The book by Ori Brafman and Rod A. Beckstrom elaborates on the differences between central and decentralized organizations. Traditional top-down organizations are described as spiders and the starfish is synonymous with the decentralized organization.
The decentralized organizational structure is also described as circular in this book. Circles without hierarchy and structure, where nobody has the power to enforce rules. The circle is held together by common standards, where trust is one of the cornerstones.
The decentralized organization (= starfish) is described on the basis of eight principles:
- When attacked, a decentralized organization tends to become even more open and decentralized.
- It’s easy to mistake starfish for spiders.
- An open system doesn’t have central intelligence; the intelligence is spread throughout the system.
- Open systems can easily mutate.
- The decentralized organization sneaks up on you.
- As industries becomes decentralized, overall profits decrease.
- Put people into an open system and they’ll automatically want to contribute.
- When attacked, centralized organizations tend to become even more centralized.
These principles also show the power behind decentralized organizations. The book describes the music industry as an example and how decentralized peer-to-peer (P2P) networks have made downloading possible. Another example is the recent rise of cryptocurrencies. An important learning point is that if decentralized organizations centralize, they are easier to control. That is precisely why P2P and blockchain networks do not have central ownership.
A hybrid organization creates the opportunity to benefit from two worlds. Many organizations are still exploring hybrid organizational structures, whereby the ideal balance between centralization and decentralization must be found. If a company is able to (permanently) find the ideal position on the interface of these two forces, then the opportunity arises to profit from both worlds.
Two types of hybrid organizations are described in the book. A centralized company that decentralizes the customer experience and a centralized company that decentralizes internal parts of the company. However, these typifications assume that the central organization is the starting point. A reverse approach is also possible, with a decentralized organization centralizing parts of the company.
The catalyst role
The success of a decentralized organization often depends on the presence of a catalyst. A catalyst does not come with ready-made solutions. He or she builds mutual trust relationships within the organization and is interested in listening to others. A catalyst in a decentralized organization is therefore not followed by coercion, but because people feel understood by him or her. The innovative and creative power of decentralized organizations comes from such conversations, where ideas arise bottom-up.
The catalyst is therefore synonymous with a change agent instead of a guardian of tradition. Especially in situations that require radical change and creativity, a catalyst has added value. In the book, the table on page 130 shows the differences between a CEO and a catalyst.