The Revolving Door: How Decentralised Organisations are Disrupting Traditional Employment
We all want to work. Making yourself useful, contributing to society, and earning rewards for your effort are fundamental aspects of the human spirit.
In recent decades, though, the anti work narrative has grown in popularity as workers become frustrated with the archaic, hierarchical systems that dominate traditional employment. Systems that, though effective and robust, end up focusing all the power – and crucially the rewards – into the hands of a few individuals at the top, while stifling the innovation, ambition, and collaboration of the workers that make the engine of an organisation run.
Decentralised organisations are a new way of organising human capital that promotes inclusivity, openness, communication, fairness, and transparency. A way of giving the contributing members of an organisation a stake in both its direction and ultimate success.
They are also, if done correctly, a more efficient way of managing working ecosystems, with tools like Talentum helping to harness broader, more diverse workforces from all over the world.
Although traditional employment structures are unlikely to go away anytime soon, the rise of DAOs and DACs is only just beginning, and they may well become the defining use case for blockchain technology over the coming decade. Let’s see why.
What is a DAO/DAC?
DAO stands for a decentralised autonomous organisation. A DAC is a subset of a DAO, but stands for decentralised autonomous company/corporation. They are broadly similar, with DAO being a catch-all term for all sorts of social organisations (there is nothing about a DAO that expressly means it needs to be profit-focused), and DACs being more enterprise focused and created with the goal of replacing standard corporate structures.
If the key goal of a company is to distribute profits to shareholders, then the key goal of a DAC is to distribute dividends to its members. By definition, anyone who works for a DAC becomes a member (as they are also paid in the DAC’s token). This article is on DACs, but almost everything discussed pertains to DAOs as well. There are other types of decentralised structures too.
Decentralised organisations use the blockchain to manage the governance and decision making of the organisation, with members voting on on-chain proposals for actions to be taken. Voting power is acquired through the DAC’s token.
In a traditional company, these decisions are taken by managers and CEOs, and workers execute the given tasks. Payroll is authorised by those at the top (as are variables like bonuses or benefits), and decisions on capital expenditure are made by the boardroom. The decisions feed down through the organisation, often in discrete channels. Usually, in a large business, only the CEO knows the whole picture (hopefully) – everyone else works only within their narrow lane.
Horizontal Hierarchies, Vertical Ambitions
DACs and DAOs instead use the blockchain to manage the business systems. There is no CEO, no management class, and no authority other than the collective authority of every member of the organisation. Important decisions like how to spend a business’s free cash flow are taken collectively by everyone within the team and, since capital is protected within smart contracts and only made liquid through on-chain voting, DAC members can trustlessly accept that the business’s treasury is being used in a way that everyone – or at least, the majority – agrees with.
This shared stake in success means everyone in a DAC is not afraid to speak their mind. Indeed, when it comes to voting on proposals, they’re practically obliged to, unlike traditional employment, where a brilliant idea can be blackballed by a middle manager who doesn’t like a worker (or even stolen from them and presented to upper management to take the credit), and where speaking up can often lead to workplace problems.
This fear-ruled workplace environment is not just a product of individual ‘bad apples’ ruining an otherwise suitable structure (although it’s often the case). Rather, the fear is a product of the system itself rewarding those who serve their seniors and don’t take big risks. There is little incentive for any employee to go above and beyond, as it’s possible their extra effort goes completely unnoticed, or worse, is used to malign them. ‘Keep your head down’ is a common workplace mantra – and it’s a mantra that leads to a massive stifling of innovation.
DACs, above all, encourage active contribution by everyone. As a result, great ideas are never lost to bureaucracy, and everyone has a reason to pull together towards a decided goal.
In traditional employment structures, decisions are made by those at the top. Boardrooms are usually populated by senior members, whose great ideas may have run out many years previously, or shareholders with zero clue on how the company they own actually works.
If a worker has a great idea to improve a company, it may take weeks before the board reviews the idea, if at all, and even if implemented, it’s unlikely the team member who created it receives any direct reward – perhaps just pat on the back and a promise of promotion at ‘next year’s annual review’.
DACs are open-access and transparent. The smallest member of the DAC is still a member of ‘the board’.
Talentum helps DACs find new workers and set specific goals with specific payments for them to take on, and monitors and rewards achievement of those goals. These types of tools are essential if DACs are to operate with the efficiency of a standard business.
Even more crucially, if a worker has a fantastic idea – an idea so good it will change the fate of the organisation – then they can, in effect, ‘promote’ themselves.
For example, a graphic designer may be doing some odd-job work for a DAC, taking them merely an hour a week. Then, after seeing a fantastic opportunity for that DAC, could immediately work 40 hours a week, gain more of the DACs’ token, and become an integral member of the operation and a de facto leader of the community. All of this without once asking for permission, or having other entities validate their ascent in the organisation. With DACs, your reward is commensurate with what you put in.
Vested Interest: Giving Workers Ownership
This feeds into the driving idea behind DAOs and DACs, and indeed a fundamental guiding principle of blockchain technology itself. It’s a simple idea that’s been around for centuries – millennia, even – but one that, before blockchain, didn’t have the infrastructure to take off. That is: giving workers an active stake in the companies they own makes them work better, faster, harder, and stronger.
The reason top tech firms give almost every mainline worker stock options is in acknowledgment of this fact. If you own a piece of something, you’re far more dedicated and invested in its continued success. If you don’t, then it doesn’t take much for a worker to suddenly decide that what they are doing really isn’t worth their time.
DACs and DAOs are generally underpinned by a token that represents a share of the organisation. This token is available on the open market and can be sold freely (unlike locked stock options). Oftentimes, payments made by a DAC to workers performing tasks are also in the DAC’s token – a token they can sell at any point to ‘cash’ their wages. However, if they don’t, a worker naturally over time becomes a larger and larger stakeholder in the organisation they work for. Decentralised organisations can vote, however, to distribute payments in any other currency – whether it’s crypto, fiat, or pebbles. As long as the collective agrees, such shall be.
Moreover, any new person can join a DAC at any time. And anyone working for a DAC can leave at any time. This porous, liminal structure sound scary to any traditional employer, but the benefits are legion:
- New talent naturally attracts itself to successful organisations
- People work because they are motivated to, not because they are forced to
- Near-zero friction between wanting to work for a DAC and starting to work for a DAC
- ‘No fear’ environment. No penalty for leaving. No delay in joining.
- Every member wants the same thing – success for the organisation as a whole
- ‘Personal’ success is defined by the success of the whole DAC
Collaborative Communities of Capital
How often do you promote your workplace to another person? If you work at McDonalds, do you find yourself encouraging everyone you know to eat there more often? Hardly – there is no benefit to you.
With a decentralised organisation however, every member of its workforce is actively benefited by the growth of the firm, meaning they are highly motivated to share its activities with the broader market and boost the publicity and profile of the organisation as a whole.
In traditional companies, capital is often raised through venture capital, and these shareholders become a passive weight on the company. They expect returns, but 99% of the time do nothing except provide capital to create those returns. What’s more, their desire for return on investment can often clash with the broader goals of the company.
For example, shareholders might demand to see a juicy profit margin, but to achieve that a CEO has to cut key workers. The first year the numbers look good, but those lost workers end up damaging the company’s ability to make revenue and ultimately lead to its demise, while the shareholders who pushed for the firings have long since sold up and moved on. This is a tale that is all too common, and a key reason for the excitement around DACs.
DACs create collaborative communities of capital. They align financial contributions with governance rights, and hard work with voting power. Investors become workers and workers become investors.
How Talentum Helps DAOs Fill Their Workforce Fast
A successful decentralised organisation is almost entirely dependent on the quality of workers and investors they get through the door. Although membership is open to all; getting the right members is key. The same is true for workers. They need to find DACs that are going places, which have fantastic membership, and a great track record of dividend disbursement, and last but not least, a novel mission.
Talentum is a place for decentralised organisations and gig-workers to meet, work, and forge connections in web3. With no one locked behind contracts, and no hiring windows, competition for the best workers will always be fierce, and even grunt tasks are high in supply just waiting for the right people to come along to fulfil the duties.
Once DACs get used to using tools like Talentum, and once tools like Talentum grow to help DACs operate like standard businesses, then the structures of traditional employment will begin to fall rapidly, as people wake up to the inherent possibilities a decentralised working structure creates.