April 16, 2005


In the Great Debate concerning centralization vs decentralization, folks need to realize there is no one answer. I've long felt that current market needs should dictate how a business is organized. Certainly, McKinsey makes a lot of money telling people to centralize their purchasing to save money via consolidated, larger volume purchasing. (Why anyone with a 2nd grade education needs to pay someone to tell them that ... I do not know).

But conversely, there are times when folks need to be just plain entrepreneurial and feel empowered to go make things happen and meet market needs quickly, changing the world right where they stand.

Here's a great example from a "market" where creative, quick solutions should definitely win out over the plodding behemoth of a bureaucratized centralized procurement organization.
Around the same time, more troops became aware of the presence, and success, of SOCOMs (Special Operations Command) free-wheeling style of procurement. SOCOM personnel were given considerable freedom to find the best equipment and weapons for the job, wherever they could find it. When the Internet became widely available in the 1990s, more military personnel became aware of SOCOMs methods. At the same time, more and more new, relatively inexpensive technologies began to appear. Perhaps the most dramatic example of this is found in the development of micro-UAVs. New materials, digital cameras and wireless communications technologies combined to produce inexpensive (by military standards) UAVs weighing under ten pounds. It’s also no accident that many of these look, and perform, like the small, remote control aircraft, built and operated by hobbyists. The gadget geeks were also building “toy robots” that soon turned into battlefield tools for checking out caves, or possible booby traps. After September 11, 2001, some of these hobby projects were sent off to war. While the traditional military manufacturers scoffed at the idea of hobbyist remote control aircraft being used by the military, the troops had a very different idea. For an infantryman, or Special Forces operator, a five or ten pound remotely controlled aircraft, that could send back live images of what it was seeing over the hill or around the bend, could be a lifesaver.
Of course, matrix organizations claim to be able to provide the best of both worlds ... centralization for scale, decentralization for speed and service. But you do have to be able to pay for those extra folks.