Book Notes – Page 4 – Marks in the Sand

A brief summary of the book “The Starfish and the Spider: The Unstoppable Power of Leaderless Organizations” by Ori Brafman and Rod Beckstrom.

Introduction

The starfish and spider in the title serve as a powerful metaphor for two types of organization, and illustrate the contrast between them.

The Spider

The Spider represents the centralized organization. A spider is controlled by its head. Cut off its head and it dies.

The Starfish

The Starfish represents the decentralized network. It has no head, and its major organs are replicated throughout each arm. Cut it in half and you get two starfish.

Principles of Decentralization

When attacked, a decentralized organization tends to become even more open and decentralized (p.21)
It’s easy to mistake starfish for spiders (p.36)
An open system doesn’t have central intelligence; the intelligence is spread throughout the system (p.39)
Open systems can easily mutate (p.40)
The decentralized organization sneaks up on you (p.41)
As industries become decentralized, overall profits decrease (p.45)
Put people into an open system and they’ll automatically want to contribute (p.74)
When attacked, centralized organizations tend to become even more centralized (p.139)

How to Recognize Starfish?

From Chapter 2:

Question	Spider	Starfish
Is there someone in charge?	Yes. Depends on hierarchy.	No. Flat structure. Relies on influence rather than control.
Are there a headquarters?	Yes.	No. Location is flexible.
If you thump it on the head, will it die?	Yes. Take out the HQ and it dies.	No. If you take out the leaders, new leaders emerge.
Is there a clear division of roles?	Yes. Divided into departments.	No. Anyone can do anything. Units are autonomous.
If you take out a unit, is the organization harmed?	Yes. Every department is important.	No. The network can rebuild itself.
Are knowledge and power concentrated or distributed?	Centralized. Information and power are concentrated at the top.	Distributed. Information and power are dispersed throughout the network.
Is the organization flexible or rigid?	Rigid. As a result of their structure.	Flexible. The organization is amorphous and fluid, leading to agility. Constantly growing / shrinking / mutating / spreading / dying / re-emerging.
Can you count the employees or participants?	Yes. Membership is fixed and closed.	No. Membership is fluid and open. Nobody is able to keep track.
Are working groups funded by the organization or are they self-funding?	Centrally funded. Without funding, departments quickly die.	Self-Funding. Individual units are responsible for obtaining and managing funds.
Do working groups communicate directly or through intermediaries?	Through intermediaries. Important information is processed through HQ. “All roads lead to Rome”.	Directly between members. No roads lead to Rome, because there is no Rome.

Example Starfish

Mostly from Chapter 3:

Skype
Craigslist
Apache
The Apache
Wikipedia
Burning Man Festival
eMule

The Five “Legs” of a Starfish

From Chapter 4:

A decentralized organization stands on five legs… When all five work together the decentralized organization can really take off.

1. Circles

Each group is independent and autonomous. Everyone in a group is an equal, each contributing according to ability. Group membership is open and fluid – people come and go as they please. Instead of rules, groups depend on norms and developing trust between individuals.

2. The Catalyst

Circles don’t form on their own. A catalyst is the person who initiates a circle. They develop ideas, lead by example, and inspire others. They then recede into the background, trusting the group to take appropriate action.

3. Ideology

Ideology is the glue that holds a decentralized organizations together.

4. A Pre-existing Network

Most successful decentralized organizations launched from a pre-existing, decentralized network.

5. The Champion

The Champion is an evangelist or salesperson for the group. Champions have excellent people skills, high energy and limitless tenacity. They relentlessly promote the group and its ideas.

The Catalyst’s Tools

From Chapter 5:

Genuine Interest in Others

The Catalyst’s view is that people are full of interesting stories, like walking novels.

If you find someone boring it’s only because you, the listener, haven’t asked the right questions or found that person’s true passions.

Catalysts are great listeners …

[When someone] cares about what we’re talking about… we tend to open up and reveal more about ourselves.

… and this helps people to be open to new ideas.

When we feel understood… we are most open to something new.

Loose Connections

Catalysts thrive on meeting new people and making new connections.

Knowing so many people allows a catalyst to make connections between individuals who would otherwise never meet.

Mapping

Catalysts have a strong sense of where people fit into their social networks – who people know, how they relate and how they fit into the Catalysts mental map. The Catalyst excels at making connections and forming new circles.

Desire to Help

The fuel that drives the Catalyst is the genuine desire to help others.

Passion

A Catalysts passion results in action.

[A decentralized organization] can’t draw upon command-and-control to motivate participants, it needs a strong and ongoing ideology to keep them going.

Meet People Where They Are

The Catalyst is neither pushy nor persuasive. Rather, the Catalyst helps people realize their latent potential.

When people feel heard, when they feel understood and supported, they are more likely to change. A catalyst doesn’t prescribe a solution, nor does he hit you over the head with one. Instead, he assumes a peer relationship and listens intently. You don’t follow a catalyst because you have to—you follow a catalyst because he understands you.

The Catalyst avoids giving advice, because that leads to hierarchy. Instead, the Catalyst inspires others to change.

Emotional Intelligence

Catalysts develop strong emotional connections, and help the organization bond emotionally. The Catalyst, “Weaves emotional connections into the very fabric of the organization.”

Trust

The Catalyst trusts people to do what is right.

Inspiration

The Catalyst inspires others to work toward a common goal without material reward.

Tolerance for Ambiguity

Catalysts accept that decentralization entails ambiguity. They know there are questions that can’t be answered – about the size of the organization, or about exactly who is doing what – and they use this uncertainty as an opportunity to be innovative.

Hands-Off Approach

Having lit the fire, the Catalyst gets out of the way, letting people figure out for themselves what to do and how to do it.

Receding

The Catalyst’s involvement dwindles as a movement takes off, allowing other people to take the lead and move their relationships forward.

The CEO vs the Catalyst

The main difference:

The CEO	The Catalyst
The boss	A peer
Command and control	Trust
Rational	Emotionally intelligent
Powerful	Inspirational
Directive	Collaborative
In the spotlight	Behind the scenes
Order	Ambiguity
Organizing	Connecting

Taking On Decentralization

From Chapter 6:
When attacked, decentralized organizations become even more decentralized. This makes them difficult to kill.

Change Their Ideology

Changing ideology isn’t easy. Force doesn’t work. Manipulation and control result is people becoming defensive and closed-off. Ideological change only happens when you demonstrate to people that you genuinely want to help them. Building that kind of trust takes time and energy.

Centralize Them

If you can influence the network so that it concentrates power, prestige and property on a few individuals then it will centralize. This is because people want control over things that they own, and control requires structure.

The moment you introduce property rights into the equation, everything changes: the starfish organization turns into a spider. If you really want to centralize an organization, hand property rights to the catalyst and tell him to distribute resources as he sees fit.

Decentralize Yourself (If You Can’t Beat ‘Em … Join ‘Em)

Requires courage and innovation, as old strategies won’t work. Change the way you do business, as old sources oFor example, seeking revenues from alternative sources. Alternatively, becoming a hybrid organization, drawing on strengths of both.

Hybrid Organizations (The Combo-Special)

From Chapter 7:
These are organizations that are neither pure spider nor pure starfish. Decentralizing elements of your business can help you stay competitive.

Decentralize the Customer Experience

…by creating a network around your product:

Give customers a voice.
Encourage customers to work together to solve their own problems.
Let customers build your product.

Examples:

Ratings and reviews (e.g. Amazon reviews, ebay seller ratings).
On-line forums / user groups. Can be for a specific product, company or industry.
Crowd-sourcing (e.g. open source software).

Decentralize Parts of the Business

Split the business into smaller, relatively autonomous units.
Encourage employees at all levels to contribute to strategic decisions.

The Decentralized Sweet Spot

From Chapter 8:

The decentralized sweet spot is the point along the centralized-decentralized continuum that yields the best competitive position. In a way, finding the sweet spot is like Goldilocks eating the various bowls of porridge: this one is too hot, this one is too cold, but this one is just right.

Hybrids organizations may go through several iterations until they find the sweet spot between centralization and decentralization. The sweet spot can change, and successful organizations are willing to adapt to this change.

The New World

From Chapter 9:
“When the rules of the game suddenly change… it’s easy to be left behind”, and “the forces of decentralization have created a new set of rules”.

Rule 1: Diseconomies of Scale

Traditionally, being big was considered safer than being small. The power that comes from being big outweighed the flexibility that comes from being small. But small size combined with a large network combines the benefits of flexibility and power. New markets are entered easily, and the organization can survive on minimal revenue. Costs are low, but influence is high. The small can rule over the large.

Rule 2: The Network Effect.

Each new member adds value to the whole network. Starfish organizations benefit more from this “network effect”. The cost of adding new members is tiny, and the value they add benefits everyone. Members stay loyal because they value the network.

Rule 3: The Power of Chaos

Organization and structure are often seen as essential to success. However, the unstructured nature of a starfish organization nurtures innovation. Good ideas gain momentum and get implemented and replicated.

Rule 4: Knowledge at the Edge

Starfish organizations can draw on the valuable information at the edges of the organization.

Rule 5: Everyone Wants to Contribute

People have a desire to share, and by doing so, add value to the community.

Rule 6: Beware the Hydra Response

If you cut off the head of a decentralized organization, you’re likely to find that two more will grow in its place. There are ways to battle a decentralized organization, but the worst thing you can do is to try to cut off its head.

Rule 7: Catalysts Rule

Catalysts are vitally important to decentralized organizations. They inspire people to action, map out the network and then they let go. If you can turn a catalyst into a CEO, the whole network is at risk.

Rule 8: The Values are the Organization

Ideology underpins a decentralized organization. Remove it, and the organization will collapse.

Rule 9: Measure, Monitor, Manage

Despite their lack of structure, it is possible to take useful measurements of a decentralized organization’s health and results.
Counting individual members may be impossible; it is better to focus on circles:

How active is the circle?
Is the circle healthy?
Are circles independent?
What kind of connections exist between circles?
Are members actively participating?

…and the network as a whole:

How distributed is it?
Is it growing?
How is it changing?
Is it becoming more or less decentralized?

Catalysts typically ask questions like these intuitively. They are not interested in reports or control. Instead, they care about members. They connect people, and “maintain the drumbeat of the ideology”.

Rule 10: Flatten or be Flattened

Increasingly, organizations find that they need to embrace decentralization in order to survive. The most effective strategy is, often, to be come a hybrid. This can appear messy, at first, but:

When we begin to appreciate their full potential, what initially looked like entropy turns out to be one of the most powerful forces the world has seen.