What is the Hub and Spoke Model?
When you first start running a business, it seems simple. Sell a product or service, get paid, repeat. However, as time goes on things like workflow efficiency, workload distribution and task or project management become important KPIs. If you're looking to scale your business, consider using the hub and spoke office model to keep things running smoothly.
What is the hub and spoke model?
Picture a bicycle wheel. The central hub is surrounded by many spokes, which all begin in one location but lead to different ends. In a business context, everything originates from the hub and is then distributed outward by the spokes. The hub and spoke model has been adopted by many businesses and distributors due to its proven efficiency.
A polar opposite to the hub and spoke model is the point-to-point model. In this model, everything travels from point A to point B without passing through a central hub. Here's how to think about the differences between models. Let's say you and some friends are going for dinner together. In the point-to-point model, one person would drive to pick up each person and then drive to the restaurant together. In the hub and spoke model, everyone would agree to meet at the hub—the restaurant.
Examples of the hub and spoke model being used in the real world
There's a good chance you've encountered the hub and spoke model many times over, and perhaps not even realized it. Here are two examples of industries, which utilize the efficiencies and cost savings of this model.
Unless you live in a major city, you've likely experienced a serious lack of direct flights. This is because airports leverage the hub and spoke model in order to reduce the total number of flight routes. By using large city airports as hubs, airlines can service smaller satellite or “spoke” communities by routing them through the hub to other satellite communities.
While direct flights and no layovers may sound like a better choice for customers, the cost and logistics of offering worldwide direct flights from anywhere to anywhere is simply unfeasible, not to mention an air traffic controller's nightmare.
If you think back to elementary school, you'll likely recall childhood friends, fun activities, and a favorite teacher or two. But let’s not forget that at the end of the day, education is a business with hundreds, thousands, or even hundreds of thousands of students to manage, teach and keep track of.
In this hub and spoke example, the school office acts as the hub and each classroom is a spoke. The office collects fees, tracks attendance and handles student issues for the classrooms, while distributing news, supplies and resources to the classrooms.
Imagine if every classroom teacher was responsible for everything the office staff handles on top of teaching. Nothing would ever get done.
2 ways the hub and spoke office model works in business
The hub and spoke model can be incorporated into any business on a large or small scale. Whether you are a CEO or project manager in charge of employees, or a small business owner looking to organize documents, you can use this model to optimize your business efficiency.
Manage employees from anywhere
With more of the workforce moving toward remote work, businesses need to adapt to keep up with this global shift. Whether your employees and subcontractors (spokes) are working in a physical office, a home office, or on a beach in Bermuda, there needs to be a hub for all communication and tasks to filter through (which can also be on a beach in Bermuda).
Having a central location for sending and receiving daily tasks, check-ins, holding meetings, and submitting drafts and final products helps your business stay organized and keeps everyone in the loop, creating an environment for high productivity and efficiency.
Organize (digital) paperflow
We’ve all been there. It's tax time and you're digging out old receipts from the car, bags and desk drawers. You rip your office apart searching for missing paperwork, which you find in five different file folders and three different emails—you have paper trails everywhere. When it comes to your business, or even your personal life, unorganized paperwork can cause major headaches.
Using a central hub like Google Drive takes the guesswork out of where your digital files are located. By utilizing folders, you can organize your files and documents from your various spokes in one place. You can take this to the next level by sharing folders with your team so everyone can file documents in the same place, following the same system.
The hub and spoke model offers numerous benefits to businesses, including reduced routes or connection points, improved scheduling, increased efficiency and increased revenue. Technology can effectively link digital and physical worlds, creating a flexible and streamlined operation to help you take your business to the next level.