① Organizations constantly swing between centralization and decentralization—not as a strategic choice, but in response to changes in leadership. This pendulum swing is not a problem; it is a constant.
② Centralization and decentralization are not mutually exclusive: they are a spectrum to be adjusted on a function-by-function and market-by-market basis. Certain functions (Finance, Legal, Data, Cybersecurity) are always centralized when it comes to rules and standards.
③ Lagardère Travel Retail’s “Align · Emulate · Inspire”model offers a third way: define non-negotiable rules, share best practices among peers, and allow local innovation to emerge.
④ The golden rule of pooling resources: standardize first, then pool resources. Pooling chaos merely shifts the problem.
⑤ In 13 years, Lagardère Travel Retail has tripled its revenue (€500M → €1.5B) and improved its margin from 4.6% to 5.5%. Two distinct transformations: the business model AND the operating model.
Centralize or decentralize? This question haunts every executive leadership team, resurfaces with every change in leadership, and never finds a definitive answer. Large organizations swing back and forth between the two like a pendulum—centralization in the 1990s with ERP systems, the wave of Global Business Services in the 2000s, the shift toward agile in the 2010s, and hybridization and AI today. What if the problem isn’t the model chosen, but the way we choose it?
On April 14, 2026, FocusTribes welcomed a former Global Vice President of Organization & Business Transformation at Lagardère Travel Retail —the world’s second-largest travel retail company, with a presence in more than 40 countries—to its TransfoLab #3 to share 15 years of hands-on experience regarding centralization, decentralization, and resource pooling. This was a rare, long-term perspective, backed by measurable results.
This article summarizes the key takeaways from the event and follows up on previous TransfoLab sessions: governance and transformation at Ubisoft and Coty; AI integration at PepsiCo and L’Oréal; and change management at AXA and Parfums Christian Dior.
I- The enduring paradox: why do organizations swing back and forth endlessly?
The pendulum swing between centralization and decentralization is not a corporate pathology—it is a historical constant. The real question is not which model to choose, but whether that choice is guided by strategy or by a change in leadership.
A century of organizational fluctuations
The history of large organizations is a succession of predictable cycles. The 1970s and 1980s were marked by widespread decentralization—each entity and each country managed its own affairs. The 1990s saw the arrival of ERP systems and the first wave of process centralization. The 2000s ushered in Global Business Services and shared service centers. The 2010s marked the shift toward agility, restoring autonomy to teams. And the 2020s are navigating a hybrid model, with AI as the new arbiter.
What’s striking about this timeline is that each wave comes as a reaction to the previous one, not in response to an objective assessment. Centralization corrects the excesses of fragmentation. Decentralization corrects the excesses of centralized rigidity. And so on.
“What drives a shift in model isn’t an objective diagnosis. It’s a change in leadership.”
The average length of a leadership term—five to seven years—corresponds almost exactly to the duration of an organizational cycle. This is no coincidence. When a new leader arrives, they bring their vision, their experience, and their convictions about what works. And the organizational model changes accordingly, often even before a shared assessment has been established.
The Lagardère Travel Retail transformation: born of necessity
At Lagardère Travel Retail, organizational transformation did not stem from a strategic consultation with a consulting firm. It arose out of absolute necessity. The Relay brand, founded by Louis Hachette in 1852, had built its business model around newspapers, books, tobacco, and scratch-off tickets. In 2008, the iPhone was introduced. Free newspapers flooded train stations. In 2010, Arnaud Lagardère—the world’s leading magazine publisher—announced the unthinkable: print was dead. For Lagardère Travel Retail, the leading retailer of print media in train stations and airports, the business model had to change radically. The transformation began in 2011.
“We were hit head-on by reality. We transformed ourselves first and foremost out of necessity. Because our world was changing.”
This grounding in a real and shared necessity is one of the key lessons learned from the experience: profound transformation is only possible when the status quo costs more than change. At Lagardère Travel Retail, no one could claim that everything was going well. It was this clarity about the problem that made the transformation possible.
Key takeaway: The organizational pendulum is not a corporate pathology—it’s a constant. When weighing centralization against decentralization, the real question is: Are we guided by strategy, or by the leader’s ego?
II- Centralization vs. Decentralization: the real trade-offs
It’s not a binary choice—it’s a spectrum to be adjusted function by function, market by market. Lagardère Travel Retail’s Align · Emulate · Inspire model offers a concrete framework for striking a balance between group consistency and local autonomy.
The benefits and risks of each model
Before making a choice, we must honestly identify what each model brings—and what it costs.
Centralization generates economies of scale in procurement, systems, and support functions. It ensures consistency and control—standardization, compliance, and unified reporting. It strengthens negotiating power with suppliers through critical mass. It accelerates top-down execution in the event of a crisis. But it creates a disconnect from the front lines, slows down decision-making, erodes the commitment of local managers, and creates hidden complexity (committees, matrix structures, escalation processes) that consumes energy without creating value.
Decentralization enables adaptation to diverse markets, rapid innovation through test-and-learn, empowers local leaders to act as entrepreneurs responsible for their P&L, and preserves distributed, non-transferable expertise. However, it exposes the company to reputational risk if a unit goes off track (one mistake impacts the entire brand), duplicates costs (each business unit recruits and equips itself), fragments data (no longer a common language), and dilutes brand identity.
The example of Lagardère Travel Retail’s Chinese subsidiary perfectly illustrates this last risk: faced with local preferences, it decided to use the Relay logo in blue—even though the brand is red in the global brand book. Too much local autonomy can even go so far as to dilute the group’s very identity.
Functions that remain centralized
Regardless of the model chosen, certain functions cannot be decentralized—at least when it comes to rules and standards. At Lagardère Travel Retail, as in most structured international groups, Finance, Legal, Data, and Cybersecurity remain centralized. Country CFOs report directly to the Group CFO. This centralization of core functions is not a matter of efficiency—it is a matter of governance and risk management.
The Align · Emulate · Inspire model: a third way
To move beyond this binary debate, Lagardère Travel Retail has developed a three-tier organizational framework that clearly defines what is mandated, what is shared, and what is left to local discretion.
Align—define the non-negotiable rules. The rules are the same for everyone. They are non-negotiable. This is the common foundation that allows the group to exist as a group—and not merely as a collection of independent entities. Without this “Align” component, there is no group, just a financial holding company.
Emulate — share best practices. Within the framework of these common rules, what do the best performers do? How can others draw inspiration from them? Peer learning is more credible and effective than top-down directives from headquarters. The United States excels at pricing, France at workforce planning: every country has its strengths. It is these strengths that Emulate capitalizes on and shares.
Inspire — let local innovation emerge. This is the space for freedom. Do you have ideas, experiences, or innovations? Come present them. They might interest other countries. This space is what motivates and retains entrepreneurial talent—those who might otherwise have left an overly rigid structure to start something elsewhere.
“Centralize the method, not the power. The real challenge: creating a common language, shared rules, and a clearly defined space for freedom.”
The rule for adjusting the balance: The higher the reputational or financial risk → the more we centralize. The more value local adaptation creates → the more we decentralize. The balance shifts with each new function and each new market.
III-Pooling and GBS: standardize first, pool later
Pooling can create value far beyond cost reduction—but only if processes are standardized before being pooled. Pooling chaos merely shifts the problem.
The three objectives of pooling—and their hierarchy
When an organization decides to pool functions or processes into a Global Business Services (GBS) or a shared services center (SSC), it most often has one objective: to reduce costs. This is the most common argument in business cases. But it is also the most dangerous, as it drives standardization at the expense of service quality and creates rigidity where the business needs flexibility.
Two other objectives are more sustainable and strategic. Creating value: at Lagardère Travel Retail, structured data generated by shared processes was sold to strategic partners. Shared services became a business asset, not just a cost center. Empowering business units: enabling operational teams to focus on what truly creates value for the customer by relieving them of administrative and cross-functional tasks. This is the most underestimated objective—and often the most transformative.
“Centralizing chaos is just shifting the problem. The golden rule: standardize first, centralize later.”
Lagardère Travel Retail’s 4 foundational initiatives
Rather than transforming everything at once, Lagardère Travel Retail sequenced its centralization initiatives based on the trust it had built—not on technical ambition. Four foundational initiatives were rolled out successively:
1. Master Product Data —the product data repository shared across the entire group. Without shared data, no centralization is possible.
2. Group Chart of Accounts —a unified chart of accounts enabling rapid consolidation and true comparability across entities.
3. Unified Point-of-Sale — the standardization of checkout processes, a prerequisite for any sales data analysis.
4. Group ERP — the deployment of a shared information system, the final step in a prior standardization process. Without the three previous initiatives, the ERP deployment would have merely consolidated the existing chaos.
This sequencing reveals a fundamental logic: each initiative creates the conditions for the next. The trust built up at each stage—proof that it works—makes the next initiative politically feasible.
The 5-step target operating model
To structure the transformation of the operating model, Lagardère Travel Retail implemented a five-step approach based on a central principle: co-creation rather than imposition.
1. Map —13 key processes selected across the entire value chain. Not all processes: just the most strategic ones.
2. Identify champions —for each process, which country or entity does it best? The United States for pricing, France for workforce planning.
3. Improve together — 10 countries work on the champion’s process. The result is no longer that of a single country—it’s that of the group. A standard that has been co-created is adopted; a standard that has been imposed is circumvented.
4. Define KPIs — 4 to 5 metrics per process, with precise and shared calculation rules. Without common metrics, there can be no shared progress.
5. Maturity Scale — Each country positions itself on a 4-level scale (Initial → Defined → Mastered → Optimized) and sets a goal to advance one level per cycle. The maturity scale makes comparisons objective: it is not a judgment on the teams; it is a roadmap for progress.
Behind every project lies, first and foremost, a challenge of organizational and human transformation.
Aligning functions, structuring governance, and getting teams on board: that’s where success is determined.
FocusTribes consultants support executive leadership in these digital transformation programs and other complex initiatives.
IV—Building a Team and Changing Mindsets: The Invisible Challenge
The results are clear: revenue tripled, margins improved, global leadership solidified. But behind these numbers lies a project that transformation plans systematically underestimate: changing mindsets. It is the most difficult—and the most critical—project.
The results of a systemic transformation
Between 2011 and 2024, Lagardère Travel Retail underwent a transformation reflected in the numbers:
Revenue tripled— from €500M to €1.5B over the period
Operating margin: 4.6% → 5.5% —a significant improvement in a highly competitive market
No. 2 in global travel retail
No. 1 in Travel Essentials (Relay) — globally for the brand
No. 3 in Transportation Foodservice — globally
But our speaker emphasizes a point worth highlighting: these results are the product of a system, not an isolated initiative. And this system comprises two distinct transformations—a common mistake is to confuse them or to address one without the other.
“The group adapted its business model to customer demand—and its operating model to the new business model. To me, these are two very different things.”
The first transformation is that of the business model: Lagardère Travel Retail has shifted from a model centered on newsstand and tobacco products to a multi-format model (Travel Essentials, food and beverage, duty-free, digital). The second is the transformation of the operating model: the group’s organizational structure, the standardization of processes, the deployment of shared tools, and governance. The operating model must follow the business model—not precede it.
The 4 levers for changing mindsets
No organizational model can succeed without cultural change. This is the aspect that transformation plans most often downplay—because it is the least visible and the most time-consuming. Four complementary levers were activated at Lagardère Travel Retail.
1. Strong, embodied leadership. In a decentralized group, decisions made by headquarters do not naturally carry weight. It takes a leader who embodies authority and vision—who leads by example, reinforces the message, and visibly makes decisions that advance the transformation. But authority alone is not enough: without the other three levers, it leads to superficial compliance.
2. Small victories as precedents. The most powerful lever isn’t rhetoric—it’s precedent. When a country sees the concrete benefits of a shared or standardized approach, it becomes an advocate for that approach among others. Leading by example is more convincing than any PowerPoint presentation.
3. Financial incentives. The most direct lever—and the most straightforward in its logic.
“When we tied their compensation to group objectives, strangely enough, everyone fell in line. Not out of conviction, but out of self-interest.”
Linking a portion of local executives’ variable compensation to group objectives—and not just to their entity-specific objectives—automatically creates an alignment of interests. This isn’t cynical: it’s consistent with the logic of a group.
4. Trust built through collaborative work. Cross-country training sessions, mixed teams working on real-world cases, peer-to-peer exchange sessions: trust cannot be decreed—it is built through shared experience. A French manager who has worked for six months with Japanese and American colleagues on a shared process places greater trust in the group’s decisions than a manager who has never ventured beyond their local scope.
Simplification: the most difficult task
The most counterintuitive lesson from this experience is undoubtedly this: in an organizational transformation, the most difficult project is not building—it is simplifying. Building simple processes requires constant patience and vigilance to ensure that simplification does not create its own complexity.
“Simplifying is the most complicated thing of all. Because every simplification is a decision—and every decision creates new special cases.”
The paradox is real: in their quest to simplify, organizations often create new layers of governance, new ad hoc committees, and new escalation processes. Staying vigilant against this self-generated complexity is an ongoing effort, not a one-time project.
The 5 key takeaways:
① There is no perfect model—it’s a spectrum, not a binary choice.
② The organizational model stems from strategy; it does not precede it.
③ Centralize the method, not the power.
④ Small victories pave the way for big ones.
⑤ Simplification is the most difficult undertaking—a human and cultural project, not a technical one.
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V- FAQ -Organizational Model, Centralization, and Decentralization
Five frequently asked questions from executives and consultants about the trade-offs between centralization, decentralization, and resource pooling in international corporations.
What is the difference between centralization and decentralization in a company?
Centralization concentrates decision-making and resources at the headquarters or within a central function to achieve greater consistency, economies of scale, and bargaining power. Decentralization delegates authority to local entities or business units to increase agility, adapt to local markets, and foster accountability among leaders. This is not a binary choice: it is a spectrum to be adjusted function by function and market by market, depending on the company’s strategy and acceptable risk level.
What is the Align · Emulate · Inspire model?
Align · Emulate · Inspire is the organizational framework developed by Lagardère Travel Retail to balance group consistency with local autonomy. Align defines the non-negotiable rules common to all countries—the foundation that underpins the group. Emulate organizes the sharing of best practices among entities, within the framework of these rules. Inspire creates a space for local innovation to emerge and benefit the entire group. This model replaces a top-down approach with one based on co-creation and peer learning.
When should a Global Business Services (GBS) or shared services center be created?
A GBS or shared services center should never be created to consolidate processes that are still chaotic: consolidating chaos simply shifts the problem. The golden rule is to standardize first, then centralize. The three legitimate objectives of a GBS are: to reduce costs (the most commonly cited reason, but also the riskiest), creating value (structured data resold to partners, for example), and freeing up business units so they can focus on what truly creates customer value. It is this third objective—often underestimated—that produces the most lasting effects.
How do you balance local autonomy with group-wide consistency?
This balance is struck on a function-by-function basis, not across the board. Certain functions are always centralized based on rules and standards: Finance, Legal, Data, and Cybersecurity. Others can be decentralized depending on markets and local specifics. The key principle drawn from the Lagardère Travel Retail experience: centralize the methodology, not necessarily the authority. Creating a common language, shared rules, and a clearly defined scope of autonomy makes it possible to balance consistency and agility without sacrificing one for the other.
Where should you start to evolve your organizational model?
Lagardère Travel Retail’s experience suggests five steps: map the key processes in the value chain; identify the champions (the top-performing entities for each process); drive collective improvement by having other teams align with the champion’s process; define 4 to 5 shared KPIs per process with precise calculation rules; and then position each entity on a four-level maturity scale (Initial, Defined, Mastered, Optimized) with the goal of advancing one level per cycle. The key to success: co-create rather than impose. A jointly developed standard is adopted; an imposed standard is circumvented.
Fifteen years of hands-on experience, a company that grew from €500M to €1.5B in revenue, and one conviction: there is no perfect organizational model.
There is the model that aligns with the company’s DNA, its current strategy, its markets, and its people. That is the model we must find—not copy someone else’s.
“You have to find the model that aligns with the company’s DNA. That’s what saved us.”
The paradox of the organizational pendulum is not inevitable. It becomes inevitable when decisions are guided by the leader’s convictions rather than by the company’s strategy. When standardization is decided upon before centralization. When cultural change is treated as a secondary project rather than as the prerequisite for the success of all others.