A recent Wall Street Journal reported on how American firms are responding to competitive pressures in the Asian market.[1] Responses include diversifying their products to better meet demand, making investments where they operate, moving more executives to Asian offices and giving those executives more decision-making authority.
Of these measures, the most cost-effective will be giving executives more decision-making authority. By giving the people who work where the information enters an organization decision-making ability, speed of execution, better coupling to the customer’s needs, and greater engagement happen. We call this “pushing authority to the edge.” In other words, rather than transmitting the information to the authority, push the authority to those with the information.
In addition to improved business performance, this practice will result in improved people performance as people will be more engaged, passionate and contribute more of their thinking and creativity to solving the problems. As a benefit, employees will be healthier too. Studies have shown that people with more control in their lives have fewer sick days, weigh less, and live longer.
The trick is to ensure the right conditions are in place that employees on the far side of the earth are making decisions aligned to the company’s objectives naturally, not as a result of micromanagement. We have found that those conditions are competence and clarity. Employees must be technically competent to make the decision and must understand what the company is trying to achieve.
Here’s an exercise you can try if you are in a position where you are contemplating divesting decision making authority. Get your peers together and ask them what would keep them up at night if a decision were delegated to the next level down the hierarchy. Have them write each worry out on a card, one worry per card. Allow a couple minutes. Then, spread out the cards. Let people see what each other wrote, ask questions for clarification and sort the cards into like piles. Those piles are the barriers to getting the most thinking out of your people. Attack those barriers and you will be well on your way to creating an empowered, passionate, thinking workplace.
Competition for American firms in Asia will only grow stronger. Many firms are doing the right thing by giving more decision-making authority to their executives in Jakarta, Tokyo, Shanghai, Singapore, etc. Culturally, this aligns with American social norms of independence and adaptiveness. It will be the next wave in American competitiveness.
For Western firms to compete here, in Hong Kong, decisions can’t be made back in the United States or Europe.
[1] Chu, Kathy. (2013, March 12). Western Firms Rethink Asia Approach. The Wall Street Journal, p. B10.
