Centralised and decentralised organisations: implications for HR and talent management

Nigel Wright speaks to TwiningsOvo International Markets (IM) HR Director, Annekatrin Ott, about her experiences of operating in centralised and decentralised business models.

Amongst many of the challenges associated with expanding overseas and establishing operations in new and often complex territories, determining and implementing the most appropriate business model that will help facilitate growth is certainly one of the most difficult to overcome. The decision is largely twofold; introduce a centralised model with consistent frameworks and aligned processes or; opt for a decentralised system without a functional core, and enable processes and frameworks to evolve at the local level. Both models can be beneficial. Centralised systems, once alignment has been established, can often make decision making faster which in turn can lead to significant cost savings. Yet, decentralised models also promise speed and cost efficiency; working with local suppliers can be cheaper in the long run and if processes are tailor-made for the specific territory, companies can usually expect better, faster decision making without the input of a ‘global’ centre. Regardless of which model is adopted, however, the impact on the HR practitioner is significant, especially if they’re moving from one system to the other.

Annekatrin Ott is someone who knows exactly how challenging this can be. Having spent most of her 15 year HR career working in large multinational companies with centralised models, in 2013 she was appointed HR Director for TwiningsOvo IM, a decentralised division of Twinings, to reshape and invigorate its people agenda. In joining TwiningsOvo, IM Annekatrin explained that although the opportunity to experience life working within a different business model was fantastic from a career development perspective, at first she felt like she’d ‘been hung upside down.’

TwiningsOvo IM is responsible for delivering Twinings and Ovaltine brands to over 100 markets around the world. The decentralised business model stems from its customer and product driven culture. With hundreds of SKUs worldwide, it tries to cater its products, which consist of a variety of specialist teas and hot drinks, to the multitude of different consumer tastes that exist in the countries that it currently serves. Its aim over the next four years is to double its operating profits across its main locations (India, Italy, the UK, Brazil and Nigeria).

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