Corporations and even political parties have re-discovered the benefits of letting people choose how to contribute
A few years ago, my colleagues Oliver Alexy, Markus Reitzig and I became intrigued by new forms of organizing like Wikipedia and Linux. These involve thousands of voluntary contributors from around the world, often working without direct communication, producing a result that matches or exceeds the quality of products from traditional corporations like the Encyclopedia Britannica or Windows, respectively. How do they do it?
Our research led us to confront some of the most fundamental issues in organization theory, including what an organization really is. All organizations, from an ant colony to an IBM must have solutions to four universal problems in order to exist. These are: Dividing the goals of the organization into tasks; allocating these tasks to individuals; motivating these individuals and coordinating with them. The nature of the solutions to these universal problems, however, varies enormously across organizations. In the ant colony, natural selection writes them into genetic material, which produces inter-locking patterns of behavior. In IBM, senior managers exercise authority through a hierarchy to get large-scale collaboration.
Examples like Wikipedia and Linux point to the enormous variety and innovation that can exist even within human organizations. In particular, they diverge from traditional corporate hierarchies, most sharply in their reliance on task allocation through self-selection. In these organizations, no boss decides what employees should do – rather individuals choose when and how to contribute. They are motivated to do so because of intrinsic motivation, which also means there is less need for monetary incentives and monitoring to prevent shirking. Since by and large individuals enjoy the activities they excel at, staffing based on self-selection means that training becomes less necessary as well. Further, mutual suspicions of free riding or incompetence may also be less likely to arise because it is visible to all that others are also contributing through self-selection. The principle of self-selection into tasks thus economizes significantly on the costs of management.
Wikipedia and open source software projects like Linux are not alone in discovering these ideas of “frugal organizing”. Organizations as diverse as W.L. Gore and Valve (the maker of video games) have been successfully exploring the power of self-selection based task allocation. Most recently, the astounding electoral achievement of the Aam Admi Party in India pointed to an interesting example outside the business world. As I researched the story behind their success, I learnt that the AAP was using the same sort of organizational techniques that have made Wikipedia and Linux successful – the creation of a system that attracts valuable but voluntary (i.e. free to the organization) contributions from a large number of people distributed in different locations, of the right kind and at the right time required. The critical point here is the variety of ways in which volunteers could choose to contribute, irrespective of their financial strength, skills, free time and even location. A clearly stated inspiring idea, combined with a smartly designed structure that allows volunteers to choose from a menu of ways in which to contribute, led to an extremely effective and cheap campaign.
What the AAP seems to have clearly understood is that when people choose how to contribute to an organization, then many of the traditional costs of organizing – selecting, monitoring, motivating, rewarding – disappear. But such systems cannot be counted on to arise spontaneously; a lot of thought has to go into the design of a structure that allows and attracts such contributions. One of my senior colleagues whose work I admire enormously is Prof. Carliss Baldwin (HBS), and along with her co-authors, she has coined a beautifully apt phrase - “architectures of participation” to describe such structures. Leaders in organizations based on the self-selection principle should probably be more architect than manager.