How are DAOs the businesses’ ideal model?
The world is applying a new model to businesses, and it’s called Decentralised Autonomous Organization (DAO). Some of the noticeable industries that have emerged can be named are blockchain, sports, politics, and entertainment industries. In general understanding, DAO unites people with common goals and provides them access to build an idea system that serves the community’s purpose which is whatever those people want. It may sound like a traditional organization, but DAO, however, gives each of the member’s ownership of their own. Opinions expressed by Entrepreneur contributors belong to no others but their own. This trait potentially disrupts the “old” concept of business. Due to the new structure that recognizes the work of individuals in a company, eventually, DAO turns the workplace into a more transparent environment.
What are DAOs?
Decentralized autonomous organizations, or DAOs, manage businesses or projects. Instead of one person being in charge and making all choices, the DAO community does so. This enables direct participation from all stakeholders and establishes a dispersed and transparent government. In the United States, Wyoming, Vermont, and Tennessee have already passed legislation recognizing DAOs as legal entities.
DAO shifts internal leadership
Managers are appointed in a typical corporate organization to lead teams and manage people as their title indicates. There is less human management in the DAO framework. People must inform, persuade, and inspire others because they can no longer command others by force. By doing so, it is made sure that everyone has the information they need to make wise choices and it helps to rally support for a particular proposition that is up for a vote. As we see in other democratically governed organizations, this means that strong leadership qualities will be essential for gaining support and exerting influence in the community.
DAO considers individuals’ contributions Things are often more transparent under the DAO structure, which allows for the recognition of each individual’s work. Since many of their efforts go unappreciated in the typical organizational system, people who do exceptionally well yet are humble and quiet frequently go unrecognized. In a DAO organization, everything is transparent, so people don’t go unnoticed and receive recognition for their value to the team. Imagine a workplace where workers are a community of people, where people are more self-directed, and where their contributions are freely acknowledged. A happier and more effective staff is the end outcome. Employees will deliver the highest caliber of work if they are invested in the company’s success. DAOs help to foster this transparent and equitable work environment.
DAO provides fair and transparent working processes
DAOs decentralize and democratize decision-making by allowing members to vote on changes that are made. As a result, choices become more transparent, everyone has greater visibility, and no one feels as though they are in the dark about why changes are being made. Another significant conclusion is that a productive environment is fostered by a fair and democratic voting process. When executives make decisions without taking employee feedback into account, especially when such decisions are seen as being unjust, it can lead to resentment and hostility. Businesses can create more hospitable and sustainable environments for everyone by giving members greater input in the change. Because there is no longer a single point of failure in the form of a centralized authority figure, the decentralization of the decision-making process can also be seen as being more secure. An individual leaving the firm won’t have the same profound impact as a CEO leaving a traditional organization since there is no longer a high value placed on a single person.
However, DAO takes longer for decisions.
Implementing a decentralized governing structure means you are giving many people a voice in the company’s future, all of whom have different perspectives. Ensuring things move forward can feel like herding cats and less efficient than a centralized authority structure. Efficiency does come with costs. Leaders of companies don’t always make the right decisions. As mentioned above, when a leader leaves a position the company is heavily impacted, whereas the DAO structure allows for more resilience and flexibility.
