What Should Stay Local in a Regional Group

If we were building a regional group of strong local businesses, we would not begin by asking what can be centralised. We would begin by asking what should stay local.

The first question has an easy answer: almost anything can be centralised. It is the wrong question because it tests feasibility rather than value.

The candidates for staying local

The customer relationship
The local brand
Sales leadership
Market knowledge
Technical expertise and service delivery
Selected supplier relationships
Pricing judgement
Local management

Why? Because those capabilities are often the reason the business works at all. They are also the ones that degrade fastest when distance is introduced.

Decentralisation as an advantage

There is a tendency in corporate structures to treat decentralisation as a temporary condition to be corrected later. We think that framing is usually wrong.

In markets where local speed, trust and knowledge matter, decentralisation is a competitive advantage rather than an inefficiency. A company that can decide today beats one that can decide next month, and in service businesses that difference is frequently the whole margin.

What the group is for, then

If the local company keeps what makes it locally effective, the role of the broader group becomes specific: provide capabilities the local business cannot efficiently build alone, remove unnecessary constraints, improve access to products, systems, talent and markets, and create useful connections between companies.

What it should not do is create distance between the company and its customers because a central function looks cleaner on an organisational chart.

The test

Before moving any capability away from the customer, three conditions should hold: it is expensive to build alone, its quality improves at scale, and distance does not reduce its effectiveness. Technology passes easily. Customer relationships fail immediately. Most things need to be argued individually.