What the Rise and Fall of Crypto Can Teach Us About Managing Distributed Teams | Entrepreneur
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The crypto industry has had a very exciting and tumultuous ride over the past decade. Great companies have been founded using blockchain technology and the promise of Web3 has created a market currently valued at $2.86 billion.
While many view the 2022 crypto bust as a strictly monetary sinkhole, there are some very interesting distributed team management lessons to be learned from the industry’s six-year bull run. Decentralized Autonomous Organizations (DAOs) introduced a new way to organize teams, new blockchain tools sprung up to enable greater collaboration, and the crypto boom proved that caffeine-fueled nerds can executing common ideas in a way that even Wall Street struggled to understand.
Despite the mistakes of the Web3 marketplace, you shouldn’t consider these achievements Web3 fairy dust. Innovation-minded business leaders and entrepreneurs should take note of the described workflows and processes that have supported the growth of Web3 over the past six years. Whether or not you believe in the underlying technology, these lessons provide insight into what entrepreneurs can replicate in the ever-changing dynamics of team management.
Related: How DAOS is changing leadership
What is a DAO?
One of the coolest things to come out of the crypto boom – in terms of team management – is the Decentralized Autonomous Organization (DAO). A DAO is a democratized organizational structure running on the blockchain network. It is a collective of like-minded people with a shared financial account, working towards a common goal. It’s similar to a digital co-op, but instead of having leaders selected on the board, each member has the right to vote. DAOs can have equal governance for each member or weighted votes based on the number of tokens each member holds.
This type of organization presented a new way of organizing and managing teams spread all over the world. It uses an automated and democratic system that blockchain technology can provide. Let’s dive into some of the management lessons from crypto and Web3 companies, especially DAOs, that can be applied outside of the blockchain industry.
Management of split workers
The DAOs have successfully brought together thousands (if not hundreds of thousands) of anonymous people to achieve a common goal. While not a realistic or necessary goal for traditional organizations, business leaders can learn a lot about managing split workers in the future of work.
Web3 startups have led the industry’s growth over established companies because they have been able to scale easily to respond quickly to market demands. Outside of the Web3 industry, every business is increasingly faced with disruptive technologies. You can’t expect your competitors to give you six months to build a new team to capitalize on a new trend, you need to be able to move quickly.
Project or split hiring is a way to scale quickly to meet new demands while attracting top talent who want to work on a challenging project and don’t want to be tied to a long-term deal.
Related: How DAOs Can Transform the Business World
Take advantage of peer recognition
Peer-to-peer (P2P) recognition is extremely important in distributed and remote teams to help build culture and accountability and act as an incentive driver beyond monetary compensation.
Web3 companies have done this very well because all data and transactions are publicly recorded on the blockchain and are accessible to everyone. This ensured that any recognition was public, inclusive and decentralized. P2P recognition could also be linked to incentive programs, which leveraged social and monetary recognition. Blockchain and smart contracts go hand in hand to promote transparency and efficiency in governance and management that engenders trust among its members and the community. However, every organization can strive to become more transparent with its employees and with the public.
Non-Web3 companies should strive to create an equally transparent and public P2P recognition program. A study found that when an employee is recognized once a month, their engagement increases by 43%.
Offer a condominium
Engaging employees and making them feel ownership is another big driver for the future of work. The DAOs achieved this because literally every member of the DAO was invested in the organization. Many companies have also experimented with NFTs as a way to unlock perks or as a reward containing unique value aligned with brand vision, mission, and strategy.
Companies can align their incentives for teams by considering both the interests of team members and the goals and objectives of the organization. Examples of this may be profit sharing, equity participation, or performance-based incentives or benefits.
However, monetary incentives are not the only way to offer shared ownership. They’re not even the most important.
It’s more important for workers today to feel they have a voice and a stake in the game. Include employees in the decision-making process (especially during product ideation) and ensure transparency in decision-making goes a long way to making employees feel included and engaged.
Distributed Decision Making
Beyond engagement and ownership, distributed decision making is simply better decision making. Good leadership involves giving up sole ownership of decisions and valuing the contributions of team members, which can lead to better decisions. This concept is built into the structure of a DAO because it directly applies the contributions and votes of all members in the decision-making process.
Even without DAO, companies can adopt DAO-inspired procedures such as decentralized and democratic governance that can create a culture of collaboration that allows distributed teams to be more efficient and productive. Distributed decision-making lets you scale and react faster by leveraging diverse backgrounds and inputs, quickly A/B-testing ideas, and getting feedback from larger groups.
Consider adopting a democratized organization, either bringing together smaller teams with like-minded members to achieve certain goals, or even company-wide, conveying a single mission or goal and including members of the team who believe in the same principles.
Related: 4 Reasons Decentralized Business Management Is Booming
We do not recommend that your organization move to full decentralization. One of the big things we see coming in the future for organizational management is the idea of hybrid DAOs, where there is a fusion between the traditional business structure complemented by DAO mechanics.
While the massive growth of the crypto and Web3 industry has changed dramatically over the past year, the principles used to reach these heights are invaluable to any organization. Blockchain technology is not going anywhere, and businesses will face a much more automated, agile, and transparent marketplace full of disruptors in the future. Whether your business uses blockchain or not, these principles will help you compete in an increasingly decentralized world.
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