Decentralizing Your Business

The new book The Starfish and the Spider argues that decentralized organizations can overtake centralized behemoths

by Keith McFarland

In the early months of the war in Iraq, the U.S. military was overwhelmed by the need to get knowledge into the hands of the troops on the ground. Army lieutenants and captains were dropped into hostile territory for close-quarters combat and had to quickly master everything from a new language to understanding the web of warring clans to coping with lethal improvised explosive devices. So the first generation of platoon leaders to assume command in a full-scale war since the dawn of the Internet age created their own online community and started helping each other.

While the brass was figuring out how to get the most basic information out to the troops, the troops were taking charge of their own destiny—sharing what they were learning on the ground and quizzing each other when they were stumped. Companycommand.com, a free-form community of sharing and collaboration created by two young officers in 2000, quickly outstripped Central Command in its ability to get knowledge to where it was needed. A companion site for lieutenants called platoonleader.com followed. When Coalition forces invaded Iraq, these two Web sites quickly became must-reads for leaders of ground troops across Iraq. They were considered among the most important repositories of practical advice for how to lead troops in Iraq.

In The Starfish and the Spider (Portfolio Hardcover, October, 2006), Ori Brafman and Rod Beckstrom show why businesses need to foster and strengthen their own decentralized systems. Decentralized organizations and systems, argue the two Silicon Valley entrepreneurs, are inherently better at getting things done. In their new book, they draw on examples as diverse as the Apache's ability to avoid defeat by the Spanish for nearly 100 years and Napster and others that challenged the music recording industry to demonstrate how large centralized organizations are often overtaken by decentralized networks.

EMBRACE THE STARFISH.

The book's central metaphor recognizes that if you cut the leg off of a spider, you have at best a seven-legged (crippled) spider. But if you cut off the leg of a starfish, the starfish will grow a new leg (and with some rare species, the severed leg will grow into a whole new starfish). Traditional centralized organizations are the spiders. Decentralized organizations, like the starfish, are not easy to destroy. Attack them in one place, and they pop up again some place else. Just ask the recording industry, which has yet to put a lid on illegal music-sharing and probably never will, the authors say.

So what's the advice for the small-business leader? Embrace the era of the starfish—it's probably here to stay. Ask yourself whether you're building an organization of traditional "good soldiers" who wait for your next order or a company populated with "company commanders" who understand their mission but who are going to use their men on the ground to advance the cause while at the same time supporting their colleagues in the next trench.

Recognize that in today's fast-changing and competitive environment, it's the folks on the ground who have the best real-time information on how the battle is shaping up. Build an environment that respects their opinion, which seeks to make sure they understand the mission, and simultaneously empowers them to take the fight to the enemy in a way that optimizes their chances of success in whatever conditions they might find themselves.

McFarland, a two-time technology CEO, is the founder of McFarland Strategy Partners in Sandy, Utah. His clients include House of Blues, Vans, and other entrepreneurial companies. His upcoming book is Breakthrough: Secrets of America's Best Growth Companies (Random House/Crown).