Decentralization: Moving Towards a Leaderless Organization

I would like to share on the interesting classifications of organizations based on a book I had read, “The Starfish and the Spider”. The author classifies organizations into two categories – they are either spiders, with a traditional hierarchy and top-down organization, or they are revolutionary starfish, which rely on the power of peer relationships. With centralized systems, we know who is in charge, and these leaders make decisions in a specific place. In decentralized organizations, there is no leader, no hierarchy, and no headquarters; it is an open system. These systems are not complete anarchy, however. Rules and norms do exist, but they are not enforced by any one person. Rather, the power is distributed among all the people involved across any number of geographical regions.

This classification got me thinking about the fundamentals: what does “leadership” entail – is the existence of leadership beneficial for society? What happens when no one is in charge in an organization? Would instead a “leaderless” organization, as encapsulated in the trend of decentralized organizations, be better?

Through studies, researchers have concluded that leadership could be either good or bad, depending on the leadership style. For example, transformational leadership is good, whereas command and control tend to be ineffective and hence classified under the bad side of things. However, fundamentally, the myth of leadership creates the belief that only a relatively few “gifted” individuals can be anointed leaders and so trusted to make the decisions and do the commanding and controlling of everyone else. It makes assumptions about both leaders and followers – with detrimental consequences for both. A dichotomy is created, two categories: one of leaders – a select and privileged few; and the second of followers – the vast majority. So you get secrecy, distrust, overindulgence, and the inevitable sacrifice of those below for the benefit of those above. When we use the word “leadership,” we immediately create a ranked division of people in ways that do not serve healthy organizational relationships.

Contrary to leadership whereby its existence creates negative division within the organization, a decentralized and leaderless organization brings about numerous benefits. Fore mostly, improved motivation. A decentralized organisation structure is one which facilitates delegation, communication and participation, hence providing greater motivation to its managers for higher productivity. Secondly, decentralization encourages personnel development. Capable personnel are developed by empowering and delegating individuals the authority to make important decisions. Such wide exposure gives them opportunity to grow and have self-development, hence reinforcing this self-sustaining loop of developing quality individuals for the leaderless ecosystem. Thirdly, decentralization makes decision-making quicker and better since decisions do not have to be referred up through the hierarchy, hence allowing for quicker and better decisions at lower levels to be taken. Therefore it comes as no surprise then that decentralized starfish organizations can sneak up on spiders – centralized organizations – because starfish are nimble; they mutate and grow quickly.

Despite the discussed move towards decentralized and leaderless organizations, it would be useful to consider its potential pitfalls. Firstly, the difficulties of according blame. As a society we want to point our fingers at someone – an individual. The murkiness of pointing our fingers at a leaderless group makes it difficult to find a target for our energy (either positive or negative) and it is somewhat unsatisfying to the public to get angry at a faceless corporation when it comes to a specific issue. Secondly, decentralisation may lead to inconsistencies (i.e. absence of uniformity) at the organisation level. For example, uniform policies or procedures may not be followed for the same type of work in different divisions. Given these cons of embarking on a decentralized structure, just to list a few, organizations ought to carefully weigh the benefits and costs prior to embarking on the leaderless path.

Part of the concept of peer thinking is that inherent in every organization is the wisdom and competence to make this happen and to apply the assumptions, logic, and practices of peer thinking to each unique situation. However, are all organizations indeed suited for decentralization/ leaderless-ness? On top of the cost-benefit analysis of embarking on a decentralized model, companies should ascertain the nature of the organization to evaluate and hence determine whether a fit with a decentralized culture exists, and is necessarily compelling. I personally feel that certain characteristics of an organization will make it more inclined towards the adoption of leaderless-ness, and benefit to a greater extent from decentralization than other organizations. Basically, decentralized structures work best when a company’s main point of differentiation is innovation. Organizations that are competing in a rapidly evolving industry, and working with short product life cycles would be inclined to adopt the discussed model. In such cases, organizational teams need to be nimble to respond to a rapidly changing environment; internal alignment with the fast-changing external environment. From e-commerce retailers like Zappos to tech companies like Valve (famous for having no bosses), flat and decentralized organizations are prospering.

In conclusion, it ought to be noted that in bringing across “cons” of leadership within an organization, the positive effects that emerge from good leadership styles as described in present literature are real and should not be ignored. Instead, they serve merely to propel us into thinking about alternatives such as leaderless-ness and decentralization, as well as their benefits. Furthermore, in light of the costs, and benefits being contingent upon the nature of an organization, the choice of embarking towards decentralization should be carefully thought through.

Leave a Reply

Your email address will not be published. Required fields are marked *