Unlocking High Performance Through Distributed Authority

In hierarchical organizations, the distribution of power and decision-making authority to those of a lower rank in the organization is generally very limited. In the presence of hierarchy, the underlying belief is that wisdom and the ability to make the right decisions reside primarily at the top. In fact, in traditional hierarchical companies, the organizational chart and the job titles define the levels of authority.?In this context hoarding information is a way to maintain one’s own power, and making decisions becomes a cumbersome process characterized by bottlenecks, disempowerment, and organizational friction. Not to mention that more often than not, decisions are made based not on the best possible response to any given situation but rather on an estimated guess made by someone not directly involved with that specific situation.

In this setting, managers do not trust their subordinates to be autonomous in making the best possible decisions for their division or for the organization. And guess what: they’re right! How could it be otherwise, within a context where information does not flow, is often fragmented, and more often than not is not even shared?

When employees believe that lines of authority and decision-making power are fixed and lie primarily at the top, they will not feel fully accountable in their roles and will never fully engage in their work. Furthermore, they will tend to relinquish responsibility to their superiors, where decision-making authority rests, and un-learn the ability to contribute proactively and with a more entrepreneurial spirit to the common cause.

Moreover, in the absence of distributed authority, there is rarely any honest and open communication. People who feel themselves at the “Bottom” will only tell those who they perceive as “Tops” what they think these “Tops” want to hear, whereas people who feel themselves at the “Top” will only tell those below them what they think these “Bottoms” need to know in order to execute certain tasks. These dynamics set the conditions for disempowerment and low trust, creating a huge gap between business reality and the world of the Tops – which, by the way, is a plague that has hit nearly every large organization that we have come across.

Interestingly, rather than trying to close this dangerous gap by improving communication flows and bringing decision-making power to the front line, the most common action that companies take to address the issue is to implement even stricter control mechanisms. Needless to say, this line of action does nothing but reinforce and perpetuate the very same issue it is trying to fix.

The most advanced organizations, on the other hand, have learnt that the most effective decision-making often happens when the right to make decisions is granted to those closest to the problem. This works if there is trust that people working in the organization will act in the best interests of the company and if all information can be accessed freely whenever someone in the organization needs it.

Thomas Malone, a professor at the MIT Sloan School of Management, says that the cheap cost of communication, be it e-mail, instant messaging or the Internet in general, is making possible a new type of decentralized organizational structure,?characterized by the “participation of people in making the decisions that matter to them”, which really means distributing authority to all employees.

In the AEquacy system, for example, a key belief is that all associates should have the authority to make those decisions that affect their work and that they deem useful for their team and their organization.

??????By distributing authority, aequal organizations put power in the hands of those best positioned to find the right solution. In the aequal environment, people and teams can access any resource they may need to make the right decisions quickly.

Distributed authority also means shifting the responsibility into the hands of every single associate, who takes ownership to resolve issues as issues present themselves. If the issue is too big or systemic each associate can propose the creation of a Project Team tasked with analyzing and resolving the issue.

Of course, the goal in an aequal organization is to optimize the decision-making process by virtue of distributed authority both among aequal teams and to each individual in the organization, AND to do so within a larger system that has the ability to maintain balance despite the substantial decentralization of decisions. The way this is achieved is through the presence of specific roles (Rep-Links and Cross-Links) in the various team meetings, where decisions are validated through the Consent Decision-Making process. This method preserves the autonomy of the decision maker while assuring that the decision being made does not negatively affect other teams and/or the larger organization.

Furthermore, should the particular aequal structure include Coordination Teams, these also become the venue where specific decisions can be discussed and be subject to the consent-based process.

Moving from hierarchy and centralized decision-making power to peer-based coordination and decentralized authority allows everyone to find their unique talents and make their authentic contribution to the organization.

If you appreciated the article and want to know more about AEquacy, please check the website or read the book 5 Principles to Thrive in Complexity

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