Choose Your Model: Centralized vs Decentralized Idea Management

Most business leaders agree about the importance of cultivating promising ideas from the workforce to ensure long-term success for the organization. However, many run into struggles finding a way to organize and manage the proposals effectively. It’s usually the result of not having a clearly defined idea management strategy in place. Options include a centralized, decentralized, or hybrid model approach. Let’s look at how each works and the pros and cons of each.

Centralized Idea Management

The centralized business model works by having employees come up with ideas. They feed them into a transparent online system accessible to everyone. Those ideas get collected by Category Managers charged with overseeing different areas of the company. Any concepts with impacts to their business units get developed further.

Moving Ideas Forward in Centralized Management

Once the ideas are ready, the Category Managers take the recommendations to a steerage group set up by the organization to go over the validity of each proposal. The members talk through each idea and the feasibility of implementation. All unendorsed ideas remain in an idea management software system until manually removed. 

Ideas that get a green light get evaluated for potential implementation in a future project. Once a project team forms to move the idea forward, that project manager contacts stakeholders through the system. They typically accomplish this with a few keystrokes or clicks within a system interface along with a single sentence communicating the status.

Challenge managers or admins can accomplish this in an idea management platform like Idea Pipeline by “endorsing” ideas and assigning “idea champions” or various stewards of the idea that are tasked with specific jobs to ensure the idea moves through different stages until implementation. 

A larger project may involve more gatekeeping where yes/no decisions might end up going back through the steerage committee. Most groups rely on an idea evaluation process to gather enough information about an idea beforehand to streamline the decision-making process. For example, suppose an idea comes into the pipeline to replace an outdated desktop data entry platform with a faster web-based application. The steerage committee would go over how the upgrade would benefit the organization as a whole. 

Considerations might include how much it would cost to perform the upgrade, the time it would take to train employees on the new application, and whether it would impact production enough to be worth the investment. In addition, the steerage committee also maintains responsibility for the entire centralized idea management process, including monitoring results and coming up with ways to improve how it works.

Centralized Idea Management

Pros and Cons of Centralized Idea Management

Centralized idea management gets used often within companies with less than 200 employees. They’re typically hierarchical organizations, where it’s easier to get everyone together to make decisions. Larger organizations often use centralized idea management when the ideas presented require additional expertise outside of that available within a specific business area.

However, the biggest hurdle relying on centralized idea management within a larger company is managing the sheer number of ideas that come through the pipeline within a committee of decision-makers. As a result, bottlenecks often form when steerage meetings get bogged down with the need to discuss the details of a lot of diverse concepts.

The most significant slowdowns occur because members get overrun by administrative tasks and reporting. In addition, it’s often difficult to get everyone together with the background necessary to help the steerage committee make an informed decision.  Other challenges include:

  • Problems getting all business areas to agree on one solution
  • Issues coming up with incentives that encourage adoption of new processes within the entire organization
  • The final solution may not line up with what stakeholders expect
  • Managing the overhead of maintaining a full-time steerage team

For larger organizations drawn to a centralized approach, a robust idea management platform is essential to ensure specific teams are being targeted for individual challenges, and all team members are aware of the ideas being submitted. On top of that, in a system like Idea Pipeline, all members in the organization have visibility into idea development from submission to eventual implementation (if pursued).

Decentralized Idea Management

While centralized management offers a way for organizations to manage line of sight over an idea from creation, some prefer a different approach. Decentralized idea management functions similarly to centralized idea management, with the biggest difference being the elimination of a steerage committee overseeing the process.  

In a centralized idea management process, category managers develop ideas further before presenting them to the steerage committee for a final decision. That role expands further in a decentralized model, where the category manager also takes on responsibility for making decisions about whether those ideas advance to becoming full-blown projects. This process eliminates bureaucracy and speeds decision-making among those that know what it takes to implement an idea.

Moving Ideas Forward in Decentralized Management

Because you have specific business units taking ownership of implementing the idea, it is easier for them to control the processes that go into producing the final product. That leads to faster, more informed decision-making and a better chance the result meets the needs of stakeholders.

Company executives direct the flow of ideas, keep up with the results, and have discussions with Category Managers about any possible roadblocks or opportunities for improvement. As a result, you’ll often find decentralized idea management in place within companies that have a workforce numbering between 200 and 500 people. It’s also a good model for larger organizations making more minor, incremental improvements in a product or process.

Pros and Cons of Decentralized Idea Management

The most significant benefit of decentralized idea management is the speed at which business units can decide whether to move forward with an idea. In addition, areas get to work more closely with business areas to ensure the original vision remains consistent. That makes it easier to get feedback that makes it possible to optimize the benefits of the final solution.

However, decentralized idea management can run into challenges when you’re dealing with larger initiatives, including:

  • Higher-ups in the organization having less control over the development of a project
  • Can have multiple projects going on within a company with little oversight
  • Business users may get pulled away to deal with other responsibilities

Decentralized idea management

Hybrid Idea Management

Hybrid idea management, which combines the benefits of centralized and decentralized idea management, typically gets put in place by organizations that can’t get what they need by sticking solely to one model or the other. For example, your company may find itself needing a product-related idea process and one for internal process development. The differences could make it ideal to have two tracks available for idea collection and nurturing.

The hybrid model puts a dedicated process owner in place who oversees both tracks. Organizations can set up a steerage group or put a single person in charge. Their role is to provide support for those tasked with making decisions within both tracks.

In addition, they assist by monitoring the performance of decision-makers and providing process improvements. They may also step in when decision-makers need someone to get them back on track. You typically see hybrid idea management within organizations with more than 500 employees.‌

Choosing an Idea Management Solution

Regardless of your choice of idea management model, you need a platform capable of supporting your organization’s needs. The best implementations come from ideas that were backed by various stakeholders within the organization. So whether your steerage committee or smaller unit teams are the ones deciding on innovative pursuits, you need to have a comprehensive tool that compartmentalizes it all for you. 

Check out how well the Idea Pipeline helps your company with idea management by setting up an account with us today. Contact us if you want a more personalized introduction to our tool.

Published by Idea Pipeline October 15, 2021