DAO The Way Part 13
When DAO or a decentralized autonomous organization gave its idea about the flat organization, everyone had doubts. However, such an idea of the flat organization had long existed before DAO and had been tested in many companies. DAO will become a form of the company.
Let’s explore.
Table of Content
Holacracy
Organization Structure
How Flat It Can Be
What is the Company For
In Conclusion
Holacracy
The holacracy is a system that gives back power to all individual employees so that they can work without going through a bureaucratic decision-making process. It claims to distribute authority and decision-making through a structure of self-organizing teams rather than vested in a management hierarchy. Simply, the relationship between employees and management is not dependable. The term holacracy is even dated before decentralization.
Although holacracy is similar to DAO, it is not exactly the same. But the core idea is to make the organization flat.
Organization Structure
Of course, everyone wants to become their own boss at some point. Does that mean the organization will fulfill your wishes?
There are five types of organizations that exist in the corporate world:
The traditional hierarchy: like Government Entities
Flatter organization: like Cisco
Flat organization: like Valve
Flatarchies: like Google
Holacratic organization: like Zappos and Medium
Even though people complain about the hierarchical organization, there are no more strictly hierarchical organizations in the private sector because it is widely outdated and inefficient.
Companies nowadays are flatter than you think and with fewer management layers. However, how flat the organization can be is a question to explore.
How Flat It Can Be
It turns out that employees hated the flat organization! Or at least before COVID hit the world.
Take an example of the company Valve, and it was described as a disaster. It turned out the environment was like a high school with popular kids on the top, trouble makers, and everyone in between. The problem of the flat organization: the company was owned by few. Employees were running around without empowering themselves with actual power.
Another example is Holacracy from Zappos. It took Zappos 5 years to completely turn themselves into Holacracy. Then it quietly backed away from Holacracy. In the same situation, the company spent too many resources to figure out operations while profits did not agree with such spending.
Medium is another company that implemented Holacracy, and they completely abandoned it after the trial.
The same problem the many companies later found out: spent too many resources figuring out what to do and received too little profits.
That does not mean it will not work. The problem is with the company culture itself.
What is the Company For
The company is a legal entity to form groups of people to make profits and to serve their shareholders. It later shifted the mindset of shareholders to all shareholders, including customers, employees, suppliers, and local communities.
It got shifted again after the COVID. It is to form a culture to accomplish a mission through a form group.
The idea of a company becomes a solution to a problem.
DAO, on the other hand, is one of the solutions to a problem.
In Conclusion
DAO will become one form of the company’s structure since the purpose of the company has been.
