There are a lot of companies within the blockchain space experimenting with new organizational structures. These include hybrid hierarchical models, holocracies, or even free-market-driven mesh-style networks like CONE out of the Brooklyn-based Ethereum venture production studio, ConsenSys.
Blockchain is a decentralized technology, and at first glance, it makes sense to embrace a similar ethos when it comes to organizational structure.
The vision of CONE, and other structures like it, is to create a somewhat utopian, market-driven venture where everyone does work they enjoy and excel at. It’s meant to build micro-economies within the larger organization that allow employees to advocate for themselves, similarly to how an entrepreneur pitches a VC for seed funding.
But nothing is utopian in practice.
To add some context, in the late 1960s—particularly among French, British, and American youth—there was a rhetorical shift in the utopian impulse, from total transformation to personal change, from revolution to desire. This kind of self-reflexivity toward the closures of the utopian imagination was necessitated in the early 1970s by the totalitarian tendencies of the twentieth century. Nazi Germany, Stalin’s Soviet Union, Mao’s China, and corporate America proclaimed their utopian credentials—but with little of the personal happiness and liberty that was supposed to accompany utopia’s realization.
People needed to clear ‘utopia’ from the charge that it was somehow responsible for these totalitarian regimes, thus prompting a renovation of the utopian concept.
Sound familiar? Today, the utopian impulse is still alive but in need of revision. The practical execution of utopian ideals is where the challenges lie in organizational culture.
Organizations, regardless of their structures, don’t exist in a vacuum. Outside cultural challenges and micro-biases, issues of race, gender, sexuality and socioeconomic background, still assert themselves. And most flat organizations end up catering to white, heteronormative male culture.
That’s why companies looking for decentralized organizational structure need to do things differently. They cannot buy completely and indiscriminately into the utopian ideals. Companies must choose to be a little more pragmatic to end up with a culture that’s organically diverse and self-selecting.
If you’re looking to develop this type of culture, here’s what to keep in mind:
Aim for a hybrid culture.
Employees in hybrid cultures strive to find consensus and work together, but there definitely is a structure in place. They don’t use the traditional roles and hierarchies generally found in a corporate environment.
Think of a holacracy like Zappos. Hybrid cultures are flatter and more decentralized than a traditional organization, but they are not a flat organization. It’s more consensus-based. People focus on the things they know need to get done, but lines blur when people help with different functions. This back and forth should feel very fluid and organic.
Each organization has to find that balance for themselves. You probably don’t want the traditional, hierarchical structure that most corporations have. But you also have to recognize that when people say they’re a truly flat organization, they’re usually stretching the truth a little.
Understand real equity.
As a founder, the more people you add to your team, the more you might dilute yourself. But thinking solely about your cap table is not what’s going to get you to your end goal, whatever that might be. You need a team to get there, and that team needs to be aligned and empowered.
By being inclusive and generous, you can create a culture of collective ownership and inclusivity. A lot of companies talk about their flat structures and how everyone is “equal.” It’s up to you whether or not you’re going to walk the walk when it comes to equity.
Let employees self-select.
The idea of a flat organization always runs up against one challenge—who’s going to take out the trash? If everyone’s self-selecting, who’s going to do the job no one wants to do?
This is accomplished by reaching a stage where everyone is so committed to the outcome that people take it upon themselves to do things that are less than ideal. Responsibility is distributed in a way that allows people to work on tasks they’re genuinely happy with.
Most of the team members should be self-selected. By giving people choice, you create a more diverse and inclusive team. But it also creates an environment where you don’t have to worry as much about who’s taking out the trash. Everyone’s ready and willing to do their part.
Find a place for process.
Whether you choose a standard hierarchy or go with a flat organization, the key to success is to be process-oriented.
Start by creating processes from day one. How are you going to develop your software? How are you going to roll out a product successfully? How are you going to align everyone around your goals?
Focusing on your processes allows you to feel safe enough about your progress that you can experiment in different ways. You don’t need a true hierarchy because everyone is operating under a common set of assumptions.
Adjust to growing pains.
As a whole, organizational culture is going through a transformation.
Today, teams include remote workers and networks of independent contractors. And many companies are transitioning to distributed teams. They’re using networks of specialists—people who may be working on multiple projects with multiple other companies at the same time.
And that comes with a host of questions. How do you make sure your IT specialist is there when you need her? How does she know she can rely on you when she needs work? Is there a way to align people with several different companies so they can still get benefits and a sense of security?
The answers to those questions are complex. A new network and organizational models are going to develop as people attempt to answer them. Each company will have to make their own decisions, but as the idea of organic culture develops and matures, the result will be more naturally-structured, fluid organizations.