3 Takeaways - The Power of Leaderless Organizations: How Decentralized Groups are Changing the World (#238)

Episode Date: February 25, 2025

What happens when there’s no one in charge? You’d think chaos would reign—but in reality, leaderless organizations are thriving, disrupting industries, and shaping the future. In this episode of 3 Takeaways, New York Times bestselling author Ori Brafman explains why decentralized networks—from Wikipedia to Bitcoin to social movements—are more resilient, adaptable, and powerful than we might expect.

I'm going to start this episode by asking my guest today to read an excerpt from his book. Our natural reaction is to ask who's in charge? What happens when there's no one in charge, when there's no hierarchy? You'd think there would be disorder, even chaos. But in many arenas, a lack of traditional leadership is giving rise to powerful groups that are turning industry and society upside down. In short, this is a revolution ranging all around us. What are these leaderless organizations and how powerful are they?

Hi everyone, I'm Lynn Toman and this is 3 Takeaways. On 3 Takeaways I talk with some of the world's best thinkers, business leaders, writers, politicians, newsmakers and scientists. Each episode ends with 3 key takeaways to help us understand the world and maybe even ourselves a little better. Today I'm excited to be with Ori Broffman. Ori is a distinguished teaching fellow at UC Berkeley's Haas School of Business and a New York Times bestselling author. His most recent books include The Starfish and the Spider, which is about leaderless organizations, and Sway, which is about leaderless organizations, and sway, which is about the irresistible pull of irrational behavior. Today, I'm excited to learn about leaderless organizations

and find out how powerful they really are. Welcome, Ori, and thanks so much for joining Three Takeaways today. Hi, Lynn. Good to be here. Thank you. Thank you. So, Ori, what is a leaderless organization and can you give some examples? Sure, so you think about the metaphor of a starfish and a spider. You take a spider and you cut off its head

and obviously this spider dies. But what happens when you cut off the arm of a starfish? It grows one back. Because unlike the spider, the starfish doesn't have a central brain. And you think about that as a metaphor for business and society. Organizations that don't necessarily have top-down leadership. Everything from Alcoholics Anonymous to Wikipedia to, unfortunately, Al-Qaeda, are organizations that don't have command and control. They don't abide by the same rules that traditional organizations do,

because they're able to capture the power of networks and of decentralization. Has the internet unleashed this force? The internet has definitely unleashed this force because it allows people to contribute in ways without needing central coordination. And the second force that has happened is that people can also contribute very little but in aggregate the organization grows. So you think for example contributors to Wikipedia page. You don't need to have one expert on a topic. You can have a bunch of people who have some knowledge about it all come together. So you really have the power of the crowd. You have the power of the crowd and you also have

the ability to coordinate either for positive or for negative means, but it enables people to be able to work towards a shared value, a shared goal without the central coordination. Most people would assume that the absence of structure, of leadership and formal organization is a weakness, is it? That's where it gets super interesting. In a way, yes, it might be harder to make a very concrete decision. But in another way, because these organizations don't have central power, they're much more flexible.

They're much more able to respond to changes in the environment. And what's also interesting about these organizations is that the harder that you fight them, the stronger they become because they become more and more decentralized. Can you compare both centralized and leaderless organizations and give some examples? So you think about our war on terror for the last 20 years plus and you ask who's really in charge of these terror organizations? And we've fought them, we've been fighting them. And you take out leaders and you hear about that in the news once in a while, right? This leader was taken out, this leader was taken

out. But what happens to the overall organization? It tends to actually keep on going and it tends to actually maintain its power because it doesn't have the centralized power. You think about the ability of a bunch of small investors to come together through Reddit and all of a sudden manipulate the stock price of GameStop. And you think about them versus the hedge funds and how were they able to just, you know, people who are owning a couple hundred dollars worth of stock, how are they able to have such incredible power you have them working on a similar cause, similar ideology and able to enact quite a bit of change in the financial markets. And what holds these leaderless organizations together? The three things that hold them together that are most important are first and foremost

shared values, that you're going to be contributing to this organization, not because someone's telling you, not because of top-down hierarchy, but because you believe in the shared values of the organization. The second is instead of CEOs, instead of bosses, top-down bosses, you have what we call catalysts. People who start a network and then get out of the way.

And the third element is the power of the circle, that everyone joins as equal partners, that the responsibility is shared amongst all the members, and that the formation is in that circle. So one of the super interesting organizations that I've learned about since the book came out, it's called the Home Church Movement. And as the name suggests,

rather than meeting inside churches, physical buildings, they meet in people's homes. And once you get, I don't know, beyond, how many people fit in someone's living room? 15 people, 20 people? Once you get beyond that circle, they create another circle, and they create another circle, and they create another circle. And you'd ask, who's in charge of the Home church movement? Well, no one's necessarily in charge.

Well, how many members do they have? And when I ask this to people, I get, I don't know, maybe they have a thousand members, two thousand members. The conservative estimate, the conservative estimate is 200 million worldwide. Wow. This is one of the huge religious movements that so many people are not aware of, because they don't have the structures because they don't have the buildings, but they're having power in terms of people. So interesting. What happens when a decentralized organization is attacked? When gets attacked, when a leader is taken out, a new leader would

oftentimes take their place because of the structure. And that actually enables the organization to become even more decentralized and even more difficult to control. So I've been doing quite a bit of work with the U.S. military. And they talk about that the fight on terror is oftentimes a whack-a-mole kind of scenario. And the reason for that is that you take down one leader and then a new leader comes, the network becomes more and more resilient as you attack it. So these networks are incredibly resilient. Do they easily mutate? They constantly mutate. And that's why they're so resilient,

because they're able to constantly mutate, because they're able to constantly adapt. So you've talked so far about groups that don't have any assets, if you will, the terrorist groups, the home church groups. What happens when there's an asset or a right to land or money or some other asset? What happens? This is super interesting. So giving these organizations assets actually centralizes them and actually has the ability to actually destroy the organization. So one of the examples we looked at in the book was the Apaches, and specifically the Spanish,

who fought so strongly against, first, the Aztecs and specifically the Spanish, who fought so strongly against first the Aztecs and the Incas. And they had the playbook down. They said, hey, give us your leaders, talk to the leaders, kill the leaders, took over the societies, and had effective control over the entire South continent. And it's with the winds of victory in their backs that they showed up to the Southwest and encountered the Apache. And they had the same playbook. They showed us the leaders and killed them and tried to take over the society. But the Apaches didn't have centralized power.

The leaders were catalysts. They were called non-tons. The phrase you should does not exist in the Apache language. So the moment that the Spanish took out a leader, a new one would just come and replace them. And the Apache became more and more decentralized, more difficult to control. And their area of influence actually increased as they fought the Spanish, the Mexicans, eventually the Americans. What did change, however, is when the Americans came and gave the Nantans, the leaders, cows. And now that they had cows to give out within the tribe,

all of a sudden the Nantans' power became much more centralized. And when it became much more centralized, they also became much easier to control. So interesting. You mentioned Wikipedia, the online encyclopedia, as a leaderless organization where unpaid volunteers curate the entries.

What happens if the contributions were highly paid? Is it going to be similar to the Apaches? Yes. So a few things would happen, right? One is that the editor would start having a whole lot more power to decide who gets to edit an article, whose voice gets heard. But you also have the interesting contribution

question. If you know that one person is earning a lot of money to write articles, would you be willing to spend your free time to write articles as well? And once you lose that economic benefit of the distributed network, you're not able to quite effectively be as agile and gain from the mass amounts of people who want to contribute. So people want to contribute. So people want to contribute. They want to be engaged. The question is how do they feel that their

contribution was worthwhile? Can you give some more examples of the largest leaderless organizations? Sure you have everything from Wikipedia that we talked about but you also have in finance Bitcoin. And one could argue that Bitcoin is essentially a decentralized ledger. And I remember when Bitcoin came out and I started using it as an example of, hey, look at this thing that is maybe about to have some impact on the world. And people are like, no, this is just a trend. What would anyone ever use for blockchain?

There's no use cases. And it's symbolic of us not seeing the power of these networks until it's too late. We keep on dismissing them because they don't have central power, because they don't have the institutions, the hierarchies. And by the time we recognize the power, they're huge. What is the potential and what is the future of leaderless organizations? The future is definitely decentralized.

And the potential is that it's a more economically efficient way of organizing people around a shared cause. And I like to say that if you're in any industry and you don't know who your decentralized opponent is, you're like the poker player who doesn't know who the weakest player is in the table. You need to know, regardless of the industry, even if it's a traditional industry,

even if you've had historical dominance in that industry, you need to know that decentralization is coming and that it is going to be affecting the industry. And how powerful do you think that leaderless organizations can become? Leaderless organizations are becoming incredibly powerful. And they're out to eat or lunch, regardless of whether you're in finance, whether you're in finance,

whether you're in construction, whether you're in technology. Decentralization is the future and we're marching to it in an incredibly fast space. Before I ask for the three takeaways you'd like to leave the audience with today, is there anything else you'd like to mention that you have not already talked about? So I'm in education and I've started looking about how decentralization is going to be affecting education and I think this is where it gets really interesting is I think that the future is not only going to be decentralized we're going to be learning much more from each other but we are starting to look at how the future is going to be in a virtual space

in either the metaverse or in virtual reality. And training is going to look much more decentralized into the future. So you think about industries where lives are in the matter, whether it's defense, medicine, aviation, the trainings are incredibly lifelike and you learn from each other. You think about a pilot coming on the cockpit and saying, hey ladies and gentlemen, good news, I've never been inside a cockpit but I've read every book there is to read about aviation. Would you stay on that plane? But when it comes to business education, what do we do? We give people case studies. We give them some books. But we don't actually put them inside situations.

And I think that that is where the future is heading in terms of gamified, multiplayer environments that replicate leadership challenges. Interesting. Ori, what are the three takeaways you'd like to leave the audience with today? The first takeaway is to look at organizations through a network model and you look at the specific nodes of the network and how

they contribute. The second takeaway is as you think about each node and as you think about your own performance within that network, how do you focus on internal locus of control? That is, what can you do to affect the actions of your life as opposed to what is happening to you and how do you feel most empowered? And the question is also, how do you get people around you in your network to feel most empowered? And the third element is that the future of organizations and of interacting with each other in a training environment is going to be in a virtual environment that is gamified, that is multiplayer. Thank you, Ori. This has been fascinating. I really enjoyed your book, The Starfish and the Spider.

Thank you, Lynn. It's been a pleasure. If you're enjoying the podcast, and I really hope you are, please review us on Apple Podcasts or Spotify or wherever you get your podcasts. It really helps get the word out. If you're interested, you can also sign up for the Three Takeaways newsletter at ThreeTakeaways.com where you can also listen to previous episodes. You can also follow us on LinkedIn, X, Instagram,

and Facebook. I'm Lynne Thoman, and this is Three Takeaways. Thanks for listening.