David Passiak


DAOs and the Future of Work

A Brave New Decentralized World

There is a lot of talk about the threat of automation. AI and robots are coming to take our jobs. Corporations and the government are taking control of our lives. This creates a scarcity mindset of “us versus them,” leading us to ask, How am I going to protect myself? Will I be one of the few people left when machines take over?

In these scenarios, the future of work sounds terrifying. Humans exist in service of machines. Each individual struggles to make a living and is one step shy of being replaced. It’s every man or woman for themselves — survival of the fittest.

We need a new mindset to think about the future of work. As Martin Ford, author of Rise of the Robots, said when I interviewed him for my last book, Empower, “It is crazy to give advice on how you can succeed as a person in the future if we know that it will not work out for everyone.”

In this essay, I want to flip the script on the conventional human-versus-machine narrative and talk about how technology can augment our abilities to collaborate, and how it could usher in a new era of abundance. And in doing so, I want to highlight the power of blockchain technology in the future of work.

DAOs — Decentralized Autonomous Organizations

Most scary scenarios for the future of work assume a traditional, hierarchical organizational structure. There is a CEO and a leadership team on the top, then middle management, then a busy workforce doing various tasks. AI and robots slowly automate jobs, replacing people in their individual roles.

These scenarios don’t factor in how workers might use technology to collaborate, make better decisions, and collectively harness their intelligence in ways that make work more productive and meaningful — perhaps without even needing a management team at all.

  • What if instead of technology replacing humans, it augmented our abilities to unleash new levels of creativity and ingenuity?
  • What if we could collectively make decisions and govern organizations without leaders?
  • What if we could solve problems and increase productivity at scales never imagined?

This is the potential power and promise of DAOs — decentralized autonomous organizations. A DAO has the principles of collaboration and collective decision-making at its core. People mutually support each other in managing projects, and the best ideas bubble up through a process of co-creation between team members, rather than through a top-down hierarchical leadership structure.

Blockchain Technology and Collective Intelligence

Up until now, most successful DAOs have been self-organized. Examples include open-source-software projects with contributions by thousands of developers, or companies like Zappos that remove managers and focus on creating a culture in which people are happy and want to come to work every day, mutually supporting each other around common goals.

Blockchain technology presents a systematic, scalable way to implement DAOs. The way blockchain technology works is that different computers solve a piece of the same problem. The difficulty level is so high that a single computer can’t solve more than 51 percent of a given problem. Therefore, a single computer can’t have centralized control. When a problem is solved, each individual contributor receives a reward or an incentive for their work.

Companies like DAOstack are applying this same approach to collective intelligence and the governance of organizations. Workers can contribute proposals on how to run or direct an organization, which are like the problems solved in the blockchain. They then participate in a process of voting or collective decision-making to reach a consensus. The participants are then rewarded for their participation on the basis of how their individual contributions align with the outcome.

In this revolutionary new approach to DAOs, contributions can be measured in incredible detail around all aspects of complex problems. This eliminates the guesswork of determining who contributed what, flattening the traditional hierarchy by creating a rewards system tied to success. Proposals can be for anything, from solving day-to-day problems to creating innovations that impact the future direction of an organization.

There could be DAOs within and across DAOs, meaning that each department may have its own way of harnessing collective intelligence across a distributed network of contributors. Organizations could also open up voting or collective decision-making to the crowd. They could solicit feedback on new products from their customers or ask which problems the organization should solve. They might even crowdsource tasks to bring in workers on demand, allowing organizations to scale up or down on the basis of needs.

On a fundamental level, with all of this technology it is important to keep humanity at the center of the conversation about work. Being augmented by machines doesn’t mean removing humans from the equation. There is an opportunity to distribute value and ownership, based on worker contributions. This type of decentralized organization can not only create a distributed network of contributors, but also long-term shared value, whereby individuals are part of the value equation as the future of works shifts and changes.

Tokenization and Removing Managerial Waste

The biggest problem in many organizations today is that managers are incentivized to not innovate. Their sole focus is hitting numbers and performance goals. Efforts toward innovation take away focus from selling current products. Work and success become a function of short-term performance.

This is the paradox at the heart of Clayton Christensen’s The Innovator’s Dilemma: good companies fail due to good management. The classic example is Kodak, which invented the digital camera but then failed to invest in bringing it to market. The irony, of course, is that Kodak stock recently skyrocketed when the company announced a new blockchain initiative.

The functioning of DAOs within and across large-scale organizations aligns with the future of leadership characterized by Adam Grant in his bestselling book Give and Take. As he told me when I interviewed him, “The time you spend solving other people’s problems makes you better at solving your organization’s problems.” Encouraging people to contribute to solving all of an organization’s problems, and not just work within the finite role for which they were initially hired, makes them better and more valued employees.

Tokenization becomes a mechanism for aligning incentives for work with innovation and the future success of the company. One could imagine a scenario in which employees have a baseline salary, and then a larger percentage of compensation is tied to their participation in and contributions to collective decision-making via various DAOs. Organizations could be optimized for short-term needs and moonshot innovation projects.

This type of compensation structure based around contributions and value, rather than titles and experience, could ultimately be more productive and keep overall operating costs down. People would be naturally rewarded for contributions that lead to positive outcomes, transforming the workplace into a meritocracy based on collective intelligence. This would align the incentives of managers with long-term innovation projects while also allowing them to focus on hitting their short-term goals.

A Brave New Decentralized World

There is a seemingly infinite number of ways to customize how DAOs might be implemented, from making the payment of employees and budgeting more transparent to managing R&D budgets for innovation and special projects to governments encouraging direct participation in democratic decision-making to making sure society functions in ways that align with a consensus of the greater good.

As DAOs and blockchain technology gain more traction and use cases within larger organizations, they present an opportunity to harness unprecedented levels of creativity, innovation, and collective intelligence in solving some of the world’s biggest problems. Instead of technology being a threat to the future of work, it may open up a brave new decentralized world.

This article was created in partnership with DAOstack, a new blockchain protocol and platform for building DAOs. To learn more about DAOstack and their upcoming token sale visit them here or join them on Telegram.

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