Governance, Decision-Making and Co-creation in participative organizations

We at CollectiveOne are developing a platform to “create and manage open projects: projects to which anyone can potentially contribute, and which are distributedly owned and controlled by their contributors”.

It sure sounds nice, but achieving that vision is very challenging. From the many problems that it posses, we have focused on exploring solutions to two different (big) ones:

  • Mapping value-flows: How to recognize the value added by the contributors to an open project and redistribute the value it, eventually, creates?
  • Coordinate: How to coordinate the evolution of the project among a set of contributors without creating a standard organizational structure?

In this post, I focus on some basics of the problem of coordination. We will keep a simplified and a quite naive perspective on the problem as a mean to identify the key concept of this post: that governance is not about voting, but about communication, and that changing current organizations requires technological tools that enable structured communication at scale.

Coordination is required when two or more persons want to combine their actions into a common outcome. This problem is, sometimes, referred to as “the governance problem”, “the collective decision-making problem” or “the co-creation problem”, but these are actually different things, as we will show below.

Let's start with a simple example of an organization. It should help us introduce a couple of ideas more clearly.

Drawing a mural together

Imagine that two or more persons (let’s call them “contributors”) decide that they want to organize themselves to draw a mural together. How can they do it?

We will follow a utilitarian perspective as a first approximation and define the problem we want to solve as follows:

Problem: how can a group of people participate in the process of moving brushes with paint over a big wall such that the result is a high-quality mural painting?

Solution: Hierarchy

There is actually one and only one organizational structure that works when two or more persons want to organize themselves to create a common outcome, and this is to create a hierarchy.

A hierarchy is necessary because the process of moving the brushes over the wall requires coordination and such coordination relies on an ideation process that needs to be common to (and thus above) all brushes.

Below is the difference between a non-coordinated (left) and a coordinated (right) mural painting. Independently of which one looks better, the left mural does not need a hierarchy of contributors, while I would argue, the right one does.

Left Photo by Paul Murphy on Unsplash, Right Photo by @nabobswims

The hierarchical structure of the organization is, thus, defined based on the following guidelines:

  • The higher in the hierarchy, the wider the scope* of the activity.
  • The higher in the hierarchy, the larger the focus on ideation rather than implementation.
  • The higher in the hierarchy, the fewer contributors are appointed to the activity.

* The scope of an activity is related to its reach both in terms of inputs and outputs. It can be very broad, as in “What do we want the observer to feel when looking at the mural?”, all the way down to be very narrow, as in “Should we add a shiny effect to the Sun’s contour?”.

Many organizational methods that are considered non-hierarchical, like democratic, cooperative, teal or holacratic approaches, are hierarchical in essence too because they follow the principles listed above.

At this point we can introduce our definition of Governance:

Governance: is the process used to define the hierarchical structure of the organization and how contributors are appointed to it.

Defining the hierarchical structure of the organization usually involves answering the following questions:

Who?

How many contributors will participate in creating the mural? There are three reasons for which we might want more than one contributor:

  • Because of need: When the complexity exceeds the mind and/or actuation power of one single person. This would be the case of companies.
  • Because of will: When we purposely want the process to be a participatory one. This would be the case of democracies.
  • Because of quality: When, even if there is no need of having more than one contributor, having them would result in a better or faster outcome. This is rarely the case.

In the case of our mural, we will assume that it is a fairly complex project that will need more than one contributor.

The CEO

We start by defining the CEO role, with the following duties: Interface with other organizations, ideate the activities at the largest possible scope and appoint the managers of the departments of the organization which will correspond to the second level in the hierarchy.

The Departments

The basic principle used to specify the departments is that they should be as independent of each other as possible, and thus we define the following ones:

  • Design, which will produce the blueprints of the mural.
  • Production, which will make sure all the resources are available when needed.
  • Drawing, which will take the blueprints and the brushes and actually paint the wall.

Each department will have its own internal manager, which, as the CEO, will have the duties of interfacing with the CEO and other departments, ideating the activities within the department at a large scope and appointing the contributors.

The Base Contributors

Besides the department managers, each department will have two other members that will support the manager to achieve the objective. Each one of them will have relatively distinct responsibilities.

This is how the hierarchical structure of the organization will look like:

This is a (quite standard) organigram for the mural painting organization

And this is the same hierarchical structure, but seen from above. This is an important remark: top viewed hierarchies are not less hierarchical than side viewed ones.

This is the same (quite standard) organigram for the mural painting organization. Seen from above.

What?

Now that the group of people who are allowed to (or expected to) participate in the process of painting the mural are defined and nicely organized in a pyramid-like structure (drawn from the side or from the top), lets see what each of them actually do, because it is there when decision-making comes into play.

Decision-making: is the process used by a contributor to choose one among all the actuation options she has.

The CEO role is focused on ideation and the CEO’s actions consist of identifying and choosing between a usually reduced set of alternatives of large scope each. However, the CEO will take the decision, even if simply stated, based on a huge amount of information stored inside her mind.

Once she takes this decision, this becomes the input to the department managers who will, in turn, ideate a plan for their department and appoint their contributors accordingly.

The ideation plans of the department managers are decisions too. And these are taken using a process similar to that of the CEO, combining the experience and information they have inside their minds, and communicating the plans to their base contributors.

Finally, the base contributors will receive some inputs as guidelines about the work they need to do and will start working on it. They will still have a margin for decision-making, but the scope of their decisions will be limited.

The flow of information and decision-making would look like this (apologies for the small fonts, try opening the image in a new tab):

The diagram shows that the scope of the decisions is larger on the left and smaller on the right, but, at the same time, that the number of decisions is lower on the left and higher on the right. Colors show that the information associated with a decision is selectively communicated from the top-levels to the lower levels so that the information in the CEO mind spreads and mutate all the way down the hierarchy.

Once the ideation process is done and the lower layers can start the implementation phase, and if everything goes as planned, the mural would be successfully draw within schedule.

Except things never go as planned.

The ideation process was done based on some assumptions and expectations (a model) about the real conditions that would be faced during the implementation. We refer to this model of the environment as the context in which the decision is taken. Because the context is, of course, not complete nor perfect, implementation will not occur exactly as it was planned.

As the work advances, information from the real world starts flowing upwards the hierarchy. It might be a designer who realizes that the requested size of the mural does not fit into the available space, or something else. This new information is, in many cases, perceived by the lower hierarchical level, and pushed upwards to the ideation layers who can decide on planing again their own actions, if it won’t affect the other departments, or forward it upwards to the CEO if it will.

You can see that the amount of information is larger on the right, and it is gradually filtered as it goes up the hierarchy, so that few of it (the one relevant for larger scopes) reaches the higher levels of the hierarchy.

As new information arrives, the context of each contributor changes and the decisions that were previously taken need to be revisited or new ones need to be taken. The ideation > implementation cycle starts over.

Creation is a continuous repetition of this cycle.

In the process, a large amount of information is sensed and communicated among the contributors and a large number of decisions are taken based on it. And this happens continuously, at all levels within the hierarchy.

The diagram below shows how an organization is actually flood with information and decisions arrows:

All the information that flows up and down the hierarchy is absorbed and processed in the mind of each contributor. And it is the mind of each contributor the one that is able to convert the information into actions.

This is a very important fact, because it shows that a big portion of the hierarchical organization process works because there are appointed minds (human brains), with a huge mind power that process the information at every level of the hierarchy and filter it to communicate it, clearly and nicely, to other minds in the hierarchy.

If it were not for these minds that focus on holding and communicating information and make complex associations and decisions based on it, the process would break and the result would be, well, an ugly mural, in the best of the cases.

Non-hierarchical

Now that we have a simplified but broad description of how a typical hierarchical organization works and how this structure enables multiple contributors to cooperate effectively and create high-quality common outcomes, let’s consider the case of a non-hierarchical organization and the challenges it would face.

There has been an interest in non-hierarchical and/or participative organizations for very long. The whole cooperativism movement has chased this for several decades, even centuries.

Moreover, hierarchical organizations seem to be at the beginning of a crisis. Many contributors of hierarchical organizations (a.k.a. workers) are dissatisfied with their job (at least half of them), while young workers commonly find themselves uncomfortable inside companies.

At the same time, communication technologies and habits are changing fast, and this should naturally result in deep changes in the way we organize ourselves. Ways that are different to the isolated and hermetic islands that current organizations represent.

For all these reasons, interest in other organizational structures, either non-hierarchical or participative, is growing.

Non-hierarchical vs Participative

At this point is good that we clarify one point: a non-hierarchical organization is not the same as a participative one:

  • A non-hierarchical organization is one in which you cannot derive a stable hierarchical structure of its organization process.
  • A participative organization is one which, even if being hierarchically structured, purposely enable its contributors to have an influence beyond one place inside the hierarchy.

Non-hierarchical organizations are groups of contributors who managed to coordinate themselves without an explicit central planning system. Insect swarms are an example of these, but swarms are able to create only simple geometrical shapes.

In humans, the only non-hierarchical organization system that is able to create high-quality complex outcomes is the market, and even in markets, temporary hierarchies emerge in the form of supply chains coordinated by big corporations. Moreover, markets also tend to create organizations, inside which market rules are not valid anymore. It seems that organizations with some level of central planning won’t be replaced by purely decentralized markets of individuals anytime soon.

For this reason, the purpose of this post is not to explore the fascinating problems of how markets could be extended to completely absorb organizations, nor how market concepts can be used to change the way organizations work. We will focus, instead, on how hierarchical organizations can be more participative.

Participative Organizations

A participative organization is, in general, a hierarchical organization in which the contributors are not limited to influence the organization from a single location of the hierarchy.

The first and probably simplest approach for a participative organization is a democratic approach. In this approach, the contributors get to decide, collectively, who is going to be the CEO.

It is a sounding solution because it is simple and has a large scope: let’s just collectively take the first decision at the top of the hierarchy, which is to appoint the CEO, but then all other top-level decisions are taken by that person once she is appointed. As it should be clear from the figure, the structure of the organization is still hierarchical, and the immense majority of decisions are still taken by contributors based on their presence and place within the hierarchy.

Remove the CEO

What would be the next step, after democracy, to make an organization even more participative? In some occasions, the first reflex is to remove the CEO figure and replace it with a committee composed of the department managers.

If the CEO is removed, however, it means that the processes her mind was performing would have to be replaced by the combination of the minds of the managers. Here is where things rapidly start to break.

In order to make decisions, the managers need to combine and associate several pieces of information. However, because this information is now distributed through their minds, they would need to rely on contributor-to-contributor communication to make such connections.

Contributor-to-contributor communication is usually done in meetings, but meetings are expensive in terms of time and energy, and their cost increases quadratically for each additional participant. For this reason, meetings that are focused on replacing the things that the CEO would do, tend to become time-consuming, confusing and ineffective. Very soon the managers would start wishing that the CEO figure is restored.

Remove all managers

Some organizations chasing the non-hierarchical dream try to go all-in and remove all managerial roles at once, leaving only the bottom implementation layer of contributors connected as a network. Any ideation operations are expected to be either performed collectively by all base contributors, or their scope to be local to one or just a handful of contributors that work independently of the rest.

This network structure is appealing and actually can work. Just only in a limited number of cases, where the product of the group of contributors is not one, but are many, and can be produced and sold by one or a handful of contributors. In these cases, the decisions and actions of one base contributor, or a handful of them, barely affects the actuation and decisions of the rest of base contributors. Communities of practice or service providers of the sharing economy are potential groups that could follow such an approach.

However, standard hierarchical companies in which the output product is common to many contributors and sold in behalf of the entire group, such as in the case of our mural, the network approach won’t work.

Preconceptions about “participativeness”

Democracy as a participative hierarchical process is a well established and familiar process, at least for us in the Western world. Because it focuses on taking one single collective decision with the largest possible scope, it is usually designed around the following principles:

  • The more people influence a decision, the better the decision outcome is.
  • The power of influence of each person should be the same as that of everyone else.
  • The voters chance of "being right" is the same for all voters.

These three characteristics, however, also tend to make the voting process slower while tending to polarize people. This is because there is only one (ultimately binary) decision, and so it is easy to divide the batch of contributors in two separate factions.

New conceptions about “participativeness”

Participative processes that go beyond a democracy and want to achieve levels of coordination and quality as those seen on current non-participative organizations must shift from these preconceptions if they want to be able to take a larger amount of decisions collectively.

Some of the new paradigms of collective decision making, in my opinion, should be:

The fewer people influencing a decision, the better, as long as everyone has the same opportunity to do it. This is desired because the fewer people there are, the better the communication and the faster the decision can be taken.

Voting is a communication event. In most human activities its hard to argue that everyone has the same "chance of being right". Think of coaching a soccer team, directing a music orchestra, hiking in the mountains or driving the negotiation of a big contract. Why would everyone have the same chance of knowing the right path to take if they have different contexts?

This means that participation should move away from counting votes and get a lot into sharing contexts. The communication should not be about what someone thinks should be done, but on why she thinks so.

Being clear about the fact that the “chance of being right” is not the same for all may also help people have a more humble approach to collective decision-making. In a democracy, having a final result different from your own vote is seen as a horrible defeat. The truth, however, is that, as soon as you start making decisions with the help of others, getting it exactly your way should actually be a very rare case.

Assuming and being comfortable with the fact that you are probably wrong is, therefore, a fundamental part of scalable participative decision-making.

Some ideas for participative decision-making

Participative decision-making starts with current decision-makers opening their internal mind process to others.

By now it should be evident that collective decision-making should be all about communication. Participation requires, therefore, a technological tool to boost the association process that occurs inside the mind of a contributor to happen, at least partially, outside of it.

Open an Owned Role

The first proposal for participative decision-making is to make a small variation to the hierarchical roles-based structure in which each contributor communicate the key aspects of its internal mind process in a manner that other contributors are able to access. The contributor should also leave entry points for other contributors, where they can comment or make proposals to this internal process. This is where co-creation starts to occur:

Co-creation: Is achieved when two or more minds influence the actions of one role in the hierarchy and without further subdividing their influence into sub-roles.

This is done in current organizations through informal private consultations, document reviews and meetings. The proposal is to do this continuously, asynchronously and openly so that many contributors can access and influence this process. Technological tools can help simplify this process.

Participative decision-making starts with the individual decision-maker opening his mind by sharing information with the rest of the organization and leaving spaces for others to influence it. Technological tools can help simplify this process.

If every contributor follows this communication process to share the information they possess, the entire organization will be accessible to all the contributors, while keeping one contributor responsible for each role in the hierarchy.

With this in place, the organization becomes more a hierarchy of roles and less a hierarchy of contributors. This is very close to the concept of roles in Holacracy or Sociocracy.

This is how the organization would look like if you separate the role, denoted with a #hash symbol.

The role of the contributor is separated from the contributor itself, and a digital tool is used by the contributor to communicate the information relative to the roll. It provides an entry point to other contributors to read and comment on the information shared.

Open Organization — Virtual Contexts

The dream of a fully open and participative organization might be now described as an organization in which the roles in the hierarchy evolve out of the contributors head and become fully independent virtual contexts, replacing the internal mind contexts that were originally monopolized by one mind.

These virtual contexts would be controlled by multiple contributors contemporary and their outcomes would replace the actions taken by single contributors.

Instead of expecting all contributors to participate on all contexts, contributors would have the freedom to move and specialize around some of these while the history and reputation of each contributor could be used as a criterion to define her influence on them.

This is how an open organization, based on virtual contexts controlled by multiple contributors, would look like:

Open and distributed participation is achieved when each role is controlled by a large number of contributors instead of one, or mostly one.

CollectiveOne as a Co-Creation Tool

We in CollectiveOne are working on tools that enable effective co-creation. This is, tools that let organizations create their “virtual contexts” and flexibly nest them, and that enable two or more contributors to influence and control one or more of these virtual contexts.

We see the process of controlling a virtual context by more than two contributors as a communication process, and not as a voting one, and it is for this reason that we are developing tools that enable these contributors to share their own ideas and combine them together, learning from each other. We use GIT as an inspiration, but evolving it to become a GIT of ideas and conversations, instead of code.

The current proof of concept is already online, and it enables you to flexibly organize ideas and conversations around a network of contexts. You are welcome to give it a try at www.collectiveone.org.