Breaking Free: Abolishing the Outdated Head Office Concept for a Brighter Future

Independence! Why can’t everyone be free? Certainly, everyone deserves to be free; after all, it’s a human right. (Let me quickly mention, though, that I believe that there’s nothing like absolute independence. Any who seeks absolute independence rebels and ends up not finding that freedom anyway. I am more interested in its relative use or sense).

The quest for this right was what led to the wave of independence across Africa in the 50’s and 60’s. And since then, Africans have demonstrated how much they value and cherish their independence by commemorating that event every year.

In the animal kingdom, birds for instance, take care of their hatchlings by providing them with shelter and food. The dexterity with which birds undertake this task instinctively is marvelous. When the time is ripe, parent birds teach their hatchlings how to fly. Eventually, these also learn to fend for themselves and leave to start families of their own.

Similarly, every young person loves to have some independence. While some parents find this unpalatable, when teenagers seem to seek independence, they are only expressing a natural inclination that the Creator has put in each one of us. It is this natural phenomenon that enables us to eventually leave home and start families of our own.

Thus, if properly guided, youths with that desire grow to become socially responsible adults and are able to function properly in society.

From what nature teaches us, then, the benefits of proper independence are enormous. And independence contributes to ‘making the world go round’.

That same sense of independence, if properly weaved into the corporate culture, would go a long way to unleash creativity and nurture growth–it is that natural. However, we see that large organizations have over the centuries operated in the head office craze. While that was useful for a time, it certainly isn’t anymore. When we appreciate the premise of the head office concept, we will be able to diagnose its endemic old age ‘multiple sclerosis’ ailment and prescribe the right ‘antidote’ for its cure.

Understanding the concept of the Head Office

The head office (or headquarters) concept of organization is based on the premise that there is a certain ‘sovereign’ (the board) who knows what it takes to run a company better than anyone else in the organization. This ‘sovereign’ has its lieutenants (middle management) through whom it operates. And these lieutenants in turn get their subordinates to do discrete, repetitive work till a certain efficiency and effectiveness are achieved.

Another premise is that to institute a chain of command, there must be a certain order and channel of reporting for proper supervision and maintenance of the status quo. Well, in themselves, these assumptions are not bad at all, for they served their purpose. But are they still relevant today?

Granted, due to the way the world’s educational curriculum is structured, it may seem that those assumptions are still relevant. This is because MBA education, for instance, teaches students how businesses operate, instilling in them the need to maintain the present order of things rather than equipping them to challenge and modify traditional ways of doing things. As a result, most large organizations are not in tune with the trends of the modern world thus breeding organizational inertia.

Why the need for a change

With the abundance of information today, top management can no longer go on pretending to be a ‘sovereign’. Granted, having access to information is different from absorbing such. And the absorption of such information does not in itself lead to success in management since experience is required. Hence when management would have empowered employees and guided them by way of training and practice to contribute to corporate strategy and the decision-making process, the result would be an adaptive and responsive, robust company that is moving with the times.

Regarding the second premise above, it has been demonstrated in human relationships that peer pressure can be stronger than authority. Thus when checks and balances are in place among peers, positive peer pressure is more effective in creating order than a top-down chain of command.

If you agree with my postulations above, then it is about time the head office nonsense was scrapped for a better system. Let us now see why that should happen. Then we’ll go on to see how that can be done and what benefits could be derived therefrom.

Why the head office nonsense must be scrapped

The first reason why the head office nonsense must go is that it stifles creativity, innovation and initiative. Branches are string-puppets in the hands of the head office within the status quo. Hence, they are limited in how creatively they can steer the affairs of the business for higher productivity. And since major decisions would have to be approved by head office the bureaucracy involved inhibits initiative and discourages creativity. Often, by the time a particular strategy or decision that meets local exigencies is approved it is obsolete. Certainly, this only leads to poverty creation rather than its alleviation due to mediocre productivity.

Secondly, as inferred from the point above, it stifles productivity and raises operational costs needlessly. This is because local branches are limited in strategizing to take advantage of emergent opportunities.

Thirdly, it lacks realism. Those at the local branch are more in touch with the goings-on in the locality. But since head office has its own universal system, the branch has no choice but just ‘plug into the system’ and operate, as one banker recently said upon his appointment. And this even though the particular strategy from head office might not be practical to local demands.

Finally, effective control becomes a headache. Contrary to the belief that the head office concept would engender a better control system, the opposite is rather the truth. Since head office relies on reports, it may not be aware of the standard of customer service delivery, for example, as well as other pertinent human qualities and human relations issues. Granted, there’s a branch head to administer some of these things. However, since it’s a hierarchical system and he’ll also have to play the boss ‘right’, some of those things would either happen on his blind side or he may not even worry his head over them, so far as his boss at the head office is satisfied with his performance and report.

The way forward

With the foregoing facts in mind (and others you may also think of), it would be wise to take a re-look at the head office system. Yet, how can that be done?

Ultimately, it would be more practical to decentralize decision-making and operations. Branches should be given progressive to full autonomy to operate as separate entities with the possibility of expanding and ‘giving birth’ to other businesses. This can be achieved when, much like we see in nature, the branches are nurtured to the extent that they can ‘fly’ by themselves and then left on their own. This would engender initiative, creativity and innovation. That would especially be the case since the branch is more attuned to the real needs in the local branch’s community.

Also, since workers at the branch are aware that they would only earn a living from what they produce, they would be highly motivated to give of themselves willingly. This would also mean that the reward system would be more progressive. Workers don’t earn so much simply based on their qualifications or what is normally the reward for one on a certain scale in the organization. Rather, local realities would determine who earns what and why. Thus costs are saved and productivity is bolstered.

Conversely, by deploying the right type of IT technology and seamlessly synergizing it with good, modern management practices and business operations, the need for a branch may not be even necessary, to begin with. For example, a supermarket chain would rather find it more cost effective and prudent to deploy an e-commerce platform which can be accessed by everyone from anywhere. This would free much-needed resources that would otherwise be sunk into opening a chain of outlets for other investment portfolios.

Similarly, a bank would rather deploy ATM’s to take care of local banking needs and thus reduce operational costs. This would, in turn, reflect in lower charges that would encourage more in the bankable population yet to join the banking population to do so.

Further, lower costs would mean, all other things being equal, lower interest rates. This would make it possible for MSME’s to thrive and thus create more jobs and wealth.

Conclusion

The benefits to be derived from abolishing the head office nonsense would thus be immense: higher productivity, encouraging creativity and creating more jobs. Talking of creating more jobs, some may think otherwise. For example, they may ask, ‘Who would employ those sales assistants who would otherwise be employed by the supermarkets? And what about those that the banks would employ at the branches?

Similar arguments were made when companies decided to computerize their operations. However, what those who make such arguments should have been asking is ‘What opportunities does this create for us?’ As I said earlier, when funds are saved, these can be channeled to other economic activities that would create jobs. The status quo rather is stifling job creation.

Furthermore, if more people use computers and mobile phones to shop, as an example, that will mean the need to either manufacture or assemble computers and mobile phones locally. It would also mean more opportunities for technicians (these are some of the developments that the educational system should be adapting to so as to train a human resource base that can adequately take care of these trends).

Opportunities are varied and numerous. However, it takes only those who think apart from popular thinking to realize them. When we eschew apprehension, fear and skepticism we would see more avenues to exploit to make life more meaningful for us and generations yet unborn. Thinking positively frees our mind from needlessly using it to dwell on things that would only make us have nightmares and see ghosts.

Yes, the head office concept did have its day; it’s now time to move on. After all, the world has moved on. By emulating what nature teaches us about life, we would be creating more formidable systems that would stand the test of time.

As I’ve been saying, those businesses that take advantage of current trends and adopt modern philosophies of management and business practice would be better able to stem the tide, as it were. They would be more flexible to take advantage of emergent needs and opportunities. Those are the companies that would thrive during the next fifty years. The time to change, then, is now!

The author Jules Nartey-Tokoli is Founder and Group CEO at Groupe Soleil Vision, comprising Soleil Consults (US), LLC, NubianBiz.Com, ShopNubian.Com and Soleil Publications. He has lived and worked in both Ghana and the United States, having extensive experience in Strategy, Management, Entrepreneurship, Premium Audit Advisory and Web consulting. He has also published several articles on Strategy, Management, Corporate Governance, Leadership, Entrepreneurship, Economics, e-Commerce, Information Technology (IT), Customer Service/Care, Sales, Marketing, Communication, Branding, Education, among others. 

Jules Nartey-Tokoli

See Full Bio