In this book, the authors address the differences between starfish and spider organizations. A spider has a tiny head and eight legs coming out of a central body. If you chop off the spider's head, it dies. A centralized organization has a clear leader who's in charge. Get rid of the leader and you paralyze the organization. A decentralized organization is a starfish. The starfish doesn't have a head. The major organs are replicated throughout each and every arm.
In 2005, MGM sued Grokster because it allowed the sharing of music and movies over the Internet. Five years earlier, Napster was sued for allowing file sharing. The recording industry went after the people who were swapping the music as well. But this did not prevent the problem of music piracy. The harder they fought, the stronger the opposition grew. The best explanation for these events comes from a book by Tom Nevins about the Apaches.
Spanish explorer Cortes fought the Aztec, who had a central government, and took their gold; killed their leader; and starved the city's inhabitants. Two years later the entire Aztec empire had collapsed. The same fate befell the Incas. But they lost against the Apaches. It was all about the way the Apaches were organized as a society. The Apaches distributed political power and had very little centralization. They persevered because they were decentralized. A centralized organization has a clear leader who's in charge. In a decentralized system there's no clear leader and no hierarchy. The power is distributed among all the people and across geographic regions. Instead of a chief, the Apaches had a Nant'an--a spiritual and cultural leader who led by example. As soon as the Spaniards killed a Nant'an, a new one would emerge. No one person was essential to the overall well-being of Apache society. When attacked, a decentralized organization tends to become even more open and decentralized. Every time the labels sue a Napster, a new player comes onto the scene that's even more decentralized and more difficult to battle. The harder you fight a decentralized opponent, the stronger it gets.
Some examples of starfish organizations:
(a) The Internet is a decentralized starfish network where no one is in charge. Spider organizations have structures, hierarchies, and a president. (b) At Alcoholics Anonymous, no one is in charge. If you were to ask how many members or chapters it has, there'd be no way to tell because it is an open system. An open system doesn't have centralized intelligence; the intelligence is spread throughout the system. Spider organizations weave their webs over long periods of time, but the starfish can take over an entire industry in the blink of an eye. (c) Craigslist attracts three billion page views a month. The way craigslist runs is that people who use it post, and if they find something inappropriate they flag it for approval. So the people who use the site run it. It allows users to interact with each other directly without anybody telling anybody else what they can and cannot do. In an open system, what matters most isn't the CEO, but whether the leadership is trusting enough of members to leave them alone. (d) The first popular browser for surfing the Web came from the University of Illinois. But the University did not respond when engineers sent patches to be integrated, so they decided to post the patches on their own and called the project Apache. The software was completely open-source, and Apache quickly became the industry standard, with 67 percent of websites running on it. (e) Wikipedia allows website users to easily edit, police, and contribute the content of the site themselves. Put people into an open system and they'll automatically want to contribute! When you give people freedom you get incredible creativity and a variety of expressions.
Differences between Spider organizations and starfish organizations:
(a) Most centralized organizations are divided into departments. If a spider loses a leg, its mobility is significantly affected. Units of a decentralized organization are completely autonomous. Cut off a unit and, like a starfish, the organization does just fine. (b) In spider companies, power is concentrated at the top. In starfish organizations, power is spread throughout. (c) Decentralized organizations are fluid. Centralized organizations depend more on rigid structure. It is possible to count the members of any spider organization, but members of starfish organizations are impossible to count because anyone can become a member. (d) Information in centralized organizations is processed through headquarters. In open systems, communication occurs directly between members. (e) In decentralized organizations, the founder plays the role of a catalyst. He would lead by example, but he never forces his views on others. A catalyst gets the decentralized organization going and then cedes control to the members.
Strategies to combat a starfish invasion:
(a) Ideology, the shared philosophy among members, is the glue that holds decentralized organizations together. If the ideology can be successfully changed, the results are detrimental. (b) The Apaches remained a significant threat until the Americans prevailed by giving the Nant'ans cattle. Once people gain a right to property they quickly seek out a centralized system to protect their interests. The moment you introduce property rights, the starfish organization turns into a spider. (c) If you can't beat them, join them. The best opponent for a starfish organization is another starfish.
This is by far the best business management book I have read this year!