By Mike Smith, Managing Director – Direct, Virgin Media Business
Welcome to the era of decentralised business. In this new age, all employees are encouraged to contribute to daily operations and decision making, regardless of their seniority.
Commentators are hailing this as the model of the future because of its potential to transform the prospects of employees and customer relationships. By breaking down hierarchies and sharing knowledge in powerful new ways, organisation can decentralise to benefit both staff and customers.
But as we’ll see, it’s the invisible tech – the networks at the centre of businesses – that truly hold the key to decentralisation.
Breaking down hierarchy
What’s so bad about hierarchy? Many employees just aren’t that keen on receiving directives from a distant leadership team that they rarely see, preferring team-based ways of working.
APWC study showed over a third of employees want their organisations to invest in innovations that specifically enhance collaboration – not just when it comes to everyday tasks, but strategic decision-making as well.
Employers sticking with rigid, top-down structures are also unlikely to perform to their potential. Stanford Business School found that more egalitarian teams “were able to work together”, while the dynamic within hierarchies tended to be negatively competitive, with employees trying to undermine each other rather than strive towards a common goal.
When decentralisation prevails, employees have the power to shape the direction of the business through technologies that encourage interaction between people, such as videoconferencing, document sharing and remote access.
These ensure that every employee – no matter their background or seniority, whether they’re extroverted or introverted – has an equal voice. Of course, this tech needs to be combined with a democratic approach to decision making, but they certainly have the potential to create a more collaborative environment.
Supporting these technologies is the next-generation networks which channel information between buildings, employees and data centres in the fastest and most secure way possible. Without them, none of this would be possible. But by connecting everyone in a single, virtual community, networks serve as the antithesis to hierarchical, centralised ways of working.
Being transparent with customers
The next step towards decentralisation is transparency with customers, spreading knowledge and intelligence in a way that builds trust. We don’t just mean being honest about when a mistake has been made. That’s a given.
We’re talking about what the Harvard Business Review has termed“operational transparency”, where an organisation opens itself up to customers in a way that makes its knowledge and intelligence accessible to all. Admittedly, there’s a risk of inviting scrutiny, but when executed in the right way, businesses can reap rewards.
Why is operational transparency a decentralising force? Because it’s about organisations opening themselves up and spreading information about their operations among their customer base – representing a decentralisation of knowledge and expertise.
To investigate the impact of operational transparency, the London Business School looked at patient experiences at a hospital in India. Its experiments focused on glaucoma treatment, the second leading cause of blindness, affecting around 12 million in the country.
The experiment compared patients going through standard appointments in a conventional format with an innovative, more transparent approach to care. A proportion of patients were able to view what the doctor could see when examining the eyes of other sufferers and listen in on the questions asked. These individuals were more engaged and satisfied with their medical experience and more compliant with their prescriptions than those who experienced the traditional appointments – highlighting the effect that openness can have on perception.
A well-known example from the business sphere is Domino’s Pizza’s tracking app, enabling customers to follow their pizza as it is being prepared and transported. The brand continues to lead the way when it comes to “operational transparency” in the fast food industry, with the app holding a 4.7 out of 5 rating on the Apple store, based on reviews by over a million people worldwide.
Why does it work? Because it takes a process that for many years might have felt a bit frustrating – as anyone who’s waited hours for a takeaway delivery would know – and makes it fun and interactive. Customers get to see what’s really happening, making the wait a little more tolerable.
How do Domino’s do it? By investing in networking infrastructure that allows them to record and share data securely and seamlessly. Networks are the fuel for transforming consumer journeys, providing the speed, scalability and security a business needs to usher in a new era of operational transparency.
Taking the first step
On the surface, the decentralised organisation might feel like a distant dream to a busy CEO coping with complex, everyday challenges – but taking the first step is actually straightforward.
Investing in infrastructure sets up an organisation to kickstart the process, providing the scalable and secure foundations it needs to redistribute information, foster collaborative working and empower customers.
And crucially, a business doesn’t need to rip out their legacy systems to decentralise. By choosing the right technology, they can ensure that extraordinary outcomes are set in motion by small, incremental changes.