthe information provided. At Virgin, employeescantake vacationtime when they feelis appropriate.Bosses and employeesare askedto workit out with one another, withsenior levelexecutivestaken a mand, tomake sure people follow-through.
  11. 11. 11 CONTINUOUS LEARNING FOR MASTERY AND CONFIDENCE
  12. 12. 12 Createanenvironment in whichcontinued employee development andlearning is encouraged.This is not just aboutencouraging your employeesto participate inongoing training, but alsoabout ensuring continuous internal feedbackloops to spur learning,mastery, andconfidence.This dynamic also promotes a culture of mutualtrust (among employees, management,and leadership) andencouragesaculture of transparency andhonesty. How doyou use continuous feedbackloops inyour organization tokeep everyone on alearning path? Mendeley’s HackDaysseek tospurlearning, by bringing together people innew teamsthat group around achallenge/project of own choosing tokeep people on alearning path. Morning Star’s employees formulate theirintrinsic motivation, learninggoals, andtargets onanonline environment, towhichcolleaguescangive constructive feedback,creatingcontinuous learning loops towork towards theirlearning goals. CONTINUOUS LEARNING FOR MASTERY AND CONFIDENCE
  13. 13. 13 DISCRETIONARY RESOURCES
  14. 14. 14 DISCRETIONARY RESOURCES Insteadof allocating budgetand resourcestop-down, andfollowing a “predict-and- control” approach,more andmore organizations arede-centralizing budgetary decision- making andaccess,trusting and further empowering teamsto safeguardhealthy financial performance. How willyou makesure that budgets and resources are availabletothe people thatneed them? FAVIuses bottom-upplanning basedon trust towards itsteamstocome upwith realisticbudget requests. In caseof conflicts, representatives of eachteamsort out problems ontheirown. “In the new wayof thinking, we aimtomakemoney without knowinghow wedo it,asopposed tothe old wayof losing money knowing exactlyhow we lose it.” Sun Hydraulics– a publicallylistedcompany – opts for anentirely budget-free approach. “We don’t run this businessby the numbers. The numbers willbe doing whatthe numbers willbe doing; we canjustgive you agood picture of what the next quarterwillbring.” So, we got awayfrom makingannual projections and startedjust doing quarterly forecasts.We know our performance in the long run willbe aresult of just doing the right things every day."
  15. 15. 15 CONTINUOUS STRESS TESTING THROUGH “INDUCED GENTLE ABUSE”
  16. 16. 16 Failureshappenandthey inevitably happenwhen leastdesired or expected.The best defense against major unexpectedfailuresis to failoften. Periodic anddeliberate stress testing will not only getcompanies more resilient against unanticipatedfailure,but willactuallymake companies thrive in sucha situation. How might you defend yourself againstunexpected failure,and learntothrive insuchsituations? Netflixtakesit one stepfurther: the company developed “Chaos Monkey”, a tool that randomly disablesproduction instancesto makesure they cansurvive this common type of failure without any customerimpact. Google andAmazon host GameDays, where failure is manuallyintroduced or simulatedto mirror real-worldfailure, withthe goal of both identifying the resultsand practicingthe response. CONTINUOUS STRESS TESTING THROUGH “INDUCED GENTLE ABUSE”
  17. 17. 17 1. Intrinsic motivation 2. Decentralizeddecision- making or self-management 3. Discretionary resources 4. Beliefin capabilities 5. Continuous learning for mastery andconfidence 6. Stress testing through induced failures What drives us outwards? What binds us together? 1. Shared vision and purpose 2. Shared values 3. Information transparency 4. Talent hiring, grooming, evaluating and rewarding 5. Structure (teams; contracts; circles) 6. Mutual trust and co-dependence 7. Rulesof engagement (templates, brand books, formats)
  18. 18. 18 CONTINUOUS STRESS TESTINGSHARED VISION, COMMON PURPOSE
  19. 19. 19 SHARED VISION, COMMON PURPOSE When the common purpose is createdwithinput fromallof the employees, the organization stays onboard aligned,andfocusedon the right outcome.Itprovides a moralcompass, and givesguidance in situations in whichthe right course of actionis not immediately clear,butin whichthere is no doubt aboutthe desired outcome. Canyou/everyone inyou organization clearly articulatethe keycomponents of the company visionand purpose? How doyou makesure your visionstays“alive”throughout the organization? “Webelieve our first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services. In meeting their needs, everything we do must be ofhigh quality. We must constantly strive to reduce our costs in order to maintain reasonable prices. Customers' orders must be serviced promptly and accurately. Oursuppliers and distributors must have an opportunity to make afairprofit.” Thecompany’s famous credo provides a “north star” forall employees, and corresponding strategy, direction, values, and behavior. The purpose of supporting the great outdoors drives allbusiness activities, beyond the products that itmakes. Patagonia gives profit-shares to environmental NGOs, andoffers paid employee sabbaticalstodrive positive environmental change, engaging everyone toshare inits purpose andvision.
  20. 20. 20 SHARED CULTURE, COMMON VALUES
  21. 21. 21 SHARED CULTURE, COMMON VALUES Empowered organizations have aclearset of valuesand corebeliefsgoverning behavior and performance.Enacting these valuesstarts atthe leadership level.Decentralizationmakesa strong culture allthe more important tocorrectfor the loss of corporate control in decision- making. A culture isfeltandunderstood through experiencesandstories. Stories andmyths area greatwayof ensuring common valuesstay “alive”in the organization. What are the core values andbeliefs thatgovern how people behave withintheir role? Are your core values andpurpose kept"alive"inthe organization? How do you exemplifythese valuesas aleader? Eachandevery employee atZynga (developer of Farmvilleand Words WithFriends) is expectedtofollow the samesimplecore valuein every endeavor: “Beyour own CEO:Own outcomes.” The cornerstone of Nordstrom’s culture is its storytellingculture, whichresolve around “service stories”. Employees are taught that every customer interactionis astory opportunity. These stories, repeatedover andover, eventuallybecoming legends that serve tocreatecohesion, createjoint experiences, andkeepvalues alive.
  22. 22. 22 INFORMATION TRANSPARENCY
  23. 23. 23 INFORMATION TRANSPARENCY “Tomove faster,pulse faster tomore people”.Ensure information transparency through open communication aboutactivities, progress, successandfailure,andlearnings. This is a sharpdeparture from the long valued“information sharing on aneed-to-know basis”. It makessure the people atthe edge of the organization are fedin realtime with allrelevant information they needto make the best decisions. Transparency breedstrust and accountability –the foundations of greatteamwork. How might you ensure information transparency, building trust andaccountability toyour customers andwithinyour team? Inthe mid-2000s, McCrystaldrasticallytransformed his teamcoordination. Insteadof havingcallswith his topcommanders, that wouldthenshare information “down the line”, he organized callswith 7000 people toshare information, allowingpeople toprovide updates and intelin3-minute chunks. Socialmedia marketingcompany Buffer puts radical transparency atthe heart of the organization. They are open about revenues, pricing decisions,user numbers, progress reports oncustomersupport and performance tothe outside world. Internally, they share salary information, createcc-liststoensure open internal communicationvia e-mail,anduse IDoneThis toshare daily improvements.
  24. 24. 24 INFORMATION TRANSPARENCYTALENT HIRING, GROOMING, EVALUATING AND REWARDING
  25. 25. 25 TALENT HIRING, GROOMING, EVALUATING AND REWARDING Hire people whose personal goalsare alignedwith organization goals andmission. To ensure synergy, youshould not only hire basedon personalalignment with company purpose, but alsoon culturalfit–without losing out on diversity. Value-basedgrooming evaluatesand rewardspeople on common values,andculturalfit. How might you hire, groom, evaluate,and rewardemployees toenhance cohesion? Whole Foods offers the right tovote tolocal teams.New hires serve for aperiod of one to three months ona team,afterwhichthe team approves (orrejects)the candidate asa permanent teammemberby two-thirds vote. At Morning Star,employees are part of asocial network that includes areal-timefeedof performance data,colleague activities(andhow it relatestothe organization’s mission),andpeer feedback. People don’t move “up” at Morning Star, they grow inrespect andresponsibility (and compensation) basedon theircontribution.
  26. 26. 26 STRUCTURE
  27. 27. 27 People need some form of structure to worktogether, yet(permanent) structures often leadto silo-ed behavior.Co-dependent teams,or “small fighting units”, allow for product, marketand customer focus.Bytranscending functionalunits, these teams operatewith clearbut fluid structures thatadaptandmorph basedon the needsof the organization andchangesin the environment. Nestedcircles. TernarySoftware uses (nested) circles,with representatives forminglinkagesbetweenthem. Thereisahierarchyofpurpose, complexity,andscope, butnotof peopleorpower.Eachcirclehasfull authority to make decisionswithin the scopeof itsspecificpurpose. Decisionsare notsentupwards, and cannot beoverturnedbymembersof overarchingcircles. Parallelteams.AtZara, creative teams work inparalleltoeach other. Each team isgivenfullresponsibility and autonomy overcertain items– from beginningtoend.Thisallows for incrediblespeedofproduction (from ideationto sales), and market responsiveness.Italso allowsthe company to locallymanufacture its clothesinSpain. What alternativeteam structurescanyou put inplacethat fostercohesion? Rotating cross-disciplinary teams. Vox letstech developers, editorialteams, marketers, publishersandphoto/video departmentsorganicallyform around newopportunitiesinto rotating, cross-disciplinary teams, speedingup,andopting innovative news formats over administrative efficiency and “pipe-line” structures. STRUCTURE
  28. 28. 28 MUTUAL TRUST AND CO-DEPENDENCE
  29. 29. 29 MUTUAL TRUST AND CO-DEPENDENCE Any person canmake any decision afterseeking advicefrom(1) everyonewho willbe meaningfully affected,and(2) people withexpertise in the matter.Advice receivedmust be takeninto consideration. The point is not tocreatea watered-downcompromise that accommodateseverybody’swishes. Itisabout accessingcollectivewisdom in pursuit of a sound decision: with allthe adviceand perspectivesthe decision maker has received. How might you design your team/organizationsothat mutualtrust andco-dependence are fostered and “silos”are avoided? Howcanyou imbedadvice processesin your team/organization? AEScombineshierarchywith advice processes. Employeesconsultthose impacted byadecisionand those consideredexperts.Decisionsare made withthe personwho notices the issue,theperson mostaffected by it,or otherwisesomeonethat the managers believeisthebestperson to make thedecision. W.L.Goreuses circlesmade of representativecolleagueswhogo through theadviceprocesson behalfofthewholeorganization. Team leadersare voted democratically andrepresentthe team inother decision-making circles. Buurtzorg usessocialmediato supportand speeduptheadvice process. Within 24hoursof apost, amajority ofnurseswillhavereadit. Theseposts evokedozens, sometimeshundreds,of comments.
  30. 30. 30 RULES OF ENGAGEMENT
  31. 31. 31 RULES OF ENGAGEMENT Culture and valuescome alive through behavior.Rules of engagement referto “the wayyou feeland act”in any givencircumstance,providing authorization and/or limits, among other things. Itoftenalso defineswhatthe public sees. Apartfroma setof “ground rules”, rules of engagementmay include abrand books, working formatsandtemplates. Canyou formulate a setof guiding principles thatdictate behaviorand actionandkeep your teamunited? How doyou exemplifythese valuesas aleader? Leaders during the Americancivilrights era reliedon a number of techniques tohelp encourage people tojointhe movement and remainunited asone. It took extensivetrainings toprepare civilrights workers for the violence they wouldencounter inthe South. Training includedrole playsand signinga pledge toremainnonviolent. Peace Corps offers a unique experience toits trainees andvolunteers. While the intrinsicrewards of joining are great, the challenges anddemands are many. Tomaintaincohesion and reputation, the organization has a sharedset of togovern behavior, while respectinglocaltraditions and regulations.

×