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Decentralize to be more nimble

31 Jul

Flattening the organization (i.e., reducing layers of middle management) by itself is not the answer to becoming more nimble. Flat organizations are still steered by the remaining managers and not driven by market pull.

Delegation is a small step in the right direction; however, decisions are still made by lower level managers and not by self-organizing teams nor those closest to customers.

Decentralized organizations, however, encourage decision making at the boundary where customer or market interaction occurs. Learning is fast, decision making swift, and pivoting easy. TJ Maxx is an example – purchasers can make on-the-spot decisions without prior approval or permission from head office. Contrast this with purchasers from other retailers who are bogged down with long-term contracts and have little leeway in who from and what they can purchase. Not surprisingly, TJX is one of the two retailers in the US growing despite a tough environment.

 

 
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Posted by on July 31, 2017 in leadership

 

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