When Steve Smith joined Zayo as CEO, he found himself at the head of a company that was a Frankenstein of 46 acquisitions. And while the company’s decentralized approach had served it well in the early years, Steve saw an opportunity to take the company further. This time — and almost paradoxically — through centralization.

Zayo is a communications infrastructure company that ensures its customers have the fiber bandwidth they need to achieve their missions. They are a respected team with a business model that’s not going out of style. But they hit a wall in their own development. Find out on this episode of Business X factors how Steve married their decentralized approach with a centralized one -- all while still empowering the innovation and creativity that defines the company.

Main takeaways: 

• Have a Plan for Centralization:  If you decide to centralize the processes of a business after acquisitions or mergers, slogans like “think global, act local” or “create a lean but activist center” may sound good, but they do not provide a recipe in all circumstances. The Boston Consulting Group has identified four principles to create a value-adding corporate center. It includes careful assessment of the situations in which the center genuinely adds value and those in which it does not. Emphasizing strategy over structure; letting the business drive the center — not vice versa — and BCG advises companies to be self-critical about central capabilities. Be prepared to revisit and revise choices when circumstances change. 
• Listen, Learn, Lead: When the heat is on, rally the team or troops around a common mission or a change in strategy. Don’t scare employees into working harder with threats and blame — inspire them to do battle together to succeed. Anchor the organization by focusing on what people need to do differently and lead people into thinking how they can play a role. Encourage employees to speak frankly without finger-pointing, listen to ideas on how to better collaborate and innovate and be clear you are open to two-way conversations. 
• See Around Corners: Risk assessment typically exposes only the most direct threats to a company while indirect ones are neglected. McKinsey has found that while it is not easy to anticipate how risk cascades through a company or economy; executives who systematically examine the way risks propagate across the whole value chain can foresee and prepare for second-order effects more successfully. Investigate competitors, supply chains, distribution channels, customer response and the full impact of a major risk on a company and think about how your risk cascades to gain insight into what is around the corner. ---

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