DAOs — If You Build It They Will Come: But Will They Stay?
Attracting and retaining the best people for the success of your DAO
It Looks Good On Paper
The concept of a DAO is ripe with promise — a decentralized, autonomous organization. The decentralized aspect suggests a novel, inspiring structure for those wary of heavy hierarchies. The autonomous bit promises to abstract a large amount of the rote governance into code, freeing up the participants to innovate, build, and “do.” The organization piece suggests a cause, and a collective organized in some manner and made up of multiple individuals. An equal opportunity, action-based, and mission driven group? Sounds interesting!
In reality, how most DAOs are established currently is somewhat lacking, with an over-reliance on the technical (code based) side of the DAO makeup. As it is a new concept with emerging technology there is a first-mover opportunity to influence how DAOs are utilized and what they become. By establishing some processes or “ways of working” that are sensible and successful, these processes will be shamelessly stolen and propagated by other DAOs (a good thing!) Much like forks of influential cryptocurrency projects, the establishment of a practice that achieves a complementary blending between the code and the human behavior needed for a DAO’s success will lend itself to replication.
For those creators with a purpose beyond spinning up a DAO as a test of its underlying technology, there remains a large gap of undefined but necessary behavior that falls completely outside of what the tech can or will ever provide. For example, one of the most important things a DAO can do to establish and maintain momentum is to attract and retain valuable contributing talent. Unsurprisingly, DAO creators are unlikely to have a mastery of the organizational principles needed to attract and keep contributors engaged. This means that even the most interesting and well-meaning DAOs may miss out on the contributions of the best-fit people by failing to provide the necessary structures to support this much needed cohort. These structures are well researched by psychologists in organizations, and can be adapted for the new world of DAOs.
It is the goal of this essay to introduce DAO creators to organizational best practices for creating a place where people feel supported and are therefore inspired to do their best. Understanding these practices will aid creators in designing the systems needed to recruit and retain a devoted collective of top talent working together towards the goals of their DAO.
A Place is Not Just A Place
Before jumping into organizational theory, it’s worth stepping back and thinking about the big picture of what a DAO actually is — a place to do stuff. Before considering the technology and the implied structures, imagine the simple concept of “a place.” A place (a bar, for example) is far more than its simple function (a spot to buy and consume drinks); it has a vibe, an aesthetic, a culture. It has a clientele who may be of a certain subculture (punks, businessmen), ethnicity (Hispanic), or class (working class) and who because of that makeup contribute to what makes that place “that place”. It’s the commingling of the vibe and the participants that attracts some and repels others. In other words, a bar is so much more than just a bar.
Once that vibe is established, it may be difficult to shift it without an influx of self-selecting participants. We’ve all heard about gentrification killing the appeal of the cool spots by taking them over. As a DAO creator, it’s worth thinking about how to attract and retain the people that maintain or enhance the established culture or who help the organization to evolve the culture you aspire it to be.
The same can be said of a workplace. There is the base function the organization provides, and there are the people that merge with the function to make up the culture. From the perspective of the employee this culture may be attractive or repulsive, contributing to their level of involvement and willingness to remain, among other behaviors.
This is no different in a virtual place, like a DAO, where various people voluntarily gather across a number of platforms (forum, messaging, voting/proposal) in order to contribute to a common goal in their own nuanced ways, within the cultural parameters produced by the combination of the allowed behaviors (structure) and the participants.
One mistake that DAO creators appear to make today is expecting that the governance technology is enough to provide the framework for achieving specific DAO goals. In a previous article “The Human Side of DAOs” I described two essential aspects that the software cannot automate away (spoiler: the culture, and the structure.) In other words, currently there is an irrational equation being employed that expects Technology + Willingness to contribute to same goal = recipe for DAO success. As such there is a launch, a number of proposals that loosely connect with some overarching idea, and then a lot of inefficient discussion, confusion, and frustration resulting in some people leaving and others staying, factions forming and unelected leaders emerging based on charisma and other factors. The culture is then formed mostly outside the hands of the creators and the mission may be easily lost in the noise. It doesn’t have to be that way.
In order to answer the obvious questions this raises around how to provide a DAO with a basic culture and the social framework to succeed, we can look at what is known in established organizations. Specifically, there is a huge body of organizational research that provides insight into solutions to some of the fundamental challenges a DAO (like any organization) encounters, including how to attract and retain the right people to contribute to the organizational goals, and how to maintain the culture even as members come and go.
Culture Abhors A Void
In a DAO, collective participation and code based governance are more abstract than in a traditional organization because there is often no real owner or board-of-directors like in top-down hierarchical organizations. Because of this, the systems, rules, norms, and other cultural aspects must act as a proxy for the voice and direction that these leaders commonly provide. As social and clan-oriented creatures, we can’t help but look for leaders, providing them with soft power such as persuasive weighting for how we vote. This soft power will be tempered by the organizational culture. A weak culture will result in higher soft power distribution to fill the directive void. This makes for a particularly challenging issue for those trying to establish their DAO, especially if the community gravitates to granting power to the wrong people. The lack of focus on establishing the necessary cultural building blocks to DAO recruits may be overlooked by both technologists focused on code and function and collectivists interested in scaling their project from the coffee shop meetup out to the larger world. The DAO technologist wants to abstract the governance into code to free up the collectivist. The collectivist wants to abstract their ideas into a codified system in order to gather and guide willing participants to a specific set of goals.
The blind spot for both lies in how to procure and maintain high quality contribution and interest from the right people. All the tech and ideas in the world will fail fabulously If only the wrong people show up.
Mark Twain (may have) famously stated that “History does not repeat itself, but it often rhymes”, his point being that you can often use the fuzzy parallels from similar prior instances to make informed decisions in a new situation. A DAO allows for a new way of organizing, but that doesn’t mean everything about DAO participants is new and the past behavior of humanity is suddenly obsolete. There is a huge body of research that specifically investigates recruitment, retention, productivity, and supportive cultures in traditional organizations. The key knowledge and models that organizational psychologists have developed can give great insight into the essentials of a prosocial and supportive DAO.
Specifically of interest is the research on support in the workplace. This is because organizational support is a perception based on a number of organization-controlled factors that result in clusters of important behaviors. In other words, there are known organizational actions that bolster feelings of employee support and the intensity of an employee’s perceived support results in the types of employee behaviors that meet the organization’s goals.
It’s reasonable to translate the known inputs to organizational support into the DAO context in order to understand what it takes to inspire feelings of support and satisfaction by high quality contributors which then translates to a number of helpful behaviors. By establishing a strong, supportive culture early in the life of a DAO one can attract the right people, maintain the overall goals of the DAO, and efficiently execute against those goals.
Reviewing A Model of Organizational Support
The basic model of organizational support is very straightforward. In a nutshell it translates to the following statement:
There are several classes of behavior an organization can engage in that make employees feel supported, and supported employees reciprocate this support through classes of pro-organizational actions.
In order to establish a strong understanding of the [organization input -> support strength -> employee output] model we are adapting, it’s critical to identify the base model and then discuss the analogues to the component inputs and outputs.
Inputs: While many organizational actions can contribute to employee well-being, three specific classes have been found to consistently strongly influence perceived support in organizations:
Realistic Job Preview
This is the understanding of what the job entails, including the expertise that will be needed, and the employee’s place in the organizational structure. Nobody appreciates a bait-and-switch, and making the decision to join an organization is based strongly on the employee’s expectations created during recruitment.
Tools to Succeed
The first factor (realistic job preview) translates to “tell me what is expected of me…” and the tools to succeed can be seen as a continuation of that statement “…and give me what I need to meet those expectations.” Tools can be in the form of training, actual physical tools, technology, mentorship or education. The point is that the organization makes these necessary pieces easily available.
Autonomy
Very few people enjoy unwarranted scrutiny, and plenty of research supports the positive outcomes that autonomy inspires. Allowing employees to go about their work as they see fit so long as the needed outcome is achieved is a huge contributing component to satisfaction. Autonomy relates to feelings of voice and control — of being heard and having agency. A lack of autonomy breeds unease and causes an employee to ask why they are not trusted, diminishing their sense of accomplishment and belonging and making them feel helpless when criticized or poorly reviewed.
We can merge these three contributions to employee feelings of support into a single statement: “Tell me what to do, give me the tools to do it, and then leave me to it.” The follow on to that statement is “This will make me feel like a supported and important contributing member of the organization.” However, if good feelings were the only outcome of the three inputs, it wouldn’t be particularly meaningful, but research shows there are a number of positive outcomes based on strong perceptions of workplace support. A few key outcomes are described below.
Outputs: While employees may reciprocate in many ways based on how they are treated at work, there are three classes of behavior that strongly correlate to feelings of support.
In-Role Behavior
Support inspires excellence in the behaviors expected of the employee. In-role behavior consists of those things to be done in the normal course of whatever the job holds. Think back to the contributing support factor of “tell me what to do” — this is the employee doing that set of the work, with high quality and completeness.
Extra-Role Behavior
Beyond the basic, expected tasks are a myriad of prosocial, positive behaviors a supported employee engages in such as helping others, covering for a co-worker in need, informing the organization about legal concerns, and after-hours research. None of these behaviors are required, but they make the organization a better and more successful place. There have been some theories that even though they are optional, extra-role behaviors are one of the major competitive advantages an organization has. Imagine the improved culture of a collection of helpful people who care about their organization versus a place where they merely do their minimum required work and then leave.
Retention
Unsurprisingly, feeling supported in an organization results in employees staying there longer and investing more of their time in the organizational goals. Few people are willing to work in a place they are not supported, and where they don’t feel they are trusted or their contributions valued.
Applying Organizational Support Theory to DAOs
Because a DAO, by design, lacks the traditional hierarchy of a physical organization, it must strongly reflect its support by proxy through the culture, structural configuration, and goals it maintains. Translating the three strong antecedent conditions discussed above that lead to feelings of support can be useful for DAO design and governance in order to inspire retention and superior performance by those the DAO needs most.
A realistic job preview is, at its core, a way of letting the employee gauge what to expect and if and how they can help. In a DAO, the comparable proxies would include a strong culture with public, defined processes, a well-defined mission and goals, transparency in how the DAO works (including current challenges) and plans or road maps. This allows the prospective participant to determine how much they care, how much they can help, and how to be successful. If they choose to join, this aspect of the satisfaction equation is the most important area of development needed to attract high value contributors. It provides specific, transparent information for how to be impactful. Without it, the potential recruit may not realize their opportunity for impact and move on instead to a DAO that can articulate the value proposition better.
· Clearly define your mission, be specific and transparent
· Establish public roadmaps and a communications channel for discussing the “whys”, the “hows”, and the “whens”
· Define processes that are transparent, fair, and consistent
The tools to succeed provide the employee with the necessary resources to be useful. In a DAO, this need can be met through a culture of teaching, patience, guidance, standardized onboarding, and mentorship opportunities. By taking the time to formally acclimate interested parties and incorporating them in simple but important work the DAO helps them to understand the contribution cycle. Beyond onboarding, friendly review, availability of help, and the ability for the individual to engage meaningfully with other experts can provide the means for convincing them that there is support when facing difficulties completing a task.
· Incorporate onboarding as part of the basic DAO process
· Formally reward mentorship, evangelism, and teaching
· Implement friendly review processes with opportunities for constructive feedback
· Update processes as needed, in a transparent and proactive manner
The final antecedent, autonomy, can be represented in a DAO by approaching interactions from a starting point of trust-first and by providing all members a sense of voice. Defaulting to trust suggests that an individual is assumed to be behaving honestly for the betterment of the collective, and their process of producing work does not initially need to be overly scrutinized. This isn’t to say that their work should be accepted without review or that to question them should be taken as an affront, but rather that the model, by design, approaches all interactions from the point of view that the contributor has the best intentions in their behavior. Voice is similar in that the opinions of the provider are received through a lens of positive attentiveness. The speaker is given the agency to speak as they believe is appropriate, and to make some decisions independent of the collective. Beware, however — autonomy is a powerful and often exploited gift.
· Design review processes to follow a trust-based model of inquiry
· When an action appears ambiguous, default to trust in the actor’s motives
· Build opportunities for voice into DAO processes beyond simple voting
· Before making a decision, consider whether proposed changes in a DAO will impact methods of showing trust and providing voice
· Incorporate transparency in all actions
· Embrace inquiry
Translating Organizational Outcomes Into A DAO
If the established model of organizational support holds in the virtual space of a DAO, we can expect particular types of outcome behaviors on the part of highly supported participants. The following describes potential behavioral mappings based on what is known from prior research projected onto the unknown space of DAOs.
In-Role behaviors — similar to a traditional organization, we can expect the supported DAO participant to provide a high quality of output in the tasks they take on. Unlike a traditional employment relationship, DAOs often function through a proposal system in which the participant proposes a task which may include some form of a wage and reputational payment for completing the task. Translating this through a lens of in-role behavior, we can expect the participant to propose a fair price and an appropriate reputational reward for the work they wish to perform. The work will likely be of high quality and delivered on time.
Extra-Role behaviors — A DAO, like an organization, can be so much more than a quid pro quo transactional system. It can be a vibrant, helpful community. It can be a place where people learn and share in the pursuit of a common set of goals. The supported participant may show their connection to the DAO by volunteering time to guide and teach, and to mentor and help new members acclimate. They may take the time to critique proposals or review pre-proposals to suggest improvements instead of merely using the voting system (choosing to vote yes or no) as a passive form of voice. These behaviors can be thought of as going above and beyond bare expectations of proposing, voting, and completing approved work. The supported DAO participant will be willing to put in the time to build, nurture and improve community, without expectation of an explicit reward.
Retention — As in a traditional organization, it is expected that the supported member of a DAO will stay active and participate in meaningful ways. Their intensity of commitment will be greater than others. It’s also reasonable that they will take a long term view of actions in the expectations that the DAO will survive, that they want to continue to be a part of it, and that they want it to succeed in the best ways possible. Their willingness to stay and participate combined with their connection to the goals and purposes of the DAO make them uniquely equipped to use their wise voice to help DAO members make high quality decisions in line with the goals and culture the DAO has established.
The “Supporting” Argument
For a DAO to be successful, it must be more than a technological transactional framework. It must appeal to a variety of people with various skills in order to thrive. The culture and the structure that are built up around these people must compel them to remain, to do amazing work, and to help the DAO reach its goals. Digging into what makes humans want to work, to help, and to stay connected in traditional organizations can give us an understanding of what principles and actions need to be applied to create a robust community devoted to nurturing the success of a given DAO. Organizational psychology has researched a model that shows the value of support in helping strengthen peoples’ commitment such that they produce exceptional organizational outcomes. By translating that model using the framework DAOs use today it is believed that there are specific, proactive ways a DAO can attract, inspire, support, and reap the benefits of high quality contributors.
The key is to establish appropriate supportive practices as a core part of the initial DAO launch, and to maintain those practices as a core part of the culture. These will serve to inform interested parties of their true likely fit and what they can expect in return for their contributions. This fundamental work is essential to the establishment of a strong, supportive culture that will complement the technological governance DAOs provide, making for a compelling invitation to those most strongly aligned with the goals and ethos of your DAO. Just like you must configure the code of your DAO, so must you configure your culture. Using organizational best practices identified and developed through years of research into how people work together in organizations, you can set up your DAO for the highest likelihood to succeed through the recruitment and retention of great and helpful talent.
Want to reach out? Have an opinion you’d like to discuss? Feel free to email me: ivanthinking@gmail.com
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