Review: The Starfish and the Spider

Ori Brafman and Rod Beckstrom are entrepreneurs. In The Starfish and the Spider they express their fascination of decentralized organizations, and their impact on the business world. Based on numerous examples, ranging from Alcoholics Anonymous to Skype and Wikipedia, they present to us a model of decentralized organization and the new business rules it implies.

A decentralized organization, compared to Starfish, can be defined by several characteristics, such as:

1. No specific person in charge and no headquarters, which imply that it’s not easy to destroy it by “thumping it on the head”
2. An amorphous division of roles, so that the organization would not be affected by losing any of its units
3. Distribution of knowledge and power
4. Flexibility
5. Self-funding of units
6. Direct communication between the working groups

On top of the above characteristics, the authors define five building blocks of starfish organizations:

1. Circles: Decentralized organizations consist of autonomous and independent circles. When using Internet for communication, the circles become virtual, which are very easy to form and join. However, virtual circles also lack bonding between its members, and may be subject to free-riding or destructive behavior. Circles lack hierarchy or structure, but instead they depend on norms for realizing their objectives. These norms are self-enforced, members enforce them with one another. As a result, there is a sense of trust among the community.

2. The Catalyst: According to the authors, every open organization starts with a catalyst – a person who initiates a circle and then moves into the background, giving away control to the members. Catalysts let go of the leadership role, and transfer it to the circle.

3. Ideology: Decentralized organizations are built on a foundation of shared ideology.

4. The Preexisting Network: Very often, starfish organizations are started from the basis of a preexisting, decentralized platform. Currently, the Internet has become such platform. Because there are almost no entrance barriers for the Internet, it is very easy to launch web-based decentralized organizations in this environment.

5. The Champion: The champion represents another key role in starfish organizations, next to the catalyst. While catalysts envision the organization and inspire the members, champions actually implement the ideas and drive execution. Champions are key in gaining a critical mass of any movement, as they engage new members and “sell” the catalysts’ vision.

Following the description of leaderless organizations, the authors define several rules that apply to the business world affected by decentralization:

1. Decentralized organizations tend to become more open and decentralized when attacked, while centralized organizations react with greater centralization to an attack.
2. Centralized and decentralized organizations are not easy to distinguish.
3. The knowledge and intelligence are spread throughout the system of starfish organizations.
4. Open systems can easily mutate.
5. The decentralized organization advance and grow unnoticed.
6. As industries become decentralized, overall profits decrease.
7. People are eager to contribute when they are in an open system.

Other topics covered in the book include a characteristic of catalysts, strategies to combat starfish organizations, and a hybrid business model (introducing decentralized elements into a centralized organization).

Overall, the book is quite an easy read thanks to many stories and examples. The ideas presented in the book are novel and may stimulate a rethinking of the rigid business models. However, it’s only a popular book – there is no evidence supporting the presented models and principles, and everything is based on observation and conclusion from several examples.