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Decentralized Decision-Making

No matter how small, medium or large a company is, individuals and teams in that organization make tons of decisions every second. Some of them are made quickly, whereas more time is needed for the others. Independently of this fact, it is critical today for decision-making to be done directly by the people in front lines, knowing if we can decentralize control, we can make our organization better and faster. So what is decentralized decision-making anyway? Let’s explore it.

What Is Decentralized Decision-Making & How to Implement It?

When you look up decentralized decision-making definition in a dictionary, you will see an explanation more or less like this: Decentralized decision-making is described as a process where the decision-makers are located within a larger group. This can be realized in any organization of any size, from local SMEs to giant companies.
As you can imply from this explanation, the decisions arising from a process of decentralized decision-making are a natural result of group intelligence and crowd wisdom. Because they reflect the common view of a whole group not a single person. This, for sure, may have some downsides and upsides and there seems to be three main stages for an ideal decentralized decision-making process to be more effective: clarifying the target, providing rehearsal, and remaining attached. Let’s have a closer look into each!

  • Clarifying the Target: This first step involves knowing what you want and how it fits your corporate strategy. Leaders and the whole team need to understand why a task is done and how it serves the company’s overall objectives. That’s why before decentralizing decision-making, the people working with maximum effort in an organization should be crystal clear about the target demand. The other part of this step includes group thinking, creativity, motivation, and flexibility. Each and every team member needs to be included in the thinking process to find a satisfactory result about the target. Leaders should avoid themselves from dictating or doing micromanagement to help the team come up with their own ideas.
  • Providing Rehearsal: While realizing decentralized decision-making, the team needs to be given an objective to consider. This will help every team member develop a plan and rehearse the version they understand. In the playback stage of decentralized decision-making, you generally give hints about 5 Ws and 1 H of the plan. At certain parts of the process, you can go and give information about “What” you are doing, “When” is the perfect time to do so, “Where” it will take your company,” Who” is the other party, “Which” competitors you need to be careful about, and “How” you do it. This rehearsal lets you be really engaged in the delivery and stay focused.
  • Remaining Attached: Even though the team is doing the “thinking” part with every member, the leaders are still accountable. Trusting their team, leaders are part of the progress and help their team when things go wrong. Briefly, team members are active in decentralized decision-making while the managers are servant leaders to realize the delivery as smooth as possible.

Benefits of Decentralized Decision-Making

Decentralized decision-making examples all around the world have some great benefits for both the organization itself and for the individuals in that organization. Here are the most common advantages of decentralized decision-making:

  • Reduces time limitations on leaderships
  • Gives managers more time to focus on strategy
  • Reduces bureaucracy and bottlenecks
  • Provides speed for fixing operational distress
  • Improves reaction times
  • Helps to create a workplace culture that values expertise
  • Makes employees feel engaged and motivated
  • Enhances innovation and value delivery

Briefly, decentralized decision-making process can be implemented in any organization of any size, and it is today’s new creative way of working. While working on spreading the autonomy, also work on enhancing transparency at the same time to enable synchronization across your whole organization. You need to remember to obtain knowledge, create operational efficiencies of any kind, increase core competencies, and never stop developing the teams. Only in this way, you can succeed in decentralized decision-making, and carry your business high with your quick and rational decisions.