Love this & it very much resonates.
I don’t think it’s a coincidence that questions on all of these things and more have been surfacing at the same time. Questions on purpose, direction, vision, strategy, budgeting, product, org design, governance, design, etc. They all look like symptoms of the “transition to the DAO”.
Right now, we have models for how these things work today. Most needs are unlocked through specific individuals (ie founders or FC). When that power is distributed, the question becomes who has authority and what will be the new decision criteria?
If we want to take away top-down decision making, the decisions that were previously made top-down must be distributed throughout the DAO, and not just to new, smaller, embedded, top-down structures, but to entirely new processes of decision-making. We’re at the stage of figuring out that process, and the vacuum created is kicking up a lot of questions. Rather than who has authority? we could reframe the question to how can we operate without an authority? or how can we give everyone autonomy?
And how do you decide on a decision-making process without a decision-making process to decide it?
Reinventing Organizations is a book with some good food for thought on many of these topics:
Self-management requires an interlocking set of structures and practices. […] Change only the structure, though, and you are left hanging in midair. With the pyramid gone, many of the most fundamental organizational processes need to be reinvented―everything from decision-making practices to information flow, from investments to performance evaluations and compensation processes. We need answers to some very basic questions: if there is no longer a boss to call the shots, how do decisions get made? Who can spend company money? How is performance measured and discussed? What prevents employees from simply slacking off? Who gets to decide who deserves a salary increase or a bonus?
[…]
If there is no formal hierarchy, how are decisions made? Can anybody just make any decision? That sounds like a recipe for chaos. Are decisions then made by consensus? That sounds exhausting and impractical, certainly for organizations with hundreds or thousands of employees.
Towards the end of your post you wrote:
However, today, people like Thom and Kai are proposing potential solutions in the form of vision/values 2 (Thom) and new team formations 2 (Kai) that could replace current Foundation Council’s core functions with more collaborative processes.
It sounds like you’re alluding to something here that feels worth emphasising — that the existence of these posts is in some ways more important than the content within them. That’s not a comment on the quality of the content in those posts, but to say that the emergence of ideas in this way, and a culture and process of being able to discuss and implement them, is what ultimately needs to happen to be able to replace centralised, top-down decision making.
You refer to a common feeling and common questions that come up amongst contributors, many of which point to a lack of connection, understanding and resonance between contributor and DAO, relating to purpose, culture and process.
[…] a common feeling amongst contributors is, ‘Are we heading in the right direction? What direction are trying to go toward?’ Usually the CEO/Founders would be responsible for this question, but in a headless organization, we need to agree on a general direction, exploration boundaries, or at least what we’re trying to discover.
[…]
As future individuals or teams onboard, they’ll want to know; how is our work relevant to the greater group/direction? Not just defined by the relationship between teams that work together, but in a larger sense - how would I know that the work I’m delivering is valuable?
I think addressing that disconnection is key, and I see this idea of resonance between contributor and DAO as one of the important pillars of a healthy, functioning, decentralised org.
Bear with me while I get a little wooey and esoteric with some more excerpts that I think give an interesting perspective on this.
On the relationship between organizational and individual purpose
Most organizations today feel that they are in business to get stuff done, not to help people figure out their calling (and in these soulless organizations, many people would be reluctant to explore subjects as intimate as one’s personal calling). Yet individual and organizational purpose go hand in hand. It’s at the juncture where organizational purpose and individual calling start to resonate with and reinforce each other that truly extraordinary things happen. The more clarity there is around what the organization is called to do, the more people can enter into resonance with it. And the more people know about their calling, the more they can contribute to the organization’s energy to do its work in the world.
On purpose as it relates to strategy
The way Teal Organizations think about purpose turns the typical strategy process on its head. In traditional corporations, strategy is decided at the top. It’s the domain of the CEO and the management team (supported in large corporations by a strategy department, a Chief Strategy Officer, or outside consultants). At regular intervals, a strategy process produces a thick document that sets out a new direction. The plan, and the change projects to put them in place, are then communicated top-down to the organization, often with some “burning- platform” message: we need to change, or else …
In Teal Organizations, there is no strategy process. No one at the top sets out a course for others to follow. None of the organizations I have researched had a strategy in the form of a document that charts out a course. Instead, people in these companies have a very clear, keen sense of the organization’s purpose and a broad sense of the direction the organization might be called to go. A more detailed map is not needed. It would limit possibilities to a narrow, pre-charted course.
With the purpose as a guiding light, everyone, individually and collectively, is empowered to sense what might be called for. Strategy happens organically, all the time, everywhere, as people toy with ideas and test them out in the field. The organization evolves, morphs, expands, or contracts, in response to a process of collective intelligence. Reality is the great referee, not the CEO, the board or a committee. What works gathers momentum and energy within the organization; other ideas fail to catch on and wither.
On purpose as an emergent phenomenon
It’s us humans that can tune into the organization’s evolutionary purpose; but the key is about separating identity and figuring out “What is this organization’s calling?” Not “What do we want to use this organization to do, as property?” but rather “What is this life, this living system’s creative potential?” That’s what we mean by evolutionary purpose: the deepest creative potential to bring something new to life, to contribute something energetically, valuably to the world. … It’s that creative impulse or potential that we want to tune into, independent from what we want ourselves.
On the effect of collaborative creation
These large group techniques can energize organizations in a way that top-down strategies cannot. Something extraordinary happens when a vision emerges collectively, with everybody in the room. People make a personal, emotional connection with the image of the future that emerges. And they take charge of implementing the vision: project teams emerge on the spot, based on people’s interests, skills, and talents. Strategy is no longer the domain of a few minds at the top, and implementation is no longer a mandate given to a few program managers. A whole organization is mobilized to sense into the future and help that future unfold.
There are some interesting and practical ideas relevant to this discussion in that book, including some on the topic of decentralised management structures, project management, decision-making mechanisms and shared purpose.