Why Web3 Team Governance Is Literal Anarchy — And What To Do For Performant Web3 Organizational Development

TLDR: The yin and yang combination of ‘Insurance Policies by Broad Community Consensus’ with ‘Decisions by Narrow Focused Meritocratic Consent’.

Right off the bat let’s clear up any misgivings about Anarchy…

‘Anarchy’ does not mean ‘chaos’ —?contrary to what Hollywood wants us to believe.

Anarchy actually means ‘no rulers’.

Isn’t that the idea of decentralized governance?!

That’s not to say anarchy has no rules, though. It does have rules. Just like web3 governance has rules. Where those rules are curated and consented by those effected.

And yet…

Those in leadership roles of web3 groups (‘communities’ or ‘teams’) rarely know how to confidently distribute decision making power in ways that avoid the risk of Cowboy Community Contributors (CCC’s, you heard it here first) from messing things up…

The worst of it is when web3 teams, communities, groups, circles, or DAO’s suffer the Prisoners Guard dilemma, where different types of role are shunned or even treated punitively:

• Communities turn against the idea of a ‘Strategy Guild’ because they don’t want ‘to be told what to do’ by folks claiming to ‘own strategy’. Relatable!

• Contracted full-timers claim to want decentralization in the community yet somehow steer almost all decisions to their liking none-the-less. I certainly see why they would!

• Contributors claim ‘autonomy’ to the extent they couldn’t care less what other contributors are aiming to do, with almost chronic lack of accountability and transparency. Hmmph!

So how can it be done any better than today’s higgledy piggledy web3 governance status quo?

The Peanut & Jelly Solution To Web3 Governance

Astonishingly enough, there are 2 insights that both come from the 1970s that provide a kind of Yin/Yang (or Peanut & Jelly) combo towards solving the conundrum of decentralized governance.

Stick them together and the results are sensational!

First — the principle of Insured Authorization

This comes from Bill Oncken’s 1970’s business management training called ‘Managing Management Time’.

Adopted by top business consultant Ken Blanchard (in his fun business fiction series about Monkey Management), tasks are seen as needy little monkey’s, whose welfare is placed under the care of assigned staff.

Senior Managers were taught to use 2 types of ‘insurance policy’ to ensure the welfare of project work:

• Policy 1: Propose, then Act (that is, check with the boss first, then act on approval) —?very centralized and traditional.

• Policy 2: Act, then Advise (act with autonomy once trust is established) —?towards distributed decision making with keen risk mitigation.

It shouldn’t be difficult to see how that can readily apply to the method of group consensus by web3 teams to manage both policy types.

That is, individuals should check with the relevant group (Circle, Guild, or whatever you prefer to call it) until trust is earned.

But wait, there’s more…

Second — a system of consent known as Sociocracy

Remarkably also from the 1970s, Sociocracy provides a framework adopted in part by various web3 communities to date (with a highly opinionated version of it called Holacracy geared for modern business application).

Sociocracy focuses on inclusive contribution from those interested, with a commitment to non-violent communication (which essentially means not imposing ones will or views onto others but certainly has more nuance to it than just that).

The real magic of Sociocracy is that it makes a distinction on how to achieve agreements by distinguishing consensus (everyone agrees) from consent (no one disagrees).

That’s not just semantics!

• Consensus (‘everyone agrees’) is the default that leads to willful imposition, sometimes by the HIPPO (highest paid person in the room) or hierarchy (so web2).

• Consent (‘no one disagrees’) leads to genuine decentralized decision making autonomy and ownership — under the checks and balances of the groups collective intelligence.

This has profound practical implications and leads to an entirely different experience...

…Yet it remains very much misunderstood by supposed advocates of decentralized governance today because they have lacked the secret sauce.

Drum roll…

The Secret Sauce

The key to performant web3 governance is combining Insurance Policies by Consensus with Decisions by Meritocratic Consent.

Breaking that down…

A ‘policy’ captures details on ‘how we do things around here’ which can be curated by the collective intelligence of a dedicated community, with inputs from senior stakeholders (those who either fund and/or inspire the groups direction).

• If policies are too loose, chaos ensues, and dictatorial decree becomes habitually imposed. Welcome to centralized governance all over again.
• If policies are too detailed, with exacting process check-lists on everything to be done, creativity is stifled and motivation declines (therefore engagement dwindles to its bare minimum).

Through the collective intelligence of a stakeholder group working together on policies to provide guidance and protection for positive outcomes, everyone can be included, and the organization as a whole becomes protected from those meddling CCC’s as mentioned earlier: Cowboy Community Contributors.

From there, each individual contributor can propose specific initiatives, projects or campaigns.

Providing the proposal adheres to policy, proposals are rightfully considered by the community for consent.

Lack of consent happens if there is a perceived potential risk or cause for harm.

Without me regurgitating Sociocracy, check out Sociocracy 4 All for more on the process and relevance of consent to authentic decentralized governance both here and here .

Renewed Web3 Governance In Essence

1. Insurance Policies by Consensus —?curate general broad direction and risk mitigation as a community at large, wide-open, transparent, inclusive, consultative, for wide-open collective intelligence.

1. Decisions by Meritocratic Consent — In small meritocratic task force groups, contributors present specific project proposals and work together to uncover risks such as assumptions or gaps in knowledge or suboptimal process or lack of specific outcomes, etc. until consent is reached and the project can proceed.

Appointments can be made via election or by senior stakeholder appointment.

It’s amazing how relevant the pre-computer-age techniques of governance from the 1970s are for today’s maturation phase of web3 governance.

First was token-weight plutocracy —?governance by Whale.

Second was general disarray and squabbling with cliques ‘owning’ areas of work... because… ‘autonomy’ was assumed to signify ‘decentralization’.

Now comes the yin and yang combination of Insurance Policies by Consensus with Decisions by Meritocratic Consent.

For more, including workshops or advisory, contact me or visit www.cyclicmedia.com .

And see my other articles shared here on LinkedIn.