To be effective in today’s global business environment, companies are embracing elements of centralization and decentralization that allow them to act quickly at the local level while leveraging best practices at the corporate level.
Remember calculus, chemistry and American literature? In high school and college, every class had its own instructor and its own unique curriculum, and as students grew more specialized, so did their courses and respective teachers. This is the definition of decentralized learning — dispersing responsibility and control throughout an organization.
However, many companies deviate from this standard and tend to be centralized, where one learning function develops the curriculum for the sales, engineer and support teams. While such a structure eliminates duplication and leverages best practices, the local flavor and nimbleness may be lost.
As a result, no learning plan should have a one-size-fits-all strategy, and pockets of decentralization should be cultivated in even the most centralized strategies, as the need for learning typically has an element of immediacy.
The Dichotomy: Centralized vs. Decentralized
While some may believe these two strategies are mutually exclusive, they can and do operate in harmony at Scotiabank, where elements of both centralization and decentralization are what make the system work.
“Scotiabank’s model is a hybrid — what [Josh] Bersin calls a ‘federated’ model. It’s really the best of both worlds,” said Linda White, vice president of the global performance and learning office at Scotiabank, which offers personal, commercial, corporate and investment banking services. “We are a global company and a highly matrixed organization. This model allows us to be nimble enough to respond to the needs of the business quickly and efficiently. [But] at the same time, because we have a centralized unit, we can make sure economies [are] of scale. We [can] identify and use synergies wherever possible, and it allows us to provide an infrastructure to make the whole thing run.”
In the federated approach, the central training unit provides support to each of the smaller learning units in the business lines, and together they work to develop learning strategies for the bank’s 60,000 employees, who are dispersed across 50 countries.
The strategy mirrors that of the training relationship and is navigated through goodwill and influence, meaning that the independent learning units aren’t required to collaborate with the central office but do because of the expertise it provides.
“Our role is to make sure that there are synergies and some consistency,” White said. “How we make that happen is through influence. I can’t tell [the training units] to give me a learning strategy each year. I have to influence them and show them what the benefit is for them. It’s creating a partnership.”
The central office maintains the big picture — the infrastructure, processes and standards — and the independent learning units work within that framework to develop initiatives that are imperative to their day-to-day operations.
“The people in my team have a deep knowledge in certain aspects of the training process and so they [the lines of business] would come to us for expertise, but we learn from them all the time about what’s really working out there in the business,” White said. “We need to be that bridge between the academics of training and the practicality of the business.”
A federated learning strategy, as is true with any methodology, can never be perfect. With more decentralization comes the possibility of duplication.
“We have a good working relationship with everybody, but there are times [when] it’s hard to know that you’re capturing all the synergies,” White said. “We try to, but there is the odd time [when] there can be some duplication.”
To avert replication, each learning unit creates a yearly strategy based on its needs. Then the central office and the individual learning units meet to share those strategies.
“That’s where a lot of this will come out,” White said. “It’ll come up that two business units [are] working on a financial statement-analysis course, for example, so it makes sense for them to work on it together.”
To Decentralize or Not
Utica National Insurance Group, which offers a wide variety of commercial and personal insurance programs, has a centralized learning methodology, but Cherie Mullen, the director of learning, is considering incorporating some decentralized elements. With 10 regional offices, Mullen is looking at having a part-time training resource in each location. This change would not require any additional hiring. Instead, Mullen would find employees in each office with the necessary expertise and split their time between their current job roles and training.
“There are seven of us on our team, and we look at how difficult it is to reach out to some of our regional locations,” she explained. “We have some expertise in those regional locations that could be utilized throughout the organization for a multitude of topics. I’ve just started to think about how we take advantage of the knowledge that’s out there.”
Mullen believes in the strength of Utica’s centralized system, but having these pockets of decentralization would provide its 1,400 employees with an immediate resource in their respective offices.
“We would be able to have somebody physically there, [who] understands the environment and the market in that specific location, so they could address issues more effectively,” Mullen said.
But she has some reservations about this change, as some training already lies in the hands of the regional offices, and that hasn’t gone particularly well. Each office is currently responsible for its own new-employee orientation.
“We’re finding out that some employees aren’t getting the information that they need,” Mullen said. “Some of the offices are not as committed to it as the others. We’re hearing weeks later: ‘Is someone going to show them how to do this?’ So that’s one of the challenges that we’ve been trying to work through for the past several months, and [we’re] looking [to see if] it makes sense to have that in their hands any longer.”
With this fresh in her mind, the decision to place training employees in each office becomes even more difficult. A thorough strategy would have to be developed so history does not repeat itself, and at the foundation would be communication.
Mullen’s communication strategy would include a kickoff meeting, at which the vision and goals of the new strategy would be discussed. Roles, responsibilities, expectations and a reporting structure would be clearly defined. There would be guidelines for communication and regular meetings with all training employees. Additionally, a community-of-practice bulletin board would be established to avoid duplication and provide a forum for all trainers to discuss ideas and challenges.
But all of this is still a big if, as a lot more thought, research and discussion needs to happen before a decision is approved.
“Right now, we’re taking the baby steps,” Mullen said. “I need to think through how [this] would work before I can seriously be ready to make some type of proposal. There are a lot of benefits that we could take advantage of. But again, [with] the challenges that we’ve seen, we need to make sure that we have the right people in place, there’s specific expectations that are laid out and that there’s a lot of communication. And I think that’s what we’re seeing is lacking today.”
Decentralization in the 21st Century
While the technical definition of decentralization may mean dispersing learning through different business units, a more liberal view can mean delivering learning initiatives across different platforms. Cisco Systems, a leader in networking, has a centralized learning platform but decentralized delivery.
“When I first joined Cisco many years ago, it was centralized,” said Steve Gordon, vice president of learning. “It was a command-and-control structure for training. But over the past 12 years, we’ve been moving more toward a decentralized delivery model, [which means] video on demand, audio on demand and podcasts.”
Cisco’s central learning function works closely with an entity called the Learning Council that is composed of senior executives from the company’s major functions. The council itself embodies aspects of centralization and decentralization.
“Their job is to drive those efficiencies and economies for the centralized function, but also then to bring to bear what their particular organization’s requirements are,” Gordon said. “That way you gain the best of the centralized organization because now you can share resources, learning management systems [and] content management systems, [but] you can also still satisfy the particular local requirement.”
With globalization on the rise, today’s corporate learning strategy has to be a hybrid: The most centralized strategy has to embrace decentralization and vice versa.
“If there are small deviations here and there, you’ve got to have that. You can’t run your business and dictate everything about it,” Gordon said.
Successful Change Management
As with any learning overhaul, success partially depends on how well change is managed. When transitioning from a centralized to a decentralized system, learning leaders should consider communication as key to a smooth transition, as employees may be reassigned, resent the new structure and stall success.
“Let people know as things evolve what’s going on; keep them informed and ask for their opinions,” White said. “It’s also important to honor the past. Change comes about because it’s time to change in order to meet the evolving needs of the business, not because what happened before was bad. No matter what the previous structure, people worked hard and cared about what they did, and that needs to be respected while looking to improve things in the future.”
When Scotiabank shifted from a centralized to a federated model in 2001, White, who was head of training for the bank’s brokerage subsidiary, felt like her voice mattered and that she was a team player.
“I was treated like a client,” she explained. “One of the things that works well with our model [is] that it’s based on goodwill and influence rather than a reporting structure, and I never felt like I was being forced to do anything. I was being invited to participate in something that would have benefits for me. That’s very attractive.”
When Scotiabank moved to a federated strategy, there was change, but it wasn’t drastic, which helped ease the transition.
“It was a change, larger for some groups than others,” White said. “The central group was affected the most, whereas for some of the smaller units, they had a place to go for help that they didn’t have before. One of the positive things was that we introduced our learning management system at that time so we had a concrete project that benefited everyone and that all training units across the bank could get involved in.”
Maintaining a Hybrid
White believes Scotiabank has found the right blend of centralization and decentralization in its model, and they are sticking with it.
“Everybody’s quite happy with the way it is,” she said. “We are going to review our model this year to ensure that it’s working as well as it can be, but we don’t foresee any big changes. There are some aspects of the training function that we might consider centralizing in the future. But overall, we are happy with our federated model, and we believe it’s the right one for Scotiabank.”Filed under: Leadership Development