Subversive Organizations
Decentralized teams can scale, and the future of organization is the future of civilization.
There is a solution. It is not a form of government, no “ism” or “ocracy’’ will do. It begins with widespread individual action that transforms society — a metamorphosis of social organization in which leadership no longer serves the role it has over millennia. A different type of existence will emerge, affecting all of us as individuals and enabling us to live in a complex world.
To be successful in high complexity challenges requires teamwork. Each team member performs one part of what needs to be done, contributing to the complexity and scale of what the team does while limiting the complexity each individual faces.
—Yaneer Bar-Yam
A quiet transformation is underway. Where hierarchies once dominated, many founding teams have learned that people can be more effective when they organize without formal command-and-control structures. One would think that this recommends an egalitarian or democratic form of organization.
Not exactly.
Subversive Organization Redux
The following offers a sketch of an abstract set of organizational protocols. Once we restore our internal loci of control, we will first need to find each other, then find ways to work together across geographies and scale.
The first secret is to apply the rules of subversive innovation to organizations. Recall that subversive innovation not only challenges the mechanisms of traditional hierarchy but also has liberatory and lateralizing effects on those who adopt it. But how?
Subversive innovators use a simple formulation:
(1) Innovate to lower transaction and cooperation costs,
(2) Increase predation and parasitism costs, and
(3) Reduce exit and switching costs.
The upshot is,
Subversive innovation shifts the balance of power by favoring individual sovereignty and self-organization through enabling lateral relationships. It also reduces the ability of wrongdoers or unjust authorities to exercise control.
By applying subversive innovation internally within an organization, it changes the rules by which participants play—shifting from finite to infinite game dynamics. Even if this sounds to some like a novel or innovative way to manage people, self-organization is rooted in timeless truths. In other words, fidelity to principles is a specific non-technological way to change how we work together.
Three Timeless Truths
Master of organizations, Chris Rufer, has discovered that three core principles serve as protocols for the decentralized organization.
The Mission is the Master—When you are a dedicated member of any decentralized organization, you serve one master, and that is the organization’s corporate purpose. (Profitability is a measure of the organization’s ability to realize its purpose, as revenues exceed costs.)
Do Not Threaten—When you are a dedicated member of any decentralized organization, you practice the virtue of nonviolence and apply what Rufer calls the moral principle of Human Respect, which in this case means abstaining from threatening others with their job.
Honor Your Commitments—When you are a dedicated member of any decentralized organization, exercise integrity by learning your comparative advantage and adopting a role, tell your partners what you will do, and then do what you say you will.
Everything else flows from partners who agree to work according to these core principles as a condition of partnership.
The first principle implies that you are under no obligation to take orders from other members of the organization. The second principle suggests that no other member may threaten you (or anyone) with your job if you fail to obey. The third principle means that you are held accountable to your commitments to serve the mission, and your performance is evaluated based on your execution.
All three principles apply to everyone.
The Corollaries
Significant corollaries recommend themselves, and they should not be viewed as an afterthought.
Take Full Responsibility—If the mission is your master, you should take responsibility for everything in the organization, even if it falls outside your role. In other words, if you see a problem or possibility, you have an obligation, at least, to inform the relevant teams. When everyone takes responsibility for improvement, it prevents buck-passing and helps ensure that counterproductive siloes don’t form around bad ideas or processes.
Respectfully Challenge and Adjudicate—Partners will disagree. It’s essential to develop a culture of respectful challenge so that deliberation, debate, and dialogue become standard practices within the organization as people serve the mission together in good faith. When there is friction among members, they should always acknowledge it and engage an adjudication process. First, the parties should involve a trusted third party. If the disagreement persists, seek a resolution from a formal mediator. Finally, if the formal mediator is unable to resolve the conflict, the parties should seek a binding resolution from a final adjudication board.
Honor Commitments and Gain Agreement—As members agree to contribute value to the organization by serving its mission, they must make short- and medium-term agreements with their partners to collaborate and divide labor. A short-term commitment might be to finish a task by the end of the week. A medium-term commitment might be a letter to one’s team members detailing her roles, responsibilities, and performance expectations for the quarter. Entire teams reach agreements on major courses of action. A member’s remuneration is based on the value teammates place on her performance, which means members receive differential rewards for differential contributions.
Corollaries represent the how to the what of the principles, both of which connect to the why (the mission).
Some Implications
If anyone did ever succeed in fully organizing such a society, it would no longer make use of many minds but would be altogether dependent on one mind: it would certainly not be very complex but extremely primitive—and so would soon be the mind whose knowledge and will determined everything … there would be none of that interplay of many minds in which a lone mind can grow.
—F. A. Hayek
Doctrinally, many of the above principles and their corollaries resemble what we have referred to in the context of broad societal organization.
That is no accident.
Indeed, there is wisdom in the idea that some will be skeptical that an organization can function this way, much less scale. This is why we must criticize by creating. As we transition from hierarchical to networked forms of organization in the voluntary and private sectors, mission-based self-organization develops a thousand more proofs of concept.
Any one of these thousand proofs represents a subversive organization. In other words, if organizations can run without dictators and hierarchies, so also can societies. That possibility is itself subversive.
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