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.
Our decentralized approach is foundational to who we are and how we operate at HB Global.
This approach is central to how we operate because we know that each division and each customer population is unique. But we also know that as a parent company, HB Global can provide significant benefits to each division, including the ESOP that each division is part of.
We currently have 11 divisions in four different verticals. When we acquire a new company, our goal is for that company to be able to maintain as much autonomy as possible. This isn’t just a sales pitch. This is a commitment we make for the long-term. Whether a division has been with us for 10+ years or just joined, you’ll see a commitment to autonomy and decentralization.
That’s why we established this decentralized approach as one of our principles.
Our Decentralization Principle
“We default to a decentralized approach which allows our operating businesses autonomy to own their responsibilities and empowers employee owners closest to the customer to make decisions within the scope of their role. However, certain functions and decisions, particularly those impacting the whole company are handled at the HB Global level. Our goal is to empower those closest to the work while providing organizational support and collaboration where necessary.”
Why Decentralization Is Important to Us
When our divisions are able to maintain their autonomy, they can continue to lean into what makes them unique in the work they do, the region they operate in, and the customers they serve. Each division came to us with their own set of ingredients that made them successful. We don’t want to change that. We want to support that.
This not only allows operations to continue in a way that best suits that business, but this allows the legacy of the company to live on. That’s no small thing. It helps employee owners feel a sense of pride towards their division and its role in the community. It also helps customers and communities to continue to recognize and support a brand that they’ve trusted.
Furthermore, we recognize that employee owners doing the work closest to the customers know them best. The Radical Autonomy that we practice in our decentralized approach allows those employee owners to make decisions that will best serve the customer, not best serve a directive. Our structure allows our divisions and parent company to learn from each other while creating space for each division to act in the best interests of their customers.
Our decentralized approach also gives us the opportunity to scale as an organization. When we trust each division and its employee owners, our organization as a whole is able to focus on growing, which creates more value and more opportunities for all employee owners.
What Decentralization Means at HB Global
At HB Global, decentralization means each division has the opportunity to maintain as much autonomy as possible. This is true both operationally and culturally.
Each brand is able to maintain almost all operational functions within their division. However, they also get the benefit of being part of a larger organization. In certain cases where it makes sense, HB Global will provide support by housing operational functions like IT and Insurance. This relieves costly and complex operational burdens at the divisions while helping maintain security and reduce risk across the organization.
While each division maintains autonomy, our goal is ultimately to create value for all employee owners, so each division is held accountable to certain financial metrics and goals.
As it relates to culture, each division has the ability to continue the pieces of their culture that make them unique and resonate with their population. However, there is still a level of accountability. Our mission is to make HB Global a place to work, so we strive for each division’s culture to be aligned with the broader culture of HB Global.
Ultimately, decentralization paired with accountability helps us to fulfill our mission of creating value for our employee owners and making our organization a great place to work.
How We Live Decentralization
- Nick Cluff, Vice President of Project Management at DB Mechanical, summed up the advantage of decentralization by saying, “Decentralization means that our company gets to do what we do best. We know our market, we know our customers, and we have been running a successful business for some time, so what HB essentially said to us was that they would let us do what we do, and clear the way in front of us by eliminating some of the repetitive tasks and share resources that can be done efficiently on a corporate scale. There was no slashing of budgets, salaries, or personnel. We didn’t see our company identity swallowed up in a wave of corporate documentation and standards. We were simply and immediately extended trust and confidence that we belonged and were a valued member of the team. That extension of trust is unique, and the ability to see that the risk taken on a division is going to lead to good things takes a vision and culture not often seen in business.”
- Ryan Nash, Division President at William R Nash, explained, “HB has always allowed us, WRN, to run our company in the same manner we have always run it. They, HB, do not tell us who should be the PM on a specific project, or the project superintendent. HB doesn’t tell us who we have to buy materials from, or what software to use for our day-to-day operations. The only thing HB has asked us to do was change the way in which we report our financial information, so it aligns with the other business units to allow for consistency in HB’s reporting to their financial institutions, that’s it.”
Decentralization and Our Core Values
Decentralization is made possible through living our core values. The mentality needed for this approach wouldn’t be possible without them. The opposite is also true. Decentralization also creates an environment where we are better able to live these core values each day.
Trust
Trust is one of the main components of the success of decentralization. For this approach to work, each division needs to trust that HB Global will allow them to maintain as much autonomy as possible and has each employee owner’s best interests in mind. And HB Global needs to trust the divisions to operate in a way that fulfills the mission of being a great place to work and creating value.
Team
To be successful in a decentralized approach, we have to maintain a team mindset. Decentralization is not an excuse for each division to be in an “every person for themselves” mentality. That would harm the overall organization. We need to focus on the whole and keep the best interests of the broader team in mind in order to continue to create value and be a great place to work.
Grit
Decentralization helps to encourage grit in our daily work. It’s hard to be motivated when there’s a lack of autonomy and ability to demonstrate your skills and expertise. Decentralization creates the autonomy for employee owners to operate in a way that they think is best for their work and their customers, which increases motivation and grit.
Growth
Decentralization allows us to scale as an organization. By being able to trust our divisions to do what they need to do to be successful, we’re able to continue to grow as a larger organization. This creates growth opportunities for existing employee owners and creates value that can be shared with all.
Decentralization gives employee owners autonomy to demonstrate their expertise and creativity while ensuring that employee owners and divisions are supported by the resources of a larger organization. The goal of decentralization is always to create a win-win.
Have your own thoughts or questions about the HB Global Decentralization principle? Send them to [email protected].