I just recently finished reading The Starfish and The Spider: The Unstoppable Power of Leaderless Organizations by Ori Brafman and Rod A. Beckstrom. It was a neat overview of the different elements of decentralized organizations and many of the ways in which they operate and can be superior to centralized organizations.
The book starts with the story of the modern science around memory. Scientists for ages thought that specific neurons and parts of the brain were assigned to specific memories. However, after a lot of testing, they found something surprising about accessing and storing memories in the brain: they are in fact not stored in specific neurons; they are stored everywhere. There turned out to be no hierarchy or chain of command in the brain; memory turned out to be fully distributed. This distributed structure makes the brain more resilient and is the reason why unpleasant memories are difficult to eliminate.
The first major example of a decentralized organization outside of the brain centered around Sean Fanning and Napster. The havoc that Napster wreaked on the music industry as well as the freedom it brought to students and consumers of music were clear examples of the power of decentralized/peer-to-peer organizations. Another example the book looked at was Al Queda, where the leader is hidden, and different terrorist cells operate autonomously. Wikipedia is another important example, where collaborators around the world contribute and police it, all voluntarily. When the founder of Wikipedia was asked by the authors who runs its servers, he responded, "I don't know. The users just take care of it." That seemed pretty neat (and scary) to me. The key takeaway here was that all of these organizations were using the absence of clear and commanding hierarchy structure as an asset.
MGM's Mistake and Apache's Mystery
The book analyzed the way MGM fought Grokster (another P2P file sharing program) in the Supreme Court and compared this to the story of the Apache tribe. When MGM was awarded a winning verdict, they were able to take down a fairly centralized organization for file sharing (Grokster wasn't fully P2P like eMule). The lesson there was that a centralized organization can fall when you kill its center.
On the flip side, the story of the Apache ends differently. When Cortez and the Spanish army arrived, they conquered and annihilated the other tribes who were centralized societies. The Spanish couldn't defeat the Apache just like the record labels in the end couldn't squash file sharing when it became fully distributed. The Apache distributed political power and had little centralization; therefore, the Spanish could never really fully conquer them.
A central organization operates on coercion. An open organization operates on leading by example. People follow someone because they want to, not because they have to.
When attacked, a decentralized organization becomes more decentralized. Napster was centralized and so fell quickly when attacked. eMule was fully open source and distributed with no declared leader or owner. No matter how hard you attack it, you can never fully destroy something so decentralized as that.
The Spider, The Starfish, and The President of the Internet
When the head of a major telco went to Europe for a business meeting pitching the Internet as it was just being rolled out, he was questioned as to who was the president of this new organization (the Internet). It was impossible for his business colleagues to understand that there was no president of the Internet; it's a network of networks that just works together through mutual agreement rather than hierarchical ruling. This was very hard for people to get initially (he had to in the end say that he was in the fact the "President" of the Internet in order to appease his audience).
This was a classic example of people who mistook a starfish for a spider. A spider has 8 legs with a central body. If you chop off its head, it dies. A starfish is totally different. It has separate control of its legs, and its organs are replicated throughout its body. If you chop off any part, it will grow back. In fact, it can replicate itself fully from just one arm. This seems so incredibly cool to me.
For the starfish to move, its arms convince each other to do it; there is no central brain. I absolutely love this metaphor for how certain organizations can operate.
The book explained how Alcoholics Anonymous (AA) is an organization that is a starfish. No one owns it. There is no central intelligence; intelligence spreads throughout the system itself. In this way, a decentralized organization sneaks up on you, mutates, and grows quickly.
The Accordion Principle: Industries swing back and forth between being centralized and decentralized.
A Sea of Starfish
The book went through many examples of products or organizations that took advantage of starfish principles to thrive: Skype, Craigslist, Apache web server software, Wikipedia, Burning Man, and the Quakers. Several principles came out of these examples.
Put people into an open system, and they will automatically want to contribute.
A catalyst is responsible for sparking ideas and then getting out of the way. Here are his or her main tools: genuine interest in others, passion, meeting people where they are, trust, inspiration, tolerance for ambiguity, being ok with saying he or she doesn't know, a hands off approach, and an ability to recede.
A leaderless organization operates through norms, not rules.
Taking on Decentralization
When attacked, a centralized organization get more centralized. Think of army bunkers getting more fortified.
The only ways to attack a decentralized organization is through ideology (convincing them of a new way) or to centralize them by giving them a scarce resource (like money or cows) in order to create internal competition and hierarchy. It is somewhat sad that a right to property and money almost always leads to centralizing an organization.
Fight starfish with starfish.
Hybrid Organizations (The "Combo Special")
The decision around centralization doesn't have to binary. Many organizations have successfully used starfish principles in certain parts of their operations and not others. An example of this is eBay, where the decentralized user ratings are critical to eBay's competitive advantage. The company itself is a spider, but it operates as a centralized company that decentralized the customer experience. They kept centralized what people wanted to know would be secure and regulated: money (i.e., payment through PayPal).
Other examples are Amazon reviews and Oprah book clubs, which decentralized by giving customers an important role. Companies who have open sourced part of their software (like Sun) are further examples. In HR, getting employee ideas and open brainstorming after alignment interviews between random pairs of people across the entire organization is a way to source decentralized opinions for centralized decision making.
The Sweet Spot
The "Sweet Spot" refers to the level of decentralization that's just right for a given organization, and this changes over time and across companies.This chapter looked at the example of Toyota versus GM. GM was way more centralized and used a traditional assembly line process; Toyota used lean principles and let line employees fully dictate how the operations would run. Toyota bet GM that this was not due to culture, race, work ethic, or anything outside of the pure decentralization of operations. Toyota offered to demonstrate this to GM, and this was the start of the partnership that became Nummi, where team leadership had control as opposed to some central authority; Nummi quickly became the most efficient and profitable plant in GM.
Another example of a product that finds some happy medium between centralization and decentralization is iTunes, which allows people to download music quickly and get individual songs (rather than buy full CDs) but does so in a way that's legal and ok with the music industry.
The New World
This final chapter went through the 10 rules of how modern organizations operate, taking into account the starfish principles outlined in earlier chapters:
- Diseconomies of scale from centralization (huge, centralized companies quickly start being less efficient and less effective than smaller, more nimble and distributed ones)
- Network effects
- The power of chaos for creativity (order and structure can often hamper creativity)
- Knowledge is at the edge, not centered (look to the fringes for who has the most cutting edge information)
- Everyone wants to contribute
- Beware of the Hydra response (based on the Greek myth, where attacking a decentralized organization like a multi-headed snake creates more proliferation [of snake heads])
- Catalysts rule
- The values are the organization
- Measure, monitor, and manage (just because something is decentralized doesn't mean you can't measure it; just choose what to measure carefully based on the decentralized structure)
- Flatten or be flattened (decentralize through some hybrid approach or be taken over by someone else who is decentralized)
This was a fun read and now makes me think about centralized and decentralized organizations pretty differently.