How to Decentralize Your Organization
Ori Brafman & Rod A. Beckstrom; The Starfish and the Spider
The Five Things You Need to Create a Decentralized Organization
RAP5: Creating Fusion
To fuse the best of spiders and starfish two primary strategies are available.
Firstly, decentralize the customer experience by letting them have a role in business.
Secondly, decentralize internal parts of the business into separate independent business units.
Here’s some suggestions as how you can decentralize your organization.
? Decentralize the Customer Experience
Creating a Fusion Organization is like building a playground.
First, you need to add a slide, then a swing, a climbing frame and make sure you build a fence around the playground.
Second, we want the kids to play fair so we need to make some rules.
How about… only one person on the swing at a time, no kicking, no foul language…
Third, we want to let the kids play.
That’s it, just let ‘em go and enjoy themselves.
Three Steps to Creating a Fusion
- Create the Structure : Define the system or process of the organization. Ebay built a website; Big Brother built a house and Skype built peer-to-peer software.
- Design the Cultural Rules : Share your ideology and design some rules to represent it. Ebay has feedback points to build trust; Alcoholics Anonymous has the 12 step process and the Internet has software standards.
- Let People Play : That’s it just let ‘em loose… Ebay provides DIY tools for buying and selling; Skype lets you make calls to who ever you want and Amazon lets customers make recommendations.
? Spin-off Business Units
- Run the business unit ‘as if’ they are stand alone businesses with their own profit/loss statement.
- Start by spinning off a project team.
- Give them a separate budget, separate facilities and their own team.
- Encourage them to be innovative and create their own objectives.
- Let them establish their own cultural rules.
- Let business units compete against each other paying full retail prices for services.
Actions: How to let your customers contribute…
- Instruct : Let customers provide instruction to others through a forum or a wiki eg Quicken, Adobe
- DIY : Give your customers tools to help themselves or help you, For instance, let customers police your website eg Ebay, Wikipedia
- Create : Let customers make their own products or serve themselves eg IBM’s support of Linux, Sun Microsystems making its software open-source
- Shape : Let customers shape your products eg Google’s Page Rank/News – user habits define the rankings; Brewtopia lets users design their own beer
- Voice : Give your customers a voice eg Oprah’s Book Club and Amazon’s Recommendations