The word “centralization” has come under fire recently, but centralizing isn't all bad. Actually, some things need to be centralized at work. Let's talk more about it in this article.
When we mention centralization, we mean that a certain process or task has a center. Note that we’re not talking about centralized management but about process centralization.
With a centralized management model, decisions are made only by the executives at a company. This is where most of the criticism of the word comes from: in the decentralized management model, there are specialists who make decisions too, whether they’re leaders or not.
In terms of management, especially to encourage autonomy on teams, there has been a lot of talk about the decentralized model—and rightly so. But what about when we refer to the means of communication, processes, and project platforms? Here, the word centralization looks much better, doesn't it?
When we debate centralization and decentralization in general, we should consider other advantages and disadvantages, not considering only the management model. That's what we're going to talk about here.
When centralization brings advantages
Yes, centralization has its advantages. When we think of business processes, for example - it's crucial to have a single source of truth about which process to follow.
What about communication among company employees? Does it happen by email or by chat, and in which situations? Is it synchronous, or asynchronous? This is another centralized decision opportunity.
A centralization of process formats, communication channels, and visualization of the progress of projects or tasks, unlike centralized management, is something very beneficial:
- The team gains greater efficiency because it doesn’t depend on replies from other people to be able to act.
- With standardization, it's possible to maintain levels of productivity and quality more easily.
- Knowing where to look and who to talk to ensures greater visibility for all project stakeholders and greater confidence to act.
This type of centralization gives the team more detailed guidance so that everyone rows in the same direction without getting lost. But where should you apply it?
- Business processes: Learn all the company's processes and standardize them. Having a centralized digital point of reference is important - a platform like Qntrl can help!
- Operations: Concentrate information about the operation in a single point as a source of truth and a learning guide for the entire company.
- Strategy: It's useless for each team to have a different strategic objective. A company goal is important, and all teams must be aligned. The strategy needs to be centralized, and each team must do its part to reach the same goal.
- Internal communication: Centralization here means having official channels and selected formats. Anyone can get lost if each person uses a different channel and does it their own way. This helps you understand whether you should use (or preferably not) a personal WhatsApp account for official communication.
Challenges of work centralization
Remember what we said about centralizing management? This is where you should consider decentralization. When decisions and visibility are centralized, those furthest from the top end up lost.
This limitation leads to:
- Loss of autonomy, leading to longer and more cluttered processes
- Bottlenecks in production, with the bureaucratization of processes
- Team immobilization, with a drop in innovation and productivity
- Less diversity in decision-makers
- Work overload on leaders, with no time left to spend on strategic decisions
When it comes to giving freedom and making work more flexible, remember that giving power to the team and decentralizing brings greater engagement and agility, yielding better results.
When to centralize and when to decentralize
Now that you've seen the pros and cons of centralizing and decentralizing and when to use each format, it's important to point out that balance is the key point of this conversation.
Centralized management can lead to more bureaucracy and obstacles, but that doesn’t mean that nothing should be centralized. It's important to understand what certain aspects of centralization can do for you in cases where standardization is important.
The decentralization of decisions, on the other hand, can take you and the business much further, and at that time, it's important to know how to delegate.
So, when thinking about centralizing or decentralizing, ask yourself:
- Which model can yield the best results for the company?
- Will this maintain the levels of excellence sought and achieve necessary standardization?
- Is this essential to give autonomy to the team, so they can work to the best of their abilities?
- Will this ensure visibility so everyone knows when and how to act?
- Is communication still clear, open, and transparent through the correct channels?
With the information in this article and by asking yourself the questions above, you can have more clarity about what will be best for your company. But no rule fits all — it depends on the moment, size, objectives, and culture of each one.
Once decided, communicate with the team and train them so that everyone knows what to do, how, and when. There's nothing like a well-informed team to achieve great things.
Have you already thought about which advantages centralization could bring to your company? Tell us!
