Today you will learn a term that will bring in some insightful thinking to your business, entrepreneurial, and even personal life. This is the term hub and spoke. You probably have come across it before or it may have been unknown to you. Be glad you came across this article because that is its focus. The article will cover a breakdown or unpacking of what the hub and spoke model is. By the time you are done reading this article, you will no doubt have some newfound insights. What is important is to implement what you shall learn today.
What Does Hub And Spoke Mean?
There are many ways to define what hub and spoke means. The hub and spoke model is a model whereby there is a centralized point (hub) that is connected to smaller points (spokes) – picture a bicycle wheel. At the most basic that is what hub and spoke means. You can even think of it as a decentralized way of running an otherwise centralized operation. However, it varies when you contextualize how and where that model is used. For instance, one particular definition cites an aircraft deployment method.
It is an approach whereby an airline designates 2 or more strategically located cities as hubs to which its bigger aircraft bring most of its passengers and cargo through many scheduled flights. The passengers and cargo are subsequently taken to their respective destinations by smaller aircraft that belong to the same airline or smaller commuter or feeder airlines under a code-sharing framework.
You may be wondering why this definition is rooted in a practical example like that. It is because the hub and spoke has its roots in the transportation sector. That is where the concept originated from and is now finding its place in many other sectors. That definition does clearly paint the picture of the model.
A Relatable Example To Learn From – The Church
Many of you are Christians. So this example may be me preaching to the choir though some of you may have never seen it that way. The model the Church predominantly uses is the hub and spoke. There are churches that were founded in Zimbabwe that now have footprints in many countries. The converse is also true. The hub and spoke model has proven potent when you look at the most notable global church ministries. That is why you have lots to learn and emulate from studying the Church case study. The same model is applicable to establishing and spreading any business venture. You should check out the article on marketing lessons from the Church.
Limitless Scenarios Where The Hub And Spoke Model Is Applicable
The remarkable thing about the hub and spoke model is it can be applied almost anywhere. Consider the airline definition; that shows how the hub and spoke can be employed for a transport business. The hub and spoke model is particularly used in businesses that entail some form of distribution network. As the times evolve the hub and spoke is getting used in even more interesting ways. One interesting example is hub and spoke in the workplace. Ever since the pandemic, you saw the emergence of remote working or hybrid work. The hub and spoke model can be used to structure and drive hybrid working.
For instance, there can be a centralized location e.g. an actual physical office or it can be a co-working space. That will be the hub and whenever needs be, workers from a company can converge there. Then there will be smaller locations e.g. one’s home, some other co-working space, and so on. This one will have the flexibility to work from somewhere and meet with others somewhere if necessary. Bear in mind that the centralized location may also be wholly physical, online, or a cross of the two. This is all just to demonstrate to you how unlimited the hub and spoke model is.
NB: The hub and spoke model is easily applicable to certain industries namely, transport and logistics, wholesale and retail. Of which those are industries under which many businesses or startups fall under. Regardless, there are always creative ways to implement the hub and spoke model for any business or startup.
Why You Need To Employ The Hub And Spoke Model?
The benefits of the hub and spoke of course depend on the context. Consider the hub and spoke hybrid working example. By using that approach it means you can tap into skilled professionals from anywhere in the world. For example, you can hire or outsource a skilled professional in Nigeria for your company in Zimbabwe. You will not have to bear the burden of financing their relocation. Plus you will not bear the usual costs of hiring staff that report to a physical location. Then you can consider the benefits with regard to distribution-based businesses. Using the hub and spoke model reduces operating costs.
Let us suppose you have a goods-centred business in Harare. Then there occurs a scenario where you get a client in Masvingo. You would have to finance the transportation and delivery to that one client. That comes unnecessarily expensive. A better approach will be to have a distribution location or a form of a fulfilment centre in Masvingo. That way, you only get to incur transportation costs periodically by sending bulk goods. Plus having that location in Masvingo makes it easier to push volumes or sales. Why? This is because your transit, fulfilment or delivery times will be shorter.
Some of the commonly used models are point-to-point and linear. They have their merits and demerits; largely contextual so it is important to assess your context. The hub and spoke model is more widely adaptable which is why it is worth a shot. The hub and spoke can even reinvigorate or optimize the point-to-point and linear models. Inherently most businesses use the hub and spoke model unaware. It would be best to start consciously assessing and tweaking the model.
