Heads or Tails?

When I’m looking at a process, it often seems like there’s more than one way to approach aproblem – without a clear-cut “right” or “best” solution.One of the issues that seems to be a frequent”let’s-flip-a-coin issue”is centralization vs decentralization, specifically related to decision-making.

In some projects, a particular process has been decentralized – the rationale is remaining close to the customer, using just-in-time deliveries, allowing for the uniqueness of a variety of environments (geographic, cultural, or what have you). Local sites may come up with different solutions for the same problem. When we go in to facilitate a project, often we hear the project team and/or leaders call for “standardization across sites,” “accountability,” and “reduction in over-processing waste” meaning centralization of authority for processes and changes.

In other projects, a particular project has been subject to a central authority – the rationale is to maintain standard work andaccountability. Local sitesmay nothave the flexibility to address unique customer issues. When we go in to facilitate a project, often we hear the project team and/or leaderscall for “delivering on CTQs that vary with our customer base,” “reducing hand-offs and unnecessary approvals” and “agility” meaning decentralization of decision-making.

It seems that both sides have good arguments. I’ve tried to get teams to consider the “think globally, act locally” concept but have run into opposition from both sides.

Would anyone care to share his or her experiences on either side of this coin?

Comments 5

  1. Sue Kozlowski

    I used to blame people who didn’t want to change – called them change-resistant, etc. Now I understand better that for many people, their approach is just to wait it out. If we centralize today, soon there will be a new consultant or new CEO who will want to decentralize. Don’t care for that? No problem – just wait until the next fad comes up, and we’ll centralize again.

    When I see projects where this will be an issue, I try to address it by asking the folks how many times they’ve seen change come & go – and discuss the differences with the Lean Six Sigma approach – that we expect further change down the road as we grow our capabilities and respond to the market (and try to keep ahead of market trends!). When we explain the concept of continuous improvement in this way, it seems less like the flavor of the month and more like a long-term operating philosophy.

    But the experience is still out there – that employees can be successful by using a wait-it-out strategy – so it’s something I’m careful to look for in my project teams in order to address it, get over it, and move on.

    Thanks Taylor and J for writing.

  2. Taylor

    Sue, you bring up some very good points. Having spent most of my career in corporate America, I can say that I’ve heard many of the key points you bring up above, depending on who’s making the argument. What usually goes with it is an equally ambivalent cost evaluation, that could be swayed either way as well. I have no answer, but I do agree and hope someone else does! Taylor

  3. J Considine

    The same could be said of companies looking to enter different markets, and wondering whether they need to re-name products, tailor marketing messages, etc. The answer to the question is always "It Depends."

    The point is that these tradeoffs aren’t unique to SS. Misguided standardization has caused a number of memorable flubs, from the Chevy Nova in spanish-speaking countries (No va means "it doesn’t go" in spanish) to the failure of baking products in the Japanese market (they don’t have ovens).

    Wouldn’t it be refreshing for companies to be able to live with both standardization (where it makes sense) and decentralization where it makes sense, i.e. where the customer demands it?

    The other question is, can you truly centralize in a decentralized environment? Corporate could try to push down standard processes, only to find that the local inertia is more powerful.

    Sorry – no answers, just more questions.

  4. systhinc

    The truth of it all, is that it does "depend". Business situations change rapidly. Markets,customer bases, technologies, and the *$&%ed stock market either "require" or want something different everyday and CEOs are forced by boards of directors to provide it. The single greatest problem in corporate America is the stock market and our dependence on its current notion of "attractiveness". We buy and sell companies, enter and exit markets, and disrupt countless human lives in order to sell stock, because, "it depends".

  5. Jerome Alexander

    When will they learn that all management fads have a limited life! There are no "silver bullets" and no substitutes for good smart work. Worse yet is when some consultant tries to evangelize the workforce into believing in some "new religion" replete with its own rituals, icons, and Bibles. It’s all intended to convince the masses that their attitudes about pay cuts, grueling schedules and idiot managers are wrongminded. God forbid (the real one)that anyone ever gets on the wrong side of one of these "prophets" by having an original thought or by daring to question the doctrine. Remember the Spanish inquisition? What an insult to the intelligence of employees and good managers.
    Successful organizations innovate. They are honest with their workforce and respect divergent opinions. They do not need to use goofy gimmicks and play games with employees’ psyches.
    In fact, there is really only one thing that all successful organizations have in common – they are successful. Excerpted from "160 Degrees of Deviation: The Case for the Corporate Cynic."

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