Guided Decentralization
What do hospital operating rooms, airplane cockpits, military theatres, and software development projects have in common? And why should this matter to marketing leaders?
All these environments operate at the edge of chaos. We’ve all experienced chaos. You are driving along at the speed limit when traffic suddenly increases, and the freeway is blocked for hours. A tiny bat virus escapes its host and swiftly unleashes a pandemic. Chaos is caused by what science calls complex systems. Complex systems are characterized by many interacting agents, each of whom makes decisions independently. Situations change rapidly. Numerous feedback loops. Many unknowns. Unpredictable.
The marketplace is a complex system. Marketing is about human behavior and well, we’re kind of crazy. The capriciousness of marketing derives from the same type of complex environment as traffic and the natural world. Many interacting agents - customers, competitors, influencers, social networks, partners, regulatory entities. Situations change rapidly. Numerous feedback loops. Many unknowns. Unpredictable.
Complexity is why the most accurate representation of the buyer’s journey is a child’s scribble. Complexity is why a campaign can blow the roof off in several markets then inexplicably fail in New York tomorrow.
Fortunately, marketing leaders can learn what leaders in other complex environments have discovered. Actions are most effective when people can respond as fast as the situation changes. Leaders in complex, fast-changing environments such as operating rooms, military theaters, airplane cockpits, and software development have discovered that success under these conditions depends on the initiative of people who are at the edge, close to the situation, and who are guided by a supporting network.
A medical team in an operating room is an example of an organization built for complexity. Decisions of how to respond to the needs of a specific patient belong to the surgical team. The team consists of consists of different specialists. Although each expert has a unique job, they don’t act independently - they collaborate. Each team member knows their role, coordinates, and behaves accordingly. Each expert on the team shares a common mission – the health and safety of the patient. Behind the scenes is a massive support system ensuring that the care team has the right tools and full transparency of the patient’s context. Despite the complexity of what’s behind the scene at a hospital, what the patient experiences is seamless.
Centralization or Decentralization? Marketing leaders have often asked me whether centralization or decentralization is the right organizational structure for them. The recommendation to push decisions to teams at the edge seems like the answer is decentralization. But that’s not quite right. Decentralization left to its own devices is risky. Independent actors with no links or coordination cause duplication of effort, cost overruns, confusion, delays or paralysis, lack of coordination, and inconsistency.
Early in the 20th century, management expert Fredrick Winslow Taylor realized that decentralization was a disaster for business. Taylor laid down the foundations of became standard corporate operational management. His approach was centralization – the concentration of maximum power and direction in experts at the top. This approach was a practical solution to the real problems of his time, and it was able to rid corporations of much of early chaos.
However, today’s leaders no longer confront the same problems that Taylor faced. We now live in a world of change, not repetition. Leaders who work in uncertain, complex, environments have learned that the right response can’t come solely from the top.
Guided Decentralization
Empower the Edge. Effective action in a complex environment relies on the initiative of people with local situational awareness. For marketers this means giving as much decision-making as you possibly can to those close to the customer: field marketers, salespeople, service agents, partners, and campaign owners.
Centralization vs. decentralization is not a fork in the road where the choice is to take one path or the other. What we learn from leaders in turbulent environments is that our answer requires forging a new path down the middle. Take the best from decentralization – what the Edge knows and what the Edge is good at and support that team with a guiding network.
Guide with a Network. A supporting network takes the best from centralization and guides the Edge teams with essential coordination, services, and assets. This arrangement allows for the diversity, creativity, and local customization needed for appropriate response while reducing the chaos of decentralization.
There are four key attributes of the network’s guidance system.
Shared mission: Effective action in a complex environment requires a simple, clear, and compelling mission. For marketing, this means that everyone must be guided by a common, customer-centric, purpose. A surgical team shares the mission of patient health and safely. If team members had different goals – if nurse thought his mission was to save money, or the surgeon prioritized speedy completion so she could fill her quota – the patient’s experience would suffer. Marketers at a large financial institution understood that their company’s corporate mission was to increase consumer financial confidence. Edge marketing teams made sure each campaign furthered that mission. In complex situations, the Edge’s actions can’t be scripted. However, if their North Star is clear, the mission will keep the team on track.
Radical transparency: Effective action in complex environments require a high-level of trusted, real-time, information. For marketing this means exchanging deep knowledge about the customer context. In his book, Team of Teams: New Rules of Engagement for a Complex World, General Stanley McChrystal describes how he found coalition forces failing in Iraq, despite their astounding force and exceptional planning. Al Qaeda were adaptive. Generals doubled down. Plans got more detailed. Machines got better. But it didn't work. Before the coalition could decide on a course of action, the situation had changed. McChrystal replaced the traditional military hierarchy with a network of teams. He broke down information silos by building a system that ensured that operators at the edge and the intelligence agents back at HQ had full availability of what the other knew.
Agile action: Effective action in complex environments require methods that stress speed and responsiveness. For marketing, this means reducing dependency on traditional industrial-style processes and adopting those that welcome change. Software developers of the past used a highly structured ‘waterfall’ process. First, gather requirements, then code, test, and finally release. By the mid-90’s software projects developed in this way regularly failed because requirements changed in mid-stream. In recognition of digital dynamics, developers invented methodologies that came to be known as Agile. Agile increases speed and flexibility without sacrificing organization or quality. With digital, the cadence, speed, and rate of change has made marketing a lot like software.
Orchestrated collaboration: Effective action in a complex environment requires multi-disciplinary expertise. For marketing, this means developing an interdependent network of specialists. The media mythologized Chesley (Sully) Sullenberger, the pilot who landed a commercial plane in the Hudson River – making him seem like a lone hero. Sully disagreed. He said, ‘I want to correct the record. This was a crew effort." In saving the plane, Sully and his co-pilot showed guts, but they also methodically used a check list to choose steps that safely landed the plane. The pilot guides the specific flight, but checklists guide the pilot. Flying a commercial airliner is a chain of orchestrated tasks consisting not only of people, but also data, technology, content, training, and culture. A checklist is one example of a tool that encapsulates the wisdom and experience of the airplane manufacturers, scientists, engineers, and many pilots, who came before.
Creating Guide Rails with Technology
Responding to the marketplace’s complexity requires the adaptivity and resilience that comes from Guided Decentralization - linking Edge teams to a guiding network. Information technology (e.g., data, MarTech, collaboration and communication applications) serve this system as guide rails. Guide rails direct action. Guide rails at the edge of elevated freeway steer the drivers away from hazards. A bobsled run down a snowy mountain uses guide rails to align the crew to the “ideal” path where the fastest time is expected.
Technology connects. Workflows help specialists collaborate. Technology removes lag time and shortens distances when teams can’t physically be together. It works like a mission GPS, helping people understand how their efforts enhance or inhibit others.
Technology encodes wisdom, embedding it in data, content, applications, and artificial intelligence. These things are the team’s memory – strategies that pioneers have already determined work well.
Technology enables community. Social capital, such as trust, norms, and reciprocity, help diverse groups work together. People who feel attached are more likely to take action that improves the team and the furthers the team’s mission.
You will gain competencies from the strategies of Guided Decentralization that have broader benefit than just within marketing. Our world faces dizzying turbulence, from climate change, to large-scale conflict, and inequality. Speaking to Harvard University graduates in 2007, Bill Gates encouraged, “Don't let complexity stop you. Be activists. Take on the big inequities. It will be one of the great experiences of your lives.”
Leaders in turbulent environments demonstrate a way for teams to be successful in today’s reality. Empower the Edge. Link the Edge to a guiding network with shared mission, radical transparency, agile action, and orchestrated communication.