A decentralized organization involves the delegation of authority from the top and middle-level management to lower-level management and team members. It is a method adopted by various organizations worldwide for generating autonomous teams or squads and authorizing them.
A decentralized organization aims at dividing work and responsibilities from daily operations to decision-making powers encapsulating acceptable accountability.
A centralized organization gets the leadership involved even in the day-to-day activities, shifting its focus from decision-making and overall development of the organization. Decentralization grants the senior management the ability and time to focus more on the expansion, and the enlargement of the organization.
Stumbling Blocks for a Decentralized Organization
The quest for adopting a decentralization organization faces major blocks and challenges. The extensive and swift conversion towards an agile organization invites fluidity and instability within the organization.
Risks:
The distribution of power entails a threat to answerability, as it becomes difficult to map out a person being responsible for serious downfalls. However, annihilations caused within an organization affect it as a whole.
While espousing agile ways for working organizations entrust the workload and responsibility to lower-level management, sometimes even to individual teams diminishes the management risk.
Reliance:
After creating independent, and autonomous teams, many products, and services generated within an organization collaboratively rely upon different teams.
Moreover, the decisions taken by one team affect other teams, and the organization as a whole, thus creating a dependency among the teams.
Governance:
An organization involving disintegrated groups or squads faces a challenge with jurisdiction as the senior management has loosened their grip over these independent squads.
Moreover, Independent groups, many a time, fail to focus on the overall development. In turn, squads focus only on the ongoing day-to-day activities and tasks. Without feeling the need to involve better ways for production and the growth of the organization, which fails to eliminate the wastes involved.
Value Stream Management
Value Stream Management (VSM) derives value by eliminating wastes involved in the business processes, and increasing the overall productivity, involving a constant value adding initiative and improvements. It is an operation which administers an organization towards directing, and controlling, all the process involved in the business. Thus, making it a lean management tool.
Value Stream Management enhances the functionality of the work, as it involves all the advanced steps and plans disposed for improvement for current processes and future prospects. It works thoroughly upon determining the value streams for deriving success at a much faster pace than usual, which avoids stagnation of development of an organization.
Value Stream Mapping v/s Value Stream Management:
Value stream mapping is a tool for analytics, however value stream mapping alone cannot be implemented properly within a decentralized organization, as the leadership has given teams the liberty to act in a much freer form, and in-turn ruling out the possibility of completely managing and governing the squads.
Usually, the teams work upon the path as directed by the map, generated after a thorough understanding of the organization. However, after following one particular layout and eliminating wastes, they fail to eliminate the new wastes which keep on emerging from the previously laid out maps, thus making the whole process continuous.
On the other hand, Value Stream Management works upon managing the value stream process continuously and updates the value stream constantly as per the current scenario. Works upon eliminating the reliability of teams upon each other, and sets independent value streams for each squad, and making them free from the dependencies. However, both of these methods focus on eliminating wastes and speeding up the complete business processes.
Moreover, a quintessential Value Stream Management gets achieved through outsourcing to automate the monotonous manual repetitive tasks. Thus, leading towards the achievement of an organization’s goals, and visions.
