Information Locality and Decision Rights
Decisions require information. You have two options:
- Centralize information — move data up to where decisions are made
- Decentralize decisions — move authority down to where information exists
Centralizing information is slow, lossy, and expensive. By the time context reaches the top, it’s stale. Nuance gets compressed. You build bureaucracy just to shuttle information around.
Pushing decisions to the edge is more efficient — no transmission delay, no compression loss. But it only works when people are competent enough to decide well, and aligned enough that distributed decisions don’t fragment.
Three Pillars of Decentralized Decisions
Decentralizing authority without supporting conditions creates chaos. Three pillars must hold together:
- Control — actual authority to decide
- Competence — capability to decide well
- Clarity — shared intent so decisions align
Missing any one breaks the system. Control without competence produces mistakes. Control without clarity produces fragmentation. Competence and clarity without control is wasted potential — people who could decide but aren’t allowed to.
Inverting the Direction of Initiative
Traditional leadership pushes down: leader gives orders, subordinate executes. The alternative flips the active party.
Instead of leaders extracting information upward and pushing decisions down, subordinates surface decisions in ready-to-validate form: “I intend to…” The leader’s role shifts from directing to enabling — intervening only when needed.
This is more efficient because the person with the information packages it themselves. No lossy compression, no waiting for the next status meeting.