The Bottom Line

A centralized organization places an enormous amount of power in the hands of a few. The organization is structured vertically, leading to lengthy decision-making chains where every decision is second-guessed.

In contrast, a decentralized organization prioritizes the opinions of people clo...

Determining metrics and other performance indicators is also simple in this structure since executives aren't involved in every single low-level decision that has to be made.

Instead, they can focus on the big picture and ensure th...

Decentralized organizations work best when responsiveness is the top priority. An organization structured in this fashion also frees up executives' time to carry out more value-added work instead of chasing...

Organizations face employee churn all the time, whether due to a lack of challenging work or dissatisfaction with the company's overall direction. Both of these reasons are interconnected. An inflexible organizational hierarchy leaves employees fighting to impress their managers instead of creati...

While decentralization emphasizes individual empowerment, executive teams also have an important role to play. In fact, executives steer the larger decentralized ship and...

Scaling a business is a tough task.

Typically, a centralized organization has to design new hierarchies and determine the degree of additional responsibility existing executives will bear. All of this results in a slow-moving expansion that often stops before it begins. In contrast, a dece...

The flexibility inherent in the organization also allows employees to choose the work they're most passionate about instead of following a default executive career path. Thus, people who are truly passionate about becoming executives and performing the tasks inherent to these roles occupy the pos...

When expanding into a new market, a fully empowered team can research local norms and inform the broader organization of the steps it is taking to launch the company's products in that market. Thanks to the absence of lengthy approval times, the team can move quickly and establish a presence.

The nature of the workplace is changing thanks to evolving societal attitudes.

While remote work is hogging the headlines, another revolution is taking place in workplaces: Centralization is out, and decentralized 

One of the common problems executives face is a lack of flexibility in their organizations during crunch time. Typically, crises blow up to critical levels before they come to the executives' attention, at which point they must personally intervene. Ideally, crises should be nipped in the bud, an...