Category Archives: decentralised system

Principles can solve the centralisation – decentralisation puzzle

Bureaucratic organisations like things to be controlled. Rather, they like things to have the appearance of being controlled. As a result they like to create rules and policies that have a one size fits all look and feel about them.

Governments are bureaucracies. It makes sense given they are funded by tax payer dollars and therefore need to be accountable.

They generally have limited funds and are therefore constantly trying to control how money is spent to ensure that it isn’t wasted while also ensuring that every cent is properly accounted according to their rules and policies. This attitude to controlling money tends to spread to all operations of government. All policies and rules tend to be centralised.

In this context governments tend to be highly centralised in the way that they operate.
In reality, such centralisation doesn’t work, not on its own anyhow. I have recently been working with a government organisation where the frontline employees have informed me that many of the rules that are applied to their part of the organisation are not applied in practice and that an informal system exists to “get things done”, and to work around the rules and policies. They have informed me that the reason they do this is that while the rules and policies might make sense for some parts of the organisation, in reality they don’t make sense for their part of the organisation. They believe that the rules and policies are impossible to implement while also being financially responsible, so they have created their own way of working around the rules so that they, once again, can, “…get things done.”

What has been interesting about my recent work is that the employees recognise that there are dangers with the informal system, particularly as they relate to people with power who may be the ones deciding what policies get implemented and which ones don’t. While they have reported that the informal system works well most of the time, they recognise that sometimes it doesn’t ‘work’ at all.

This highlights that while bureaucracies believe that they have a centralised system, a de-centralised system, the informal system, also exists. Dr. Dave Snowden from Cognitive Edge calls this the realities of a complex adaptive system. The world is not 100% ordered as a bureaucracy would like it to be. The existence of an informal system highlights that the world of a bureaucracy is not as ordered as it assumes.

So how should a bureaucracy manage such a situation? It wants everything to be centralised, has established rules and policies to establish centralisation, but the existence of the informal system means that, in fact, everything is not centralised. Local departments and teams have established their own rules, meaning that there is a strong element of decentralisation in the way the organisation operates. While the decentralised system works most of the time, it is open to misuse which could place the bureaucracy at the mercy of the very risks it is trying to control through its centralised system. What a dilemma!

One way to manage this system is for the bureaucracy to identify which policies and rules aren’t, in reality being applied across the entire organisation. There will definitely be a lot of rules and policies that are being properly applied across the entire organisation, so these also need to be identified. In other words, the bureaucracy needs to identify which centralised policies are working at the local level, and which ones aren’t.

For the ones that aren’t working at the local level the evidence will be that different informal systems will be operating at the local level to fit the needs of each local area. Across the entire organisation there will be a range of informal responses that have been created by the various local departments and/or teams within departments to ‘work around’ the rules and policies.

There is no use pretending that these informal systems don’t exist. So they need to be acknowledged.

The bureaucracy then needs to identify the principles that can provide the guidance for local departments and teams to then devise their own system that ‘works’ for them. This means that the bureaucracy will have consistency across the entire organisation (provided by the principles) while also having a decentralised response at the local level. Such a system also reduces the risk that the informal system may be abused by local leaders who have the power and authority to do so.

As an example let’s look at a typical work from home policy. In an effort to be seen as  flexible workplaces, bureaucracies often create policies that enable staff to work from home. While some departments find it relatively easy to implement such a policy, other departments find it effectively impossible because of the ‘hands on’ nature of their work. As an example it is pretty difficult for a garbage collector to do their job working from home!

In this example the centralised policy doesn’t work. In fact, it causes problems because the employees know that the policy exists but also know that it won’t be implemented in their department. So they rightly wonder, “What’s the point of the policy if we can’t use it?“.

What if the bureaucracy was to create a set of principles for workplace flexibility? Some of those principles may include:

  1. A range of flexible workplace options, selected from the approved list of options, must be available at the local level;
  2. Local teams must be involved in the selection of the range of flexible workplace options that ‘work’ for them and support rather than hinder local workplace performance and financial accountability; and
  3. Employees have the right to discuss flexible workplace options with their supervisors that fit the above criteria.

Such a system provides the best elements from the centralised view of the world, while also embracing the best of the decentralised view of the world. Each department/team would need to be able to show how they are implementing the principles and would need to provide evidence that the principles are, in fact being implemented.

The result. Organisation wide principles that are being implemented across the entire organisation. Yet the exact implementation of these principles would vary across the organisation depending on the needs of the local teams. As such the bureaucracy would have the best of both the centralised and decentralised views of the world.

Gary Ryan provides consulting services to enable organisations to move beyond being good.

Gary Ryan enables individuals, teams and organisations to matter.
Visit Gary at http://garyryans.com