The Starfish and the Spider [pdf]

The Starfish and the Spider: The Unstoppable Power of Leaderless Organizations By Ori Brafman and Rod Beckstrom Introduction This book is about what happens when there’s no one in charge…no hierarchy. A revolution is raging all around us….Decentralization has been lying dormant for thousands of years. But the advent of the Internet has unleashed this force…The rules of the game have changed. Think “Roland Allen” as you read these notes. Chapter 1: MGM’s Mistake and the Apache Mystery The Spanish army defeated the Aztecs in a few years but couldn’t defeat the Apaches in 200 years. The Apaches persevered because they were decentralized. Two opposite systems – centralized (command and control, rules) and decentralized (no clear leader, no hierarchy, no headquarters; open system, distributed power; flexibility, shared power, ambiguity). Geronimo never commanded an army. Rather, he himself started fighting, and everyone around him joined in. First principle of decentralization: when attacked, a decentralized organization tends to become even more open and decentralized. Big record companies suing Grokster – an early version of Napster. P2P (peer-to-peer) service had 8.6 million users in 2005. Big companies have lost 25% of revenue. Chapter 2: The Spider, the Starfish and the President of the Internet In 1995 investors couldn’t understand the Internet. They wanted to know who the president of the Internet was. Spider – Centralized. Central body with legs. Cut off the head and it dies. Starfish – Decentralized network. No head. Major organs are replicated throughout each arm. Cut it in half and you get two starfish. Second principle of decentralization: it’s easy to mistake starfish for spiders. One of best known starfish – Bill Wilson creator of Alcoholics Anonymous. At AA, no one’s in charge and yet everyone is in charge. You automatically become part of the leadership – an arm of the starfish – the moment you join. The one constant = the recovery principle – the 12 steps. Because no one is in charge, everyone is responsible for keeping themselves and everyone else on track…the sponsor doesn’t lead by coercion but by example…Bill W trusted each chapter to do what was right…If you feel like it, you can start your own chapter. Members have always been able to directly help each other without asking permission or getting approval from Bill W. or anyone else. Third principle of decentralization: an open system doesn’t have central intelligence; the intelligence is spread throughout the system. AA is flexible, equal, and constantly mutating. Fourth principle of decentralization: open systems can easily mutate. As soon as an outside force presents itself, the decentralized organization quickly mutates to meet the new challenge or need. Bill W served to catalyze a new idea and then got out of the way. He left his organization without a central brain and, in doing, gave it the power to mutate and continually alter its form. P2P networks are reacting at blazing speed, constantly mutating and staying a step ahead of the music labels. Fifth principle of decentralization: the decentralized organization sneaks up on you. Because it mutates so quickly, it can also grow incredibly quickly…the starfish can take over an entire industry in the blink of an eye…the Internet changed everything in less than a decade. Sixth principle of decentralization: as industries become decentralized, overall profits decrease. Introduce starfish into the equation and wave good-bye to high profits. How to recognize starfish… 1. Is there a person in charge? If you see a pyramid and a CEO you are probably looking at a spider. Hierarchy and clear accountability. Starfish = open system, flat. 2. Are there headquarters? Starfish doesn’t depend of a permanent location or a central headquarters. The organization (AA) is equally distributed across thousands of community centers, churches, even airports. AA is found wherever a group of members chooses to meet. 3. If you thump it on the head, will it die? Starfish often don’t have a head to chop off. 4. Is there a clear division of roles? In decentralized organizations, anyone can do anything. If a member of AA wants to start a new circle, or if a member of eMule wants to post thousands of new songs, they can. Any and every activity is within anyone’s job description. 5. If you take out a unit, is the organization harmed? Units of a decentralized organization are by definition completely autonomous. In fact a severed arm of a starfish might grow an entirely new organization. Isolate an AA circle from the AA organization and both will be able to survive. 6. Are knowledge and power concentrated or distributed? In spider companies, power and knowledge are concentrated at the top. In starfish organizations, power is spread throughout. Each member is assumed to be equally knowledgeable and has power equal to that of any other member. Each AA circle knows about the needs of its members, and each group can decide how to react accordingly. 7. Is the organization flexible or rigid? Decentralized organizations are very amorphous and fluid. They are constantly spreading, growing, shrinking, mutating, dying off, and reemerging. 8. Can you count the employees or participants? It’s not only that no one’s keeping track, but also that anyone can become a member of an open organization – or likewise withdraw their membership – at any time. 9. Are working groups funded by the organization or are they self-funding? There is often no central well of money. Individual units might receive funding from outside sources, but they are largely responsible for acquiring and managing those funds. 10. Do working groups communicate directly or through intermediaries? In open systems communication occurs directly between members. No roads lead to Rome because there isn’t a Rome. Chapter Three: A Sea of Starfish Other examples of decentralized organizations: Skype Craigslist. The people who use the site run it. The categories we have almost one hundred percent were generated by people in the community. The initial idea was Craig’s. The rest of it was just listening to people and providing the infrastructure to that. Another thing is a culture of trust that works out really well. The big attraction to the site isn’t just free ads. It’s community. Craigslist feels like a neighborhood. In an open system what matters most isn’t the CEO but whether the leadership is trusting enough of members to leave them alone. Apache (not the Indians - web development.) Apache didn’t have a strategic plan on how to move forward. It was a lot more organic – engineers would contribute, and the good patches would be picked up by other users. No one had a set role; people would just help out in the best way they could. No one was really in charge, and the best ideas were the ones that got used. The software was completely open source – anyone could download it for free and anyone could make alterations. If your patches improved the original software in any way, and if enough people like them, they would eventually be integrated into the main program. Today 67% of all Web sites run on Apache. In the face of open systems – where anyone can contribute and everyone can have the software for free – traditional spider organizations are finding that they have to adapt and become more spiderlike. Wikipedia. An online encyclopedia developed by users. “Wiki” = quick. Wiki = a technology that allows web site users to easily (and quickly) edit the content of the site themselves. Has spawned Wiktionary, Wikibooks, Widinews. Seventh principle of decentralization: put people into an open system and they’ll automatically want to contribute. Wikipedia and Encyclopedia Britannica are almost equally accurate. It is a virtual neighborhood. Members themselves take on the job of policing the site. Burning Man. 24/7 decentralized experience. Few rules. Nothing costs money. Gift economy. Everyone becomes a guardian of sorts. When you give people freedom, you get chaos, but you also get incredible creativity. Chapter Four: Standing on Five Legs Granville Sharp seeking to abolish slavery. He wasn’t a Quaker but he worked with them. The Quaker group was organized as a circle, the first of five important foundations of a decentralized organization. Five legs – when all five work together the decentralized organization can really take off. Leg 1 – Circles. Important to nearly every decentralized organization we’ve explored. Each Apache group resembled a circle: independent and autonomous. Once you join, you’re an equal. Its then up to you to contribute to the best of your ability. Until the Internet age, circles were confined to a physical location. Circles can now be virtual. Craigslist has many circles each based in a metropolitan community. Wikipedia – circles are made up of individuals contributing to a particular entry. Some members write the article, others edit it, still others beautify it. Membership becomes highly fluid. When circles take on more than about 14 members the bond breaks down. Circles gain freedom and flexibility when they go virtual, but they lack a degree of closeness and sense of accountability. An AA circle depends on physical contact to keep members accountable to one another. Instead of rules, they depend on norms (AA – norms about confidentiality and support). Norms become the backbone of the circle. Self enforcement. Norms can be more powerful than rules. As the norms of a circle develop, and as members spend more time together, something fascinating happens: they begin to trust one another. Leg 2 – The Catalyst. Leaders of starfish organizations are vastly different from traditional executives. A catalyst is any element that initiates a reaction without fusing into that reaction. In open organizations, a catalyst is the person who initiates a circle and then fades away into the background. They generated ideas and then allow the circle to follow through. They