orgtheory.net

Decentralized and Centralized Organizations

Keith Sawyer 

I have just finished reading a marvelous book, The Starfish and the Spider by Ori Brafman and Rod A. Beckstrom. (Full disclosure: Ori Brafman endorsed my new book Group Genius.) SS (I’ll call it by the title’s initials) is, at root, a book about complex social networks, and the principles and stories in it will be immediately recognizable to scholars who study social networks, complex dynamical systems, and social emergence. But what’s brilliant about this book is that it’s so accessible; not a single academic citation, not even in the notes. Instead, their point is made with fascinating stories, and they make concrete recommendations that managers will easily be able to apply to their own organizations.

The book’s unifying thread is the distinction between two kinds of organizational forms. A spider is a centralized organization, the hierarchical company of the 1950s. If you cut off a spider’s head, it dies. The starfish is a decentralized organization, what scholars would call self-organizing, self-managing, or emergent (although these terms don’t appear in the book). A starfish doesn’t have a head. If you cut off one leg, the starfish grows a new one; and the detached leg can actually grow itself another four legs. I knew that; but what I didn’t know was that a starfish has no central nervous system. As Brafman and Beckstrom report, neuroscientists have discovered that what happens when a starfish starts walking is that the urge to walk begins in one of the five legs, and then somehow the other four legs are convinced to join in (scientists don’t yet know how this happens).

This makes the starfish an apt metaphor for leaderless, self-managed organizations. Their examples include Al Qaeda, Wikipedia, the Apache’s resistance to the Spanish colonists, Alcoholics Anonymous, and how the abolitionist movement piggybacked on the Quaker community’s decentralized organization. Of course, the Internet is frequently mentioned–not only as a starfish itself, but as a mechanism that makes the formation of starfish much more easy than it was in the past. These are familiar stories, but SS does a wonderful job of identifying the common themes and translating them into practical advice.

There are a handful of recent books that emphasize leaderless, self-managing organizations, including Leadership Ensemble, written by the director of the Orpheus Chamber Orchestra of New York, a group that performs without a conductor. Other recent books with similar themes include Swarm Creativity, Democratizing Innovation, and Smart World. In my own book Group Genius, I refer to starfish organizations as “collaborative webs” and I argue that breakthrough innovations always emerge from these distributed networks, rather than in centralized bureaucracies.

The most wonderful aspect of SS is how incredibly easy it is to read; you can finish it on a short plane ride. And you’ll remember the take-home message; I counted eight principles of decentralization, including “open systems can easily mutate” (p. 40) and “when attacked, a decentralized organization tends to become even more open and decentralized” (p. 21). Their final chapters provide advice on both how to fight a starfish (this book has apparently been widely read in the U.S. military to provide tips on countering Al Qaeda) and how business organizations can transform themselves into hybrid organizations that mix the best features of centralization and decentralization (eBay is their example of a hybrid organization that is a centralized company, but one that decentralizes the customer experience, for example with its user rating system). What they call the “sweet spot” is the perfect blend of centralization and decentralization, given your company’s competitive environment and customers.

I’m intrigued by this book because it contains stories I already know, and has unifying themes I’m deeply familiar with, and yet I still enjoyed reading it and felt like I learned something new.

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Written by keithsawyer

August 20, 2007 at 5:19 pm

4 Responses

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  1. Another interesting book in this vein is George Huber’s The Necessary Nature of Future Firms: Attributes of Survivors in a Changing World. He’s more explicitly concerned with knowledge management and, in addition to considering the structure of learning organizations (i.e. centralization vs. decentralization), emphasizes the entrepreneurial skills of future-minded managers. It’s sort of a mix between a business press and an academic book.

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    brayden

    August 21, 2007 at 4:14 pm

  2. Thank you for that recommendation! I looked it up on Amazon.com and the praise this book has gotten is phenomenal: endorsements by Kathleen Eisenhardt, Andrew Van De Ven, Linda Argote, and many others all say it is a “must read.”

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    Keith Sawyer

    August 21, 2007 at 4:40 pm

  3. […] specifically this entry 2007/08/20/decentralized-and-centralized-organizations/ BUY THE BOOK. (5 out of […]

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  4. […] What IT activities are most fully outsourced?  End user support and the help desk. What a surprise! Application development and application maintenance are least likely to be fully or partially outsourced.  Organizations with very centralized IT organizations are more likely to fully outsource IT activities than those with decentralized organizations. […]

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