Decentralised Autonomy vs Centralised Control

In any large organisation there is going to be friction between various competing dynamics; one of which is whether to decentralise certain functions or to centralise them. Sometimes it makes sense to centralise, sometimes it doesn’t. The desire for centralised control is massive, but it’s often better to let things happen organically as they need to.

You can get economies of scale if you centralise, but you become less responsive to local needs because everything has to be done centrally; resourcing will always be the issue (if it isn’t, let me know; I’d love to come and work with you), not enough people to do all the work. The danger then is that the local business unit will just go off and do their own thing because well; they’ve spied a local opportunity that they need to take advantage of, but you know, the computer says no. As a result you’ve lost control anyway, and pissed off the local business unit.

This kind of friction will often become apparent when an acquisition happens. The acquired company is used to doing things a certain way, sometimes their local knowledge and expertise will run rings around your centralised function. In situations like that it’s better to have a loose framework in which things can get done than it is to try and centralise everything. Eventually centralisation will happen, but first you’ll need to build trust and work with them to make sure the centralised function is fit for purpose and that will take time and commitment from both sides.

Whether something is going to be a tactical piece of work or strategic is generally my guide for whether you need to be centralise or not. Tactical things can easily done in a decentralised manner using local development teams, perhaps packaging up for outsourcing. Strategic solutions are going to underpin your business, so you will need to drive different behaviours. Of course tactical solutions may become strategic, you still need to keep an eye on them and review them; if they become strategic, you can centralise then to make sure that development is aligned with the business strategy.

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