For years now, the business world has been moving away from strict hierarchical business models towards decentralized ones. This trend has been accelerated by the COVID-19 pandemic, startup boom, changes brought about by globalization, and, of course, the growth in flex-office spaces. Why choose flex-office space or the better-known cousin – the coworking office solution? Coworking spaces are flexible workplaces that make it easy for businesses to trial decentralization at a scale – and a location – that works for them.
What is Decentralized Business?
Decentralization shifts management and decision-making away from the usual top-of-the-ladder players. It’s a move away from the traditional hierarchical structure of a business and towards a flatter, more egalitarian approach. When your business is decentralized, it’s not the C-suite making decisions, but rather individual teams or even individuals: it all depends on the context, situation, or task at hand.
What does this look like in action? Though not a business as such, the military is an example of a truly hierarchical organization. The entire structure is based on pre-set rankings that report to each other, with the end result looking something like a pyramid. A company like Illinois Tool Works, on the other hand, is completely decentralized. Rather than having company-wide goals and benchmarks, it features some 400 entirely autonomous units whose goal is merely to outperform their competitors.
An example of a business that straddles both structures would be McDonald’s: although individual franchisees are able to exercise some autonomy over local decision-making, HQ governs big-picture decisions.
Decentralization Can Build Your Business
The fact that the world is shifting away from inflexibly hierarchical structures shows that there’s power in decentralization. It’s a structure that has plenty of pluses.
Decentralized businesses are flexible enough to adjust their efforts to suit local markets and needs, which is a major win when you consider the value of localization and personalization in your sales and marketing. They’re also more nimble and able to react to swiftly changing market forces, making their own decisions about how to move forward rather than waiting for word from HQ to trickle down. Plus, they can give individual workers and teams more autonomy across the board, an approach that fosters widespread expertise, innovation, versatility, and interdisciplinary integration.
Additionally, when your business is decentralized, you benefit from risk mitigation. New ideas, products, and services can be trialed without risk to the core business. You can tap into the existing staff to build new skills rather than investing in new hires. This is a major cost-saving measure, especially for newer, leaner businesses. Geographical decentralization also allows you to cleverly direct resources when faced with a weak (or strong) market.
All that said, decentralization does have its challenges. Businesses need to ensure that communication between departments or units is clear and open. They also need to be mindful of the potential costs of redundancy – and the risk that staff may respond negatively to the lack of a clear hierarchy and what it means for their career progression.
Coworking Spaces Help Businesses Decentralize Providing Workspace Flexibility
If your business is looking to take advantage of the benefits of decentralization, a coworking environment can set you up for success. Flexible and adaptable, they allow you to spin up project groups, departments, or even entire local offices almost instantaneously. By allowing these to exist in an entirely separate physical space, coworking spaces foster group autonomy, while also giving workers the ability to tap into the needs and culture of the local market.
Coworking spaces are also anti-hierarchical by nature. There are no corner offices or other markers of intra-company division. When you set up your team within a coworking space, you’re also setting up expectations of egalitarianism and inclusion – which are in high demand with today’s millennial workers.
Critically given the current economic climate, coworking spaces also reduce the risk for companies that are tentatively reopening, expanding, or testing the waters in a local market post-COVID. With businesses starting to safely transition back into the office, now is a great time to consider switching to a coworking space. By working from a coworking space or flexible workspace, your company can direct resources in a hyperlocal way, and make decisions best suited to that locale.
For more information about District Offices’ coworking spaces, COVID safety practices, or how they can help your company decentralize, get in touch!