Just finished a great book by Ori Brafman and Rod Beckstrom titled The Starfish and the Spider: the Unstoppable Power of Leaderless Organizations. Thanks to Sally Parker of GLBio for the recommendation. I’d suggest anyone interested in social science applications of biomimicry, namely biomimetic business development, give it a read. A free preview (intro and chapter 1) is available online.
The authors compare traditional top-down organizations to spiders. If you cut of a spider’s head, it dies. In contrast, a decentralized organization is more like a starfish. If you cut off a starfish’s leg, it grows a new one, and the severed leg itself can grow an entirely new starfish. This is because the starfish’s major organs are replicated in each arm. (but don’t take the analogy at face value, decentralization with respect to organization is more about having multifunctional employees versus clone skillsets) Brafman and Beckstrom explore the resilience achieved through decentralization using case studies like Wikipedia, Craigslist, and Skype.
But in my opinion, the most interesting case study is eBay – a hybrid spider-starfish organization. What eBay has opted to decentralize, is its seller policing. Buyers rate sellers, incentivizing honest product descriptions and dependably on-time deliveries. Established sellers with high ratings are able to earn an 8.1% premium on their products. In essence, every buyer rating increases eBay’s network value. The collective intelligence (swarm intelligence!) of the ratings contributors has emergent value that far exceeds the sum of the parts. Many new organizations (perhaps more appropriately referenced as systems) take full advantage of this principle of swarm intelligence. 99designs, PeoplePerHour, Threadless, and Quirky are great examples. [Side note: who else thinks there should be a Quirky that caters to our most unencumbered thinkers: kids 10 and under?!]
A commonality between all these companies is how freely they share company statistics a traditional management team might keep close to the chest. For example, the homepage of 99designs, a project in crowdsourcing for logo/web/book cover/other designs, has real-time stats about the number of design contests currently open, total number design contests hosted by the site to date, total $s prize money currently offered by open contests, and total $ designer payouts in the previous month. Aside from swarm intelligence, it seems company advertising might also be capitalizing on herd behavior. Every time the counter clicks, more designers are compelled to join the 99designs community.
Lastly, The Starfish and the Spider left me contemplating: can we directly apply anything we know about the architecture of resilient computer systems to our organizations? A lecture given by Keith Moore of HP at UAkron a few weeks ago on parallel distributed processing led me to this question. Parallel distributed processors are more adept than traditional processors at minimizing unplanned outages caused largely by what Keith referred to as “change management.” Sounds familiar…