Off the Shelf: Decentralization

Powering Down

This month’s authors are convinced that decentralizing corporate power is a good thing. Now, if only the people at the top would agree.

Edited by Carol Zarrow

The Future of Work: How the New Order of Business Will Shape Your Organization, Your Management Style, and Your Life

By Thomas W. Malone

Harvard Business School Press, 2004, $29.95

During the dotcom boom, the idea was touted often (and breathlessly) that in the future, corporate hierarchies would wither and a newly empowered workforce would make critical business decisions from the shop floor and the field office. While it remains a staple of software vendor pitches and career-building workshops, these days the notion that the rank and file might rule has about the same cachet as Kozmo.com.

Yet decentralization as a management strategy isn’t a passing fad, says Thomas W. Malone. In The Future of Work Malone argues that information technology makes the distribution of corporate power away from the executive suite both inevitable and desirable. It’s now inexpensive and easy to collect and distribute information among many people (including outsourcers). And in case it isn’t obvious by now, Malone reminds us that employees are happier when they have some control over what they do: Managers in a decentralized environment become facilitators, rather than enforcers of rules.

The book describes several models for decentralized decision making, with examples from companies like W.L. Gore (which makes Gore-Tex fabric) and Hewlett-Packard. To his credit, Malone acknowledges that for most organizations, central and distributed management structures will coexist well into the future, and he includes a method for weighing the costs and benefits of managing a process or activity without central control. But the most important part of the book is Chapter 10, “Cultivating People.” Read it first to find out what you’ll need to do as a leader to succeed in a decentralized environment. Hint: You have to give up some power.

-Elana VaronThe Myth of Leadership: Creating Leaderless Organizations

By Jeffrey S. Nielsen

Davies-Black Publishing, 2004, $25.95

“Designing, managing and working in human organizations should be a joyous task.” So begins Jeffrey S. Nielsen’s book exploring the concept of peer-based leadership. In Nielsen’s view, rank-based management?where the few executives at the top make decisions for the many underneath who do the actual work?is not the way to infuse workers’ lives with joy, innovation or meaning. To truly offer a fulfilling (and ultimately profitable) work experience, organizations should be peer-based, with decision making the collective job of the employees who work closest to customers.

As Nielsen points out, many of the ideas he presents about peer-based management have been proposed before, by the likes of Peter Drucker, for example. While he does offer guidance as to how companies can gradually introduce peer-based concepts, Nielsen offers few suggestions for overcoming the real stumbling blocks?the executives themselves. With all the prestige, power and money currently associated with being a C-level executive, it’s unlikely that many will willingly discard the “chief” in their titles and replace it with the adjective “consulting,” as Nielsen recommends.

-Megan Santosus

CIO Best-Seller List

5. Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron

By Bethany McLean and Peter Elkind

Portfolio, 2003

4. The Innovator’s Solution: Creating and Sustaining Successful Growth

By Clayton M. Christensen and Michael E. Raynor

Harvard Business School Press, 2003

3. Guts! Companies That Blow the Doors Off Business-As-Usual

By Kevin Freiberg and Jackie Freiberg

Currency, 2003

2. In an Uncertain World: Tough Choices from Wall Street to Washington

By Robert Rubin and Jacob Weisberg

Random House, 2003

1. Good to Great: Why Some Companies Make the Leap…and Others Don’t

By Jim Collins

HarperCollins, 2001

Source: Data from March 2004, compiled by Powell’s Books, Portland, Ore.