Lesson 19, Topic 10
In Progress


UPG Team March 17, 2023
Lesson Progress
0% Complete

Autonomy is a critical attribute of Exponential Organizations (ExOs) that can lead to greater agility, creativity, and productivity. It involves the use of self-organized, multi-disciplinary teams that operate with decentralized authority and ideally self-select their work. This approach stands in contrast to traditional organizations characterized by hierarchical structures and centralized decision-making.

Decentralizing decision-making maximizes agility by empowering members of your team up and down the organizational chart and bridges into community, which then delivers scale. Autonomy is tricky to implement, especially in existing organizations. However, the use of dashboards can help create greater oversight over company operations while also enabling the enterprise to allow for greater autonomy in its operations as direct management interference is less necessary.

In a remote working, post-COVID world, autonomy is more important than almost any other ExO attribute, not least because it is nearly impossible to impose traditional managerial control to a widely scattered workforce. Coase’s law (“Organizations are useful because transaction costs are lower inside an organization”) may no longer be true. Autonomy is also an advantage to fast-moving ExOs because traditional organizations have trouble allowing autonomy (it’s antithetical to the control framework in traditional organizations).

Sangeet Paul Chowdry, co-author of Platform Revolution: How Networked Markets Are Transforming the Economy and How to Make Them Work for You, has noted that we have transitioned from operating companies to platforms to protocols and now to ecosystems around those protocols. A great example of this is open-source projects.

DAOs are Autonomy taken to the full extent and these will soon become commonplace. Currently, governance is the biggest hurdle. DAOs are co-ops running on a blockchain with smart contracts codifying their internal operating rules. Smart contracts thus become the interface. Smart contract and interface-enabled DAOs are why the web3 world is scaling so fast. The end state of autonomy is DAOs.

Bitcoin is an almost perfect embodiment of an ExO. All it lacks is an explicit MTP, but if it had one, it would likely be “A global, peer-to-peer, 21st-century monetary system.” For our purposes, the most important feature of Bitcoin is that it covers all of the attributes, and it exhibits Autonomy most of all. The entire enterprise is just a protocol. The public blockchain and transparent wallets make the whole project reside completely in social space.

Having an MTP in place is perhaps the most critical attribute, as it is the guiding light for autonomy. Having numerous teams operating autonomously is only possible if they all are working towards a common cause. Both dashboards and OKRs are necessary as an overall performance management tool, but they are even more important in decentralized teams. Hiring self-starters as team members will maximize this attribute. A strong and dynamic culture is absolutely critical as the glue between autonomous teams.

The benefits of autonomy are many. Autonomy maximizes agility of the organization, which is incredibly important in today’s world. Because decision-making is closer to the customer, there’s more accountability. Reaction and learning times are both much better. Morale increases as the organization trusts its people. Autonomy pushes trust down to the edge of the organization. Expertise in the organization is more accessible. The organization builds a hive mind, and a form of collective intelligence emerges.

In times of rapid change, it is important to have as many autonomous experiments as possible underway. A great example of autonomy comes from our own bodies – 10 trillion human cells each with thousands of autonomous functions that don’t even register in our awareness. Instead, they are all based on protocols. The result is enormous scale and near-infinite complexity.

So, autonomy is a critical attribute for Exponential Organizations in today’s fast-moving and ever-changing business environment. By decentralizing decision-making and empowering self-organized, multi-disciplinary teams, organizations can achieve greater agility and scalability, as well as increased creativity, productivity, and morale.

While implementing autonomy can be challenging, especially in existing organizations, the benefits are numerous. Autonomy allows for more freedom of action and the self-creation of teams, leading to a hive mind and a form of collective intelligence. It enables decision making to be closer to the customer, increasing accountability and improving reaction and learning times.

To successfully implement autonomy, organizations must have an MTP in place as the guiding light for all autonomous teams. Dashboards and OKRs are necessary performance management tools, particularly in decentralized teams, and hiring self-starters will maximize the benefits of autonomy. A strong and dynamic culture is also critical as the glue between autonomous teams.

Autonomy is not just a buzzword or trend; it is a fundamental attribute of successful Exponential Organizations. As the world continues to change rapidly, organizations that embrace autonomy will be better positioned to adapt and thrive. The end state of autonomy is DAOs, which will become increasingly common in the coming years. By embracing autonomy and other ExO attributes, organizations can create a more agile, innovative, and successful future.

Autonomy is a concept that is becoming increasingly popular in modern workplaces. It involves empowering employees to make decisions and take actions without needing approval from a centralized authority. However, as with any major change, there are challenges that organizations must overcome to successfully implement autonomy.

One of the biggest challenges is the need for a strong degree of trust. Autonomy requires that leaders trust their employees to make decisions that are in the best interest of the organization. This can be difficult in legacy organizations that are designed to mistrust their people. Governance is another major challenge, as autonomous organizations are often scattered and composed of independent individuals and teams. Without clear alignment and key metrics, autonomy can quickly become a recipe for chaos.

To address these challenges, it is essential that organizations have a full alignment on their Most Important Thing (MTP) and vision, so that everyone is on the same page. It is also crucial to incentivize the right behavior, as scaling to the wrong place can have negative consequences. Without top-down control, there is a risk of significant duplication of effort and internal competition. Therefore, the social aspects of peer-to-peer collaboration and communication become paramount.

Another challenge of autonomy is getting a successful, proud team to voluntarily shut themselves down after they have achieved their goals. To incentivize the right choice, organizations can celebrate teams when they do shut themselves down, such as by holding an Irish Wake, as suggested by Brad Feld in his book Building Communities.

There are also some potential problems that can arise with autonomy. One such problem is the lack of role clarity, as job descriptions are typically more nebulous in autonomous organizations. This can lead to ambiguity in job responsibility. Another issue is the creation of invisible hierarchies, as human beings tend to gravitate towards structure. Without a formal hierarchy, informal leadership may emerge based on factors such as personality, charisma, or social class.

High span of control is another challenge of autonomy, as employees in a flat organizational structure may report directly to the boss. This can make management impossible, particularly when questioning employees turn into a flood. Additionally, there may be fewer prospects for promotion in autonomous organizations, as fewer management layers mean fewer opportunities for advancement. Organizations can compensate for this by offering alternative opportunities, such as a different compensation model, a custom career development plan, or added benefits.

Several case studies highlight the success of autonomy in different types of organizations. Valve Software, a game company, has no traditional management structure, reporting lines, job descriptions, or regular meetings. Instead, the company hires talented, innovative self-starters who decide which projects they wish to join. Extreme autonomy—“permissionless innovation”—has worked well for Valve, which has a higher revenue-per-employee ratio than any other gaming company.

Buurtzorg is a Dutch home-care organization that has attracted international attention for its innovative use of independent nurse teams in delivering relatively low-cost care. Space X demands that every requirement must have an individual’s name associated with it, not a department, to give credit where it is due and make each individual responsible for the quality of their results. WordBlu is a consulting firm that specializes in taking leaders and companies from around the world and transitioning them from hierarchical to democratic leadership. Its MTP is “Freedom at Work,” and the company creates a yearly list of global freedom-centered organizations and advocates for more freedom and autonomy in the workplace.

ING Group, the international banking and financial services corporation headquartered in Amsterdam, underwent a complete transformation towards more autonomous ways of working. The company fired all the employees, who then could reapply for jobs in the new structure. In the process, nearly one-third of the workforce quit, only for ING to discover that it could achieve the same business results with just two-thirds the employees. Haier, the Chinese appliance maker, also underwent a radical transformation towards a more autonomous structure. The company divided itself into thousands of self-managing microenterprises, each responsible for a specific product or customer segment. The microenterprises had their own profit and loss statements and were empowered to make decisions independently, including decisions about hiring and firing employees. This approach led to a significant increase in productivity and innovation.

Other companies that have embraced autonomy include Zappos, the online shoe and clothing retailer, and Buffer, a social media management platform. Zappos has been widely recognized for its unique culture, which emphasizes employee empowerment, happiness, and customer service. The company offers its employees extensive training and support, and encourages them to take ownership of their work and make decisions independently. Buffer, on the other hand, has a fully distributed team of employees who work from all over the world. The company has a culture of radical transparency, where information is shared openly and decisions are made collaboratively.

While autonomy can lead to significant benefits for organizations, it also requires a significant shift in mindset and culture. Leaders must be willing to relinquish control and trust their employees to make decisions independently. Employees must be willing to take ownership of their work and be accountable for their results. Organizations must also invest in training and support to ensure that employees have the skills and knowledge necessary to make effective autonomous decisions.

Another challenge of autonomy is the potential for isolation and disconnection among employees. When individuals are working independently, it can be easy for them to feel disconnected from their colleagues and the larger organization. To address this, organizations that embrace autonomy must create a culture of collaboration and communication, leveraging technology and other tools to facilitate connections among employees.

Finally, it is important to note that autonomy is not a one-size-fits-all solution. While some organizations may benefit greatly from this approach, others may not. It is important for leaders to carefully consider their organization’s unique needs and circumstances before embarking on a journey towards greater autonomy.

In conclusion, autonomy can be a powerful tool for organizations seeking to increase innovation, efficiency, and agility. However, it requires a significant shift in mindset and culture, as well as a willingness to invest in training and support for employees. By carefully considering their organization’s unique needs and circumstances, leaders can determine whether autonomy is the right approach for them and take the necessary steps to implement it effectively.

Module is complete, keep up the great work change maker!

UPG Management are certified ExO Consultants, If you would like help building a Web3 Exponential Organization apply to receive consulting and be provided with a free strategy review session by CLICKING HERE.

Additionally, the Exponential Organization modules are powered by OpenExO, UPG’s partner platform for business and creative innovation. We credit OpenExO and the Exponential Organizations 2.0 book for the content provided within these modules. You can join their platform for free and interact with the GPT powered ExO Chatbot by CLICKING HERE

If you have any feedback, questions, or suggestions for this module please fill in the form below.