Liquid Organization Model
= a prosal for the Digital Freedom Challenge
By Stelio Verzera:
"Liquefying an organization means disrupting the industrial-age driven assumptions on which rigid structures are designed and move on to make it adaptive, dynamic and anti-fragile. Based on lean management and open collaboration principles, the liquid organization model is flat, meritocratic and value-driven, enabling stigmergic behaviour and "organic" effectiveness." (http://www.mixprize.org/hack/liquid-organizations-realizing-next-evolutionary-stage-anti-fragility)
By Stelio Verzera:
"The platform for the open-governance of a liquid organization is composed of 4 pillars, as follows.
1. Collaborative working board.
The entire organisation shares a common working board. It is a kanban board, so the work in progress is limited (at multiple levels if needed), there is no assignment of activities but a "pull" mechanism by people that decide to start what has been collectively approved as "to be started", and then collectively prioritized.
Anybody can propose a new activity for it to be lazy-majority voted for acceptance.
Who starts an activity is the owner of it, meaning she is the "facilitator" and "coordinator" for that activity. Anybody can join the activity at any time, freely. When completed, the activities are collectively approved by lazy-majority voting.
2. Credits accounting system
Each governance activity has a value in credits estimated by all the participants to that activity, averaged by the system. These estimates can be changed in any moment, until the activity is completed.
After the activity's been completed and accepted, its weight in credits is distributed to all the participants to that activity. This happens by a retrospective shares evaluation executed by each participant of how much value (and not time or effort) each person has brought into the final result. The system averages the shares evaluation for each participant and distributes the activity credits in that proportion to the participants. The credits earned with this mechanism are directly converted into money compensation. The system then returns to the whole organizations two transparent values: the final averaged shares percentage of that activity for that participant, and the distance between this value and the percentage that participant has given for herself as self-evaluation.
In this way it is always visible how much a person over-estimates or under-estimates herself. An oscillatory situation of over-estimation and under-estimation is physiologic, while a constant over or under-estimation is a pathologic situation that becomes immediately visible for treatment.
3. Decision making support
Operational decision on the collaborative board single activities are taken by the company members by lazy-majority voting. In other words the decision is taken counting the votes of the members that have voted within a pre-defined timebox, which is usually between 2 and 5 days.
For all the other decisions the platform features a toolbox of decision making processes, ranging from a very simple dot-voting tool, to a multi-phase investigation, envisioning and selection process lasting up to some weeks per single decision.
Deciding quickly (and iterating over that decision) is considered a guiding principle for decision making, thus the decision is launched with the quickest tool in the toolbox that is considered suitable for that specific decision. If the result is not considered good enough (usually after actually testing it on the field) a deeper and slower decision making tool is adopted.
Lazy majority is used in all kind of decisions, reputation dynamics hold people to take part in decisions for which they would be considered strongly inadequate, and the pragmatic culture of co-creation and short feedback loop testing, moves the whole organisation as a single thinking brain.
Moreover, when some of the "dimensions" of the decision grow, and the decision is considered "important" (there is actually no need for up front "strategic" or "tactical" classification of decisions any more, because there is no "company level" or function to address them to accordingly) voting is executed not democratically but meritocratically. This means that the weight of each participant's vote is different and defined by the value she has created within the organization open-governance up to that moment, measured in credits earned by governance activities. In this way strategy is co-created involving (and engaging) all the useful and willing people, and defined by a purely meritocratic system.
4. Reputation tracing
An open-governance specific reputation tracing system is key to leverage contribution, transparency and value generation dynamics in a stigmergic system. It shows the trace of healthy behaviours, and let best practices and high level skills emerge. Of course it also gives visibility to "pathologies", allowing the organization to face them as early as possible.
This part of the platform enables any existing or entering person to see and understand all the existing population. Each person can expose her skills and former collaborators can validate them. The participation in the open governance activities and the value created is visible from more than one point of view and with more than one metric. Relationships between different people within the organization are also visible, such as having taken part to the same projects and/or to the same governance activities.
It is therefore easy to start understanding "who" is anybody within the organization, in any given moment in time. And, as a consequence, it is also easy to engage the "right" people letting them know about opportunities or threats at any scale and asking for their support in different ways.
- Transparency triggers reputation guided behaviours, helps defining a culture of fairness, enables visual control, allows stigmergic behaviour to take place on the basis of silent best practices continuous evolution.
- High level results, after being approved by peers, must be visible and able to emerge easily, giving people higher earnings and more decisional power proportionally to the value they are creating within the organization.
- Waste elimination can be radically embraced, removing everything that is not contributing to the creation of value towards the company's goals, that of course include the company's health itself. Job interviews, for example, are not a meaningful way of using time. The most efficent (and effective) way to verify anybody's fit within an organization, is letting them immediately in and let them work just like all the "regular members" but in a "safe zone" and see if they fit-in. We call this zone Contributorship.
- Job titles and pre-defined organizational functions are not needed for the creation of value, what is needed are well aligned people with high level competences, motivated in what they do by a sense of belonging and directed by a common work culture.
- Concentrated decisional power is just one specific "tool" for decision making, not the only one nor the best one for any situation. The organization must have a toolbox of decision-making processes, including more than one technique adopting distributed decisional power.
- Agile iterative experimentation and execution are crucial to complexity management: the speed of learning is a very important measure of the organisation's ability to evolve quickly and healthy.
- Co-creation is a fundamental means of information, creativity, intelligence and criticism utilization towards the common goals of the organization.
- People want to be engaged in the creation of value if fear is removed and the results are fairly rewarded: humans want to contribute by their own nature.
- A system that makes potential problems or any negative tension very early visible is a system that will be able to manage them with the least waste of energy, when not to exploit them for evolution before they become a severe problem." (http://www.mixprize.org/hack/liquid-organizations-realizing-next-evolutionary-stage-anti-fragility)