The book lays out 4 imperatives for A Radical Enterprise:
- Team autonomy: collaboration based on intrinsic motivation and freedom of commitment;
- Managerial devolution, including devolution of compensation: decentralization of power to self-managing teams who also make compensation decisions. Leadership is granted by the trust of peers and limited to the situation at hand;
- Deficiency gratification: creates conditions for the repeated gratification of human needs through autonomy, fairness and esteem;
- Candid vulnerability: establishes a culture of openness and transparency.
The book presents many examples from organizations that have left the traditional hierarchy behind and moved to a collaborative way of running the business while achieving outstanding returns: from manufacturers like Haier and W.L Gore to fintechs like TIM Group to healthcare like Buurtzorg and HR providers like Haufe-umantis.
Radical enterprises excel
The strength of the book lies in laying out the imperatives and documenting them with examples from the companies that apply these principles. Some of these companies have tens of thousands of employees, proving that size is not a limiting factor.
The radically collaborative approach helps these companies excel: both as a good place to work and in achieving great market results. Throughout the book you’ll find examples that clarify how the approach works in practice. They also show that it’s not always easy to uphold radical principles, and sometimes people fall back on traditional habits. Becoming a radical enterprise is a journey. The good news is that it can be done, as shown by companies in a variety of industries and sizes.
For a data junkie like me, the book is a little short on numbers. It doesn’t include any statistics or graphs that support the author’s claim and that’s a pity, because the data should be readily available. The conclusion that the radical enterprise is good for people is based on one report, and that’s just too narrow a base for generalization. The other question that was playing through my mind was: if this is the ultimate organization for people, then why would anyone ever leave? From my days leading teams, I know that not everyone enjoys being an autonomous worker. Some people prefer, and excel in a more structured, top-down environment. It’s very personal.
Secondly, the author uses a black and white approach to classify organizations: they are either a dominator hierarchy or a radically collaborative organization. No shades of gray. Dominator hierarchies deprive workers of autonomy and thus can’t achieve the superior economic results of radical enterprises. When you consider that the most innovative and valuable companies in the world are dominator hierarchies, this argument falls flat. These companies might not have great people policies, but they show superior growth and value.
Good for people and business
Companies aren’t either or. Many companies have traits of both, and I would even go so far as to say I’ve seen hierarchies where teams nevertheless operated in radically collaborative ways. And while they did not determine their own salaries, their results were spectacular. Despite the odds, these people were autonomous and showed vulnerability to deliver superior results.
I would have liked to see a path or a framework detailing practical steps to help companies grow towards the desired end state. But maybe mr. Parker has a practical guide in the works?
With that in mind, this book provides a glimpse into the future of organizations, and shows that there is a way to develop a more collaborative way of working, with people taking ownership of decisions and outcomes, while managing themselves as mini-enterprises within the conglomerate. It’s good for people and good for business.
Which means that even without applying smart contracts on a blockchain, many principles of a DAO can be used to run a successful business. The companies mentioned in A Radical Enterprise
are living proof of that. Grab a copy for more inspiration and to get an understanding of how companies could be run in a Web 3 world.
The way we run organizations is based on theories and principles of the early 20th century. To run a successful and sustainable business that’s future-proof, we have to rethink how we collaborate and organize work, and how we reward people for it. The principles outlined in this book, plus the principles on which DAOs are based, provide ample food for thought to redesign every modern business.
Have a great day, Anita