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Why Decentralized Decision-Making Is So Important, with Alex Vergara

Cofounder of EarthFund, Alex Vergara, recently joined Jonathan Westover on an episode of Human Capital Innovations Podcast to discuss why decentralization is so important and how organizational leaders can leverage it in the future of work.

One reasons that decentralization is so important is that “... [i]t’s pretty much impossible to pivot quickly [to adjust to market or world events] in a healthy, meaningful, sustainable way when you have a centralized, hierarchical organizational structure.” Many companies are seeing the increased demand for remote or online jobs and it is very difficult to adjust to that change in demand from workers if there is a firm hierarchical structure in a company. Decentralization changes that, and “... allows for very quick decision making…” when it comes to changes in a company. “We’re living in times that are very fast moving and if we can use [different tools]... to make sure that we’re making solid judgments but moving quickly and expeditiously, then why wouldn’t we use it?” Decentralizing is one of the potential tools that companies can use.


Alex puts it this way: “If it’s the CEO [that makes all the decisions], everything has to run up the hierarchy to the CEO, to the C-Suite. Decisions are made, then push[ed] back down the hierarchy… you’re just playing games of telephone, right?” Companies who have changed the type of organization they use for their company, “... were able to, in real time, see the needs and address them. And that just leads to higher levels of engagement and better outcomes for the organization and for the individual.”


When it comes to beginning the decentralization of your company, Alex suggests that we should “...[p]ush down decision making autonomy to lower levels, even to line levels with people who are interfacing with the product or interacting with the customers.” This allows for the company to respond faster and more efficiently, which leads to the greater success of the company overall.


You can listen to the full episode at innovativehumancapital.com/podcast, or anywhere you listen to your podcasts, just search “HCI Podcast”.


Read the full transcript below: