October 6, 2006

News & Opinion: The Starfish and the Spider by Ori Brafman and Rod Beckstrom

By: 800-CEO-READ @ 4:46 PM – Filed under: Management & Workplace Culture


To introduce you to The Starfish and the Spider, here's a quip from inBubbleGuy:

Most organizations rely on a hierarchical chain-of-command structure. These companies are "spiders." On the other hand you have businesses like Wikipedia and Craigslist that don't rely on any central command or top-down strategy, yet continue to thrive without formal leadership. These are "starfish" organizations that are generally made up of smaller units capable of growing independently of each other. Craigslist Boseman Montana might flop, but Craigslist Milwaukee might grow beyond expectation. It's a decentralized organization that doesn't rely on some board of directors sitting in New York to control what happens on a daily basis.

Read on to learn a bit more about starfish vs. spider organizations.

9. Are working groups funded by the organization,or are they self-funding?

Because they are autonomous, the units of a decentralized organization are almost always self-funding. In open organizations, there is often no central well of money. Individual units might receive funding from outside sources, but they are largely responsible for acquiring and managing those funds.

Things are different on the centralized end of the spectrum. While some departments produce profits, others traditionally incur costs. Headquarters redistributes revenues, ensuring that each department is adequately funded. Without central funding, departments cannot survive. If MGM, for example, decided to cut its entire marketing budget, the department would quickly die.

10. Do working groups communicate directly or through intermediaries?

Typically, important information in centralized organizations is processed through headquarters. In the 1935 hurricane, for example, Sheeran had to communicate his concerns to the folks in Jacksonville, who then made the decision about whether or not to contact the train operators. Likewise, in a typical firm the marketing department might conduct a study on the sales of a given product, then communicate the information to the companys executives, who would then decide how to respond to the market demands and instruct the factory to increase or decrease production.

The Soviet government took this concept to an extreme. If a resident of Urengoy made a phone call to a friend in Tazovskiy, a hundred miles to the north, the call would be routed through Moscow, more than a thousand miles to the east. All phone calls were routed through Moscow. Why? The Kremlin wanted to keep tabs on what you were talking aboutwhether plotting to overthrow the government or locating spare parts for your tractor. The Soviets werent the first, or the last, to keep central control of communication lines. Even the Roman empire, though spread around the world, maintained a highly centralized transportation system, giving rise to the expression All roads lead to Rome.

In open systems, on the other hand, communication occurs directly between members. Whether youre an Apache or an eMule user, you can communicate with other members directly. No roads lead to Rome because there isnt a Rome; you couldnt route your phone calls through Moscow even if you wanted to.

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This excerpt comes from The Starfish and the Spiderby Ori Brafman and Rod Beckstrom, Portfolio, October 2006.