In stark contrast to traditional command-and-control hierarchies where a few people exercise top-down power over the majority, decentralized autonomous organizations (DAOs) are emerging as new organizational structures that can radically reshape organizational dynamics. Put simply, a DAO is a blockchain-enabled organization with shared community, purpose and capital. While there are many differences between DAOs and legacy organizations, here we focus on one core aspect: leadership.
Claims about DAO leadership abound: they are leaderless, there are no bosses, software rules aka ‘code is law’. Even though these claims may be accurate if you refer to governance, whereby any member can put forth proposals that other members vote for or against in a democratic process, the ground starts shaking if we talk about operations. How can DAOs coordinate without leadership? Who gets responsibility to execute proposals? How to distribute tasks to make efficient use of skills? If anyone can pick up anything, who can solve conflicts that possibly arise? Ultimately, what is leadership in DAOs? These are some of the questions that so-called leaderless organizations need answering.
The central argument against the concept of leaderlessness came in the 70’s from an essay by Jo Freeman: ‘there is no such thing as a structureless group’. To bring an idea to reality any group, whatever the idea, needs structure. This ‘may be flexible; it may vary over time; it may evenly or unevenly distribute tasks, power and resources over the members of the group’. In his talk ‘The case for hierarchy in DAOs’ at ETH Denver, former SushiSwap CTO Joseph Delong echoed this idea: ‘structurelessness isn’t really a viable methodology’. The underlying assumption is that leaderless organizations don’t exist or hardly survive. In fact, the solution for DAOs may be more structure, not less. DAOs need to deliberately create organizational structures to optimize for desired outcomes: autonomy, agency, accountability, ownership, stewardship, cohesion, collaboration, recognition, wellbeing, you have it. Preventing the dysfunctional behaviors typical of legacy organizations means making explicit choices over organizational structure and dynamics. After all, the structure you have, the culture you get. Nothing must be left to chance.
For many inhabitants of web3 hierarchy is an outrageous term. Reminiscent of how it motivates individuals to climb up the ranks, lead members at different ranks to have opposing interests and perspectives, and ultimately lead to conflict, DAOers oppose the idea of hierarchy. In organizational science there is a line of thought, the so-called functional perspective, asserting that by giving a structure to guide roles and contributions, hierarchy may benefit team effectiveness as it facilitates and coordinates member interactions. However, pulling data from over 14,000 teams in a meta-analysis, Greer et al. (2018) found little support for this claim: hierarchy is a double edge sword, it harms coordination more than it helps it. Hierarchy tends to provoke contests and conflicts over the rank order in a team. These conflicts can harm team outcomes, distracting members from task accomplishment and harming interpersonal relationships.
Hence, paradoxically, DAOs promise to create a new work culture in discontinuity with traditional organizations, where one element of disruption is hierarchy. Yet, structureless organizations seem to be a short-sighted mirage. So, how to reconcile these seemingly opposing forces?
At talentDAO we aim to resolve this conflict to empower the DAO ecosystem. We are a community of organizational scientists, strategists, and researchers with the shared mission to unlock human potential in the decentralized, digital economy. We set out to study leadership and organization design in the decentralized world of work. Our goal is to provide DAOs with evidence-based practices to create new organizational cultures. We anticipate there will not be a single recipe that works across the board, rather a blueprint, a process, a composable set of practices for DAOs to design an organizational structure to optimize for desired outcomes at the individual, team, and organizational levels. Want to foster performance? Do this. Want to strengthen relationships? Do that. Outcomes first, drivers second, and contextual judgment in between; all based on evidence and logic rather than hunches. This is our philosophy.
Our research proposition
As the first step of our research we will conduct rapid reviews of the available leadership literature (secondary research). A rapid review aims to answer clearly defined questions with the best available evidence defined through explicit criteria. These include:
- Scholarly journals, peer-reviewed
- Available through ABI/INFORM Global, Business Source Premier, PsycINFO databases
- Limited to meta-analyses and systematic reviews
- Published in the past 25 years
- Articles published in English
Meta-analyses and systematic reviews synthesize the whole body of research on a topic up to a specific date. Starting from this type of publication ensures we leverage available valid knowledge on the topic of leadership to inform (primary) quali-quantitative field research within DAOs. The questions we aim to answer are the following:
- What are the most relevant theories about leadership emergence/effectiveness?
- What do we know about their predictive validity over individual, team, organizational outcomes?
- How can we measure different leadership dimensions/constructs?
- How do leadership principles, practices and behaviors apply in the context of decentralized work?
The second step of the research will investigate leadership and organizational structure in DAOs using mixed methods research designs (quali-quantitative). The aim is to understand different DAOs structures, uncover emergent leadership practices, and identify which leadership principles, practices, and behavior emerged through the rapid review apply in the context of decentralized work. The research will involve both interviews with people holding leadership roles in DAOs, surveys with targeted organizations, and analysis of public organizational handbooks, datasets, and thought leadership coming from the ecosystem.
Ultimately, the overall goal of talentDAO’s line of research on decentralized leadership is to give DAOs the means to build effective collaborative communities that can bring about positive social change. We will be sharing summaries of our research findings as we go, in the meantime, looking forward to your questions and comments!
Freeman, J. (1972). The tyranny of structurelessness. Berkeley Journal of Sociology, 151-164.
Greer, L. L., de Jong, B. A., Schouten, M. E., & Dannals, J. E. (2018). Why and when hierarchy impacts team effectiveness: A meta-analytic integration. Journal of Applied Psychology, 103(6), 591.
About us: we are Pietro Marenco and Lisa Wocken. Lisa holds a PhD in organizational leadership, is a founding member of talentDAO and an educator in the DAO ecosystem. She has 15 years experience in leadership, specialized in crafting leader development pathways for mid-large organizations, and is an experienced qualitative researcher. Pietro is an organizational psychologist, member of talentDAO and former Deloitte consultant, with 7 years experience conducting rapid reviews in the field of leadership, management, and organization and translating research findings for practitioners, gained as Co-Founder and Head of Content of the no-profit ScienceForWork.
About talentDAO: talentDAO is a community of organizational scientists, strategists, and researchers with the shared mission to unlock human potential in the decentralized, digital economy. We conduct scientific research that helps DAOs thrive while educating the public on the greater decency and agency offered from the decentralized future of work.