Decentralisation as a superpower
6 min read

Decentralisation as a superpower

Over the last few weeks I have been pulling threads on a few topics:

1. Why are some industries more resistant to change? Education, health, ..most industries government is involved with? And why are these industries also the ones we apparently care about most?

2. What do we draw from recent trends in crypto and investing worlds, such as the rise of retail investors and decentralised finance movements?

3. What on earth is happening on a social level? Rising inequality, dissatisfaction, disharmony, mental health issues, .. clearly something isn't working.

I didn't sit down to write on all of these topics at once. I originally thought they were unrelated interests. However, as I started telling the story of a single thread, a tapestry emerged.

Today I will share a single thread's story. Over the course of this series, I will outline many individual threads, as well as sketch the picture they're creating together.

I believe the answers we need are already here. We need to connect the right dots, communicate the insights, and drive action to what matters. This series will be a humble contribution towards this end.

One reason why institutions are making bad decisions

Institutions are limping. I'll explore just how bad the problem is in a future article. Regardless of 'how bad' and 'the cause', it's clear that trust, performance and cost of institutions are at unacceptable levels.

Many well intentioned people see this and say: "let's fix the institutions!" Chamath of the recently famous All In Podcast [LINK] publicly discussed how he'd like to run for Governor of California, evaluate all the problems, and solve them.

He seems intelligent, well intentioned, and has a track record of success. But I struggle to get excited. What if the problem isn't a better person at the top making decisions, but the very structure of the institution itself, that needs changing?

This thread is a thought experiment on one way that institutions can be flawed.

Part 1: Human biases are more diverse than you think

Effective leaders do many things well, but one of their core skills is to make great decisions. When we are learning, we often aspire to spend time with these people so we can train our eyes to see like theirs.

In other words, we acknowledge that our vision is limited, distorted, and biased. We are unable to see all the relevant pieces of information, nor weigh them in an effective way.

Unfortunately, this is true for all humans to varying degrees (despite my sincere aspiration otherwise.) Effective leaders are almost certainly biased subtly, such that it makes no practical difference (yet), and they will have biases in an areas that have not (yet) become relevant.

It is common to describe our biases as glasses we don't know we're wearing, constantly distorting our perception. The failing of this analogy is that it implies a single bias. We have all of our senses, media we're consuming, different trains of thought, projects we're working on, people we're relating to, and each of these provides a different lens through which we view and understand the world.

We are more like spiders that see with 1000 "eyes", and had some custom made sunglasses that individually fit a unique lens to each window of vision (impressive, despite the trouble they cause). Each lens is distorts colour and shape in a subtle way, but having never taken off our glasses, its hard for us to understand how distorted our vision truly is.

(Even though it's not this thread's story to tell, I must add: It is possible and critical to understand your own lenses, and work on straightening them out / making them more transparent. In my view, this is one of the critical skills we must invest in - self-literacy? - if we are to successfully redesign institutions.)

Part 2: Magazine Co is full of bias

Context laid, our thought experiment begins!

You work as a journalist alongside Jack at Magazine Co. Jane is the CEO. You and Jack write articles that must be selected, edited and published.

Scenario A) You unfairly kill a great piece of writing:

Jack has just proposed a piece for the next issue and asks what you think. Unfortunately he catches you on a bad day, you're still frustrated that he didn't get you a coffee this morning (he never remembers!) This lens of your relationship with Jack is coloured today, and its the lens you read his writing through. You tell him it's not that great (and you believe it!) because you don't realise the way your bias is impacting your judgement, and he abandons the piece.

Of course, we would never do this in real life 😉 but you may have seen similar behaviour in others. How many bad decisions have been made for the wrong reasons?

Scenario B) The leader does not save the day:

You would be fair to point out that this is why we have a CEO. Jane has been hired for her superior judgement, lack of emotional colouring, and impeccable curation of each issue.

Jane is discerning and has noticed that Jack, still quite junior, is very uncomfortable with confrontation. He tends to write cautiously and often she has worked late editing his piece to drive a sharper view. "No view is worse than the wrong view!"

This time, Jack goes straight to Jane with his piece. Unfortunately, he catches her on a bad day, she's busy and doesn't have the cognitive space to truly read and consider his writing on its merits. Instead, she catches a cautious tone in the opening paragraph and immediately concludes it is another 'too-passive' article of Jack's that would take huge effort from her to fix. She doesn't have time. The piece is abandoned.

It was a beautiful piece, sensitively approaching an important topic, and would have opened the minds of many readers to an important new point of view. But it was lost again!

The bias here is more subtle and not uncommon at all. Our most insidious biases are woven around truth. You can be right about a related fact (Jack often writes too passively), yet still be biased such that you miss the point (this time, his piece was appropriately gentle).  

We are humans, our brain is wired to identify patterns that save us time, next time, by jumping to the answer without thinking. But our brains were never designed for the speed and nuance of the modern world. Our pattern matching, left unchecked, skims across the surface and misses desired depth and meaning frequently - no matter how talented a leader we are.

Short of hiring an enlightened, omniscient CEO that is never off balance or biased (if you find them, hire them) - no matter who we insert as a leader will be biased somewhere. They may be able to succeed despite this, in certain circumstances. But once they hit new markets, challenges, team members, personal life curveballs, technologies, .. it will begin to derail the organisation.

Effective unbiased institutional leadership is possible but fragile. Leaders can minimise the impact of their bias by working on their self-understanding, seeking honest feedback, and retaining the humility to change their mind. This is powerful but unlikely to be lasting.

Even without considering misaligned incentives, entrenched power, and special interests (worthy of separate exploration), it is only a matter of time before sufficient change has destabilised the tentative hold the leader has on bias management. Increased stress, new team dynamic as staff turnover, changing market conditions calling on new decision types, or just eventual change of leadership are all eliminate any tentative grasp a regular human has on their biases.

Part 3: Decentralisation as a superpower

We need leadership beyond regular human capabilities.

What if all leadership structures are doomed to eventually fail? What if our error is a belief that any small group of humans could lead effectively, in ever faster, more complex environments?

Ideally, we would take advantage of the fact that every human has bias in unique and colourful ways. For any issue, there is someone who has superior clarity in the group. Anyone who has worked in any institution will agree with me: this is not always the leader.

A possible conclusion is that ideally, we would decentralise our institutions' decision making.

This is an idea that is picking up momentum in many places such as direct democracy, self-managing organisations, and decentralised finance.

It's fair to say they are still niche, and there are many obvious problems for widespread adoption. But if we agree decentralisation can be powerful, this is exactly what we should be exploring:

1. Why is centralised decision making so common today and what are its benefits? (Hint: education levels, simplicity, stability, cost, and lack of technology to solve these issues.)

2. What are the circumstances where decentralisation fails, and what factors limit its adoption? (Hint: advancement in education, incentive design, communication speed, administration cost, and technology to implement all of these needs.)

3. What are the positive consequences of decentralised institutions when optimally implemented? (Hint: increased engagement, creativity, meaning, performance, health, and likely more..)

You guessed it, topics for future articles!

Stay transparent and let your unbiased judgement be heard.

Simon