Disclaimer: These communications are intended for the employees of HB Global. We recognize that the general public will have access. The views expressed in these communications represent Bob Whalen in the context of HB Global and may not apply to broader audiences.
At HB Global, we default to a decentralized approach. That means that, whenever possible, we want to allow our divisions to make the decisions that are the best fit for them. While there are some times where the holding company will house some functions and decisions that impact the whole organization, we know our divisions know their markets and customers best.
Furthermore, decentralization also means that we try to encourage decision-making throughout the organization and as close to the work as possible. This allows all employee owners to demonstrate their expertise and innovative thinking. When we move decision-making as close to the customer as we can, we provide truly valuable solutions from engaged employees that generate continuous value for our company.
Why Decentralization?
We’re people-focused at HB Global. Our mission is to make HB Global a great place to work and create value. A decentralized approach helps us to achieve this.
As larger companies start to make decisions in a centralized way, they face the challenge of becoming disconnected from the varying needs of the local markets and industries specific to their business. It can be difficult for someone in a different location to relate to the specifics of the region, and it can be difficult for someone who doesn’t have their boots on the ground regularly to relate to day-to-day challenges. Centralized decision-making can also become quite hierarchical.
All of this eats away at employee morale and motivation. No one wants to have their job dictated by someone who isn’t experiencing what they’re experiencing. Decentralization helps to harness the full power and potential of the workforce. It allows employee owners to be able to showcase their expertise, add value where they can, and be creative with solutions.
Decentralization also aligns with our employee ownership structure. At HB Global, we view all employee owners as partners, and we want the culture to reflect that of broad-based ownership. By allowing more people to make decisions within the scope of their role and as close to the work as possible, we allow each employee owner opportunities to add value and input that will ultimately be shared back with them. Every employee owner is important to the value creation that is shared throughout our organization.
Lastly, decentralization works well within our industry. Mechanical contracting has a tendency to be a local business. Our division leaders and teams know the details of their markets and customers best. By allowing them to make decisions aligned with their market, region, and teams, we create more value, more motivation, and more satisfied customers.
Unity of the Parts and the Whole
Decentralization is an important part of Radical Autonomy. It allows for decisions to be made throughout the organization as close to the work as possible. Without it, the default would be for centralized leadership to make all the decisions, which would strip away autonomy.
However, just like Radical Autonomy doesn’t mean every person for themselves, we still want to make sure we have a unity of purpose and are all headed in the same direction, even though we have a decentralized approach. We still want to make sure that all divisions and employee owners are aligned with the overall mission, culture, and standards at HB Global.
We have certain principles in place for the whole HB Global organization, such as our core values and financial goals, that act as guideposts so that the parts continue to align with the whole. Within those guidelines, our divisions have the autonomy to make the decisions that are aligned with their customers, market, and culture. For example, we want our divisions to embrace their unique culture, but this still needs to be aligned with the mission, vision, and core values of HB Global.
The Importance of Balance in Our Structure
Our goal is to default to decentralization whenever it is in the best interest of the organization. But there are some functions and decisions that do live at the holding company (HB Global) because they impact the entire organization and could have major adverse effects if not implemented consistently. Some examples of this are Risk and Cybersecurity.
Because we are still one organization, a major adverse event could have a significant negative impact on the value that has been created by the organization as a whole. We want to protect and grow the value created by all employee owners.
On the flip side, if we realize that some system or process is crucial for the good of our people, such as safety protocols, we will implement that as well to ensure we’re keeping HB Global a great place to work, looking out for our people, and creating value to be shared back.
We encourage our divisions to share knowledge and best practices with each other. If there is a process or a program that works really well for them, we hope that they will share that with their peers. We give the divisions the autonomy to take what makes sense for them and leave behind what doesn’t. It’s all about balance.
The need for this balance also highlights the importance of having both a strong leadership team and strong technical employee owners. We all have our own areas of expertise, and we respect what each individual brings to the table. We need all areas of expertise to have success within our company. Creating a balance allows us to utilize all knowledge and skills.
Have your own thoughts or questions about decentralization at HB Global? Send them to [email protected].