strategy resources

Delegation VS Decentralisation: what’s the difference?

I recently made a breakthrough in my thinking on Founder-led hiring and promotions. The mistake that Founders often make is they haven’t considered the difference “delegation vs decentralisation” within the context of how they’re running their business.

In the process of growing a business, the Founders’ time gets spread too thin. The natural solution is hiring or promoting people and delegating tasks to that person.

In this process, Founders either delegate the responsibility of implementing the decisions they have already made or the responsibility of making decisions (or sometimes both). Let’s break down the “delegation vs decentralisation” concept:

???? Delegation is called for when the decision has already been made and it just needs to be implemented – these tasks tend to be tactical in nature.

???? Decentralisation is called for when someone besides the founder(s) needs to initiate and make decisions that involve changes in strategy (i.e. strategic decision-making is decentralized away from the founder).

Where Founders go wrong is that they don’t recognise the need to have a system of control in place before hiring or promoting someone into the role.

When this happens, the Founder unintentionally ends up decentralising instead of delegating. They then become disappointed when the person that they “delegated” to doesn’t meet their expectations of what they think someone in that role should be doing.

These employees are set up to fail because they look to their leader for direction in how to do the job; but the founder looks to them to set their own direction. It is only through trial and error that both the founder and the employee can learn what is expected of them – which can be a brutal process for everyone involved.

One of the best questions a founder can ask themselves when scaling is this: “is this responsibility something that I can delegate or do I need someone else to take over the decision-making here?”