ITx Coffee # 2: Strategic centralization, Operational decentralization
Beware of the temptation of excessive … and permanent centralization
Point of view of Christian Saint-Etienne
From this point of view, Christian Saint Etienne offers us the first lessons he draws from the Covid crisis, first of all health, then economic, in which we are now struggling: that of a return to excessive centralization.
Because the usual reflex, in the face of such a crisis, is to entrust its management to the highest level of the State and to leave it equally to the management, monitoring and even implementation. Then to keep this Jacobin organization, even after the said crisis has passed.
However, if central coordination is absolutely necessary, operational management, like day-to-day management, must systematically stay as close as possible to the field, otherwise they will lose all effectiveness.
The crisis caused by Covid-19 is incredibly serious. Production could fall by 7 to 8% in the euro zone and by 9 to 10% in France in 2020, with the rebound hovering around 4% to 5% in 2021. Public debt could reach 120% of GDP at the end of 2020 in France.
The submerged state
France is already crushed by the weight of public spending which is proving, moreover, inefficient. In 2019, the last year before Covid-19, public expenditure reached 55.6% of Gross Domestic Product (GDP) in France against 45.5% of GDP for the average public expenditure rate in the other countries of the euro zone and 45% of GDP in Germany alone. However, this difference in the public expenditure rate of 10 points of GDP does not produce a positive effect: the unemployment rate is double the German rate in France, the youth unemployment rate is double that of adults in France. that these rates are close in Germany.
Germany remains a great industrial power at the start of 2020, while France has allowed itself to deindustrialize without reacting for twenty years. France spends more as a percentage of GDP than Germany on health – yet it only tackled the health crisis with 5,000 intensive care beds compared to four times more in Germany.
The French state is obese and hierarchical. Massive mask orders do not occur until March 21-23, 2020 because the Commission set up for orders wastes three weeks in March defining procedures that will, moreover, malfunction because the Commission wants to stay as close as possible code of public orders while orders in China seem to obey the code of the “Far West”.
The only way to rebuild the state is to start from the territories by revalorizing the role of the communities of communes and that of the regions which succeeded in obtaining better supplies from China than the state! The current 35,000 municipalities are all grouped into 1,250 intercommunalities that can be renamed “metropolitan municipalities” and which correspond almost perfectly to the areas of life in which the French live. A living area is a territory in which 80% of its inhabitants live, work, educate themselves, take care of themselves, have their cultural and leisure activities. Each metropolitan municipality should produce a 6-year strategic development plan, updated every 3 years, covering all these areas of action in the living areas. These plans would be coordinated and made consistent by the regions. The state must concentrate on its functions as a sovereign state and a strategic state. It must coordinate regional plans, relaunch industrial activity and help provide the country with the instruments of sovereignty necessary to function in a world of very tough competition between States. But he must stop wanting to do everything, often badly, and in any case less well than the operational actors in the territories.
The inoperative hierarchical and centralized company
We find the same organizational problems in companies. Overly centralized companies cannot adapt to each field of competition, where operational staff are closest to constraints and opportunities.
Only decentralization allows the necessary responsiveness to competition, on condition that the central functions of finance and purchasing, strategy and control are effective.
The demand for autonomy on the part of citizens and workers, while participating in a collective project, can be part of the liberation of collective intelligence.
In liberal democracies, as in companies and administrations, the demand for autonomy, while organizations must evolve at least as quickly as their environment, requires to operate overall movements that are desirable and understandable by all. as by parts of organizations. As the change accelerates, the objectives and the means implemented by organizations must constantly evolve, while ensuring that the movement implemented makes sense for the whole and the parts.
We must therefore succeed in moving together while being more effective on each playing field. The only way to achieve this is through the combination of exemplary leadership and a strategy understood and shared at the global level and in each operational unit. . It is within this strict framework that decentralization at the operational level can succeed.
Even as organizational goals change, adaptation movements must each make sense. This is only possible by appealing to the collective intelligence of members of groups or organizations on the move. By empowering the actors and making them share the objectives that can be jointly determined, we ensure that the change operators understand the meaning of the change at work. Because what is problematic in change is not movement, but movement without meaning.
We must choose the system most able to promote change with a shared goal, each movement of change finding its meaning in action based on collective intelligence expressed in empowered delegation of power.
Conversely, in the universe of the digital revolution and the raising of the level of training of worker-citizens, hierarchical organizations prohibiting the autonomy of actors can only lead to the disaster of authoritarian archaism.
While any organization requires leaders who can motivate the troops ’for a shared purpose, that purpose can only be achieved by fostering the empowered autonomy of all members of the organization. The demand for autonomy is general in the economy and in society. It must structure the transformation of the political and economic system and of the social contract.
Economist, University Professor, Policy Analyst
Christian Saint-Étienne, born October 15, 1951 in Aubenas (Ardèche), is a French economist, academic, analyst and politician. He has been a professor of industrial economics at the National Conservatory of Arts and Crafts since 2009. He is the author of numerous books including “Le libéralisme strategège” (Odile Jacob) in which he takes up the theses of the present by developing them. article.
In November 2018, he published “Trump and Xi Jinping: The Sorcerer’s Apprentice” (Observatory Editions) in which he analyzed the competition for world domination between China and the United States.
The opinion of the ITx Partners expert
Christian Saint-Etienne invites us to take a step back from centralization, which remains a temptation in many organizations (whether state or private) but which generates both costs and inevitable structural inefficiency.
He nevertheless underlines the need for effective coordination of sovereign functions and for a more local operation. Further centralize the strategy to better decentralize the operational. This is the key to efficiency and the guarantee of optimal and above all controlled operation.
From an information systems point of view, this prompts us to rethink digital architectures in order to leave more autonomy, resources and freedom to business departments, users and employees – while maintaining a sufficient framework. strict to meet compliance, safety and performance requirements.
The recent confinement has shown us how important it is to give everyone more possibilities to telework in complete autonomy; to use digital tools to decentralize operational processes and make them activatable in all possible environments outside the company.
It is about giving everyone the power to share information as quickly as possible, disseminate it easily through simple tools, bring added value without altering it, all this by using, via the Internet, services both shared and secure.
In short, information systems must be adapted, opening them up not only to direct employees but also to the entire business ecosystem, suppliers, subcontractors, customers, all of whom contribute to the creation of value. Including for often critical business applications.
Obviously, this cannot and must not be done at the expense of security, data confidentiality, respect for private life and the protection of intellectual property. Hence the need to consolidate the processes for standardizing infrastructure tools (identity, security, collaboration, etc.) and urbanizing data / application interfaces. Solidify the sovereign processes to give more flexibility to the operational in the field, outside the company as well as within the company.
To face the post-Covid era, no company will be able to do without a fundamental reflection on the capacities of its digital infrastructures, or even a complete overhaul of its IT architectures. These will have to be strengthened, reconfigured, opened and more secure to adapt to the new situation. First, CIOs will have to regain a transverse visibility that they often lack, of their IT services, their effective utilization rates and their costs of ownership.
You will never be able to manage your information system like before.