How Decentralization Leads to Leadership

Welcome to the second installment of the DAOs & The Network State Newsletter.

Jan 31, 2023

The goal of this article is to summarize the discussion that took place in the Twitter Space titled “DAO Leadership.” See the link for the full recording.

Become the kind of leader that people would follow voluntarily, even if you had no title or position. ~ Brian Tracy

Leadership is an indispensable characteristic, always of utmost importance, especially in situations where roles are not clearly defined. In the absence of structure, individuals seek guidance, leading to the rise of leaders.

In the new and rapidly evolving area of Web3 and decentralized autonomous organizations (DAOs), well-defined roles are rare. For example, DAOs don’t have bosses. Which has its upsides and downsides. It is great for autonomy but not so great for clear guidelines and direction. This type of new organization attracts visionaries and idealists, but the path forward is often unclear - especially in crypto winters.

The emergence of leadership is the key piece of the puzzle. Without leaders, a DAO is like a boat without a sail. With strong headwinds, it will simply drift off. With a leader, a DAO can have all the upsides of a traditional organization and not suffer from the downsides. A boat that is able to explore the waters creatively, and when a storm emerges, a leader can guide the DAO to safety.

Does the Concept of Decentralization Negate Leadership?

This is a fascinating question, and I think it gets to the heart of the matter. Decentralization takes off the table creating roles we are all too familiar with. For example, can a decentralized nation have a dictator? I am going to go with no. I suppose, in theory, everyone could vote for a dictator. But, looking at the spirit of decentralization more so than the letter of the law, the answer is no.

Can a dictator be a leader? Well, yes. In a way, a dictator is almost surely a leader in some capacity. But what's the difference? What's a leader that can’t be a dictator (or boss, for that matter)? The key difference is that while a leader rises to a place of authority, they lack any formal way to remain there. I don’t believe decentralization negates leadership but it does create a difficult tightrope to walk.

Leaders must always inspire followers to action but never force them. Impact DAOs is a project all about walking that tightrope. As deepa from Impact DAOs articulates, “a leader is about direction, not orders.” A leader guides you to a place, then leaves the door open.

In the words of mel.eth “leadership is crafting a beacon we all want to move towards.” We choose to move toward a leader, which isn’t always the case with a boss or dictator. It's subtle, but it's all the difference in the world.

Dictators or bosses may inspire everyone to move together for a time, but this usually runs out. Then they rely on force. Leaders need to do this consistently, or people don’t move with them. It is a much higher bar to reach, but it is pure coordination magic if you get there. This was articulated by DAODenver using the analogy of push vs. pull. Leaders don’t have the lever to push people; they can only pull people.

DAOs Pull You In; You Decide to Stay

In a way, the moral of the story is that DAOs can only keep people via solid leadership. This implies that a DAO that lacks leadership is likely to fail. This is an interesting corollary as there is more to DAOs than just the leaders. There is governance, products, protocols, etc., but a leader is required to pull all these elements together. The better the other elements, the longer the DAO can stay on course, but, without leadership, it seems like a ship that is destined for the rocks.

However, the good news is that DAOs should pull in leaders, as they allow leaders to truly flourish. If you can step into pure decentralization and provide a beacon to follow the outcome will be pure unforced coordination.

How to Stay Connected

We are hard at work developing a meeting place for these conversations. We are looking into a platform, a discord channel, and a Twitter account devoted to these conversations. For the moment, please follow the host of the Twitter Spaces @MemeBrains, and he will be sure to keep you up to date. The next Twitter Space will be Feb 2 at 11 MT, see link here. I look forward to future conversations!!