A DAO opportunity for the private sector
This article is about how new methods of organizing with the help of Digital organizations (Decentralized Autonomous Organizations) can transform the way we currently operate in the private sector. Moreover, it delves into the various centralized decision-making shortcomings mentioned within the Caribbean Blockchain Network DAO viability research report. While these insights focus on curacao, they could also apply to other Caribbean islands and nations of the world.
The private sector generates & manages costs and income by creating products or services for the public. On the contrary, the public sector, are publicly owned or funded organizations (which in democratic societies should represent the public) that provide products or services for the people.
Both of these sectors, with an emphasis on the private sector, experience multiple shortcomings due to the dominant centralized decision-making organizational modus operandi such as Cooperation, accountability and transparency (Caribbean Blockchain Network, 2019).
Within that report, DAOs are presented as an alternative organizational tool that could structurally tackle these common shortcomings. But next to structurally tackling the reported problems what other benefits could DAOs have for your company or organization?
- Digital transformation?
- Increase in the remote workforce?
- Increased productivity?
- Low operational costs?
- Shared ownership = shared commitment?
DAOs — are part of digital transformation
With the rise of more disruptive technologies such as more usage of cloud, Internet of Things (IoT), Augmented Reality & Virtual Reality (AR & VR), Artificial intelligence, Renewable energy, Robotics and Blockchain technology. It has become essential for organizations within the private sector to reinvent their importance within the various communities they operate and adapt to the current trends driven by the goal for a world of sustainable efficiency powered by technology for all. One crucial step for many organizations that operate within the private sector is the first steps to transform their companies digitally.
When the words “Digital transformation” are being used, there is a general assumption that it is about hiring the next team of IT experts or installing the next best enterprise software package. Instead, the real meaning behind digital transformation within the private sector is the social adaptation to the new digital tools that are available within an organization and prepare everyone to co-exist with the technological reality that is being created and implemented.
In other words, it’s about how social groups organize themselves through or around the above mentioned technological tools that will define if digital transformation is effectively taking place.
With this said, to efficiently digitally transform the various private organizations and make them compatible with our fast-changing world. Social innovation and transformation within companies and organizations should take place, which will help prepare organizational culture for the digital world.
“Your job will not be taken by robots but by people who understand digital better.” — Paul Bessems
From digital transformation to increased productivity
The world is using more and more digital technology yet our productivity growth is still slumping. Why? one might ask. Let’s revisit what productivity is:
Being productive = Minimum input for the maximum output.
Since the 1960s (start of the modern-day office), there has been an evident decline in Labor-productivity growth in the world’s most “advanced” economies. When we look at the historical numbers of productivity growth, we see the following:
A decline in growth isn’t always an adverse event. However, it becomes a point of concern when our costs for prosperity continue to increase faster than the growth of our productivity. Which, creates a vast inconsistency which countries tend to coverup with borrowed capital, further increasing the public debt. For example, the public debt in Curaçao increased annually over the three years considered. In 2015, Curaçao registered a total public debt of approximately 2.5 billion NAf, whereas by 2017 the outstanding public debt of Curaçao had increased to just over 2.8 billion NAf in total.
After all, you must be able to justify more consumption with more production.
A prominent method to balance production and consumption is improving productivity. Office workers, in particular, are not becoming sufficiently productive because these tend to use expensive institutions to increase the trust between parties. For example, checking & typing in data repetitively, friction when sharing knowledge because of physical or digital walls between departments, companies or legacy systems.
It’s increasingly evident that organizations have to adjust to the possibilities of our digital societies, where value is exchanged automatically from workstation to workstation. This is where technologies such as blockchain technology have an important role.
One of the essential solutions for the problems we are currently facing, such as inequality and increasing public & private debt, is to improve our productivity. We have the tools for this. The problem is that we do not change the organizations with which we use these tools.
Old organizational practices with new organizational technology → Continuous inefficiency→ productivity deterioration.
New forms such as network organizations and communities with blockchain technology as the basis, fit better in this age.
At this moment, there are usually many parties between supply and demand. These parties are, for example, lawyers, HR-workers, accountants, banks, managers, these are needed because supply-side, and demand-side usually don’t know each other thus don’t trust one and other. Organizing with blockchain technology as the basis is a solution for this. However, if we move to programmable institutions and Decentralized Autonomous Organizations (DAO), we as humans should think about what we will be doing with the free surplus time created by these tools. Or as Karl Marx stated: ‘The production of too many useful things results in too many useless people’. People that do not have to go to the office because intelligent machines, computers and protocols take over our “work”, have more free time available.
The tool
One reasonably new digital tool which could leap an organization into the digital future, which is getting traction within the blockchain space are Decentralized Autonomous Organizations (DAOs). In a recent study (Gartner, 2019), DAOs have been recorded on the Gartner hype cycle for emerging technologies (see figure below).
DAOs, in short, are seen as digital organizations where the various data transactions/interactions are recorded and enforced by a distributed network of nodes (Blockchain). They offer many social benefits if implemented and driven by goals that reflect this.
DAO, DAO, DAO…, how does this abbreviation currently look like? let’s have a look 👁:
Alchemy, MolochDAO, Aragon
New forms
DAOs could redefine the way we see firms physically and structurally. It is where our organizations/companies will look less like this:
And more like this:
Alright, not entirely but I hope one could imagine where DAOs could change our current societal modus operandi. It could move structured organizations to a goal-driven organism like structure such as a flock of starling birds or a school of fish.
DAOs transform the physical workspace into a digital interface with digital democratic decision-making capabilities, radical transparency, strong immutability and traceable accountability. Which the CBN research report highlights as a recurring structural shortcoming in Curacao’s traditional organizations. Lastly, it is a new way to increase our ever declining productivity growth.
Paul Bessems inspired this part.
DAOs — the future of work on steroids
Decentralized Autonomous Organizations create the opportunity for Decentralized Autonomous Workers (DAW), better known as “self-organizing remote workers”. DAOs don’t only create more geographical flexibility for workers but also an opportunity for organizations/companies to tap into the international skills market. Giving individuals cross-continental contribution opportunities for various organizations and cross-continental hiring opportunities for whichever causes.
Moreover, it’s important to note that current DAOs don’t see employees but contributors. Shortly said, contributors add value, and that value is easy to assess. That’s not always the case with the traditional employee. Plagued by repetitive work, inconsistent or subjective expectations, lack of feedback and growth opportunities, it’s evident why a large percentage of the current workforce is disengaged and inefficient (Stewart, 2018).
Other benefits remote workers bring to private organizations are (Affirm Agency, 2016):
- Remote workers cost less
- Your team will be more productive.
- Remote workers are more engaged and in turn more loyal to the cause.
- Remote venues can be better than the office
DAOs — publicly private & privately public
There has always been a constant conflict between the public and the private sector. Here is where decentralized decision making that DAOs provide could be the next big leap to fuse the public and private sector, transforming into the “publicly private” sector. The organizations within this sector start as private organizations but move towards a more inclusive governing structure. Where executives, managers and employees do not just operate the companies.
But through transforming the company into a digital democratic entity, which for the first time creates the possibility where the user doesn’t just use the products and services produced by the company but also has voting power (ownership) within the company. It helps the private sector leverage the wisdom of the crowds and creates an opportunity for consumers & workers to have a say in decisions that affect their lives. Shortly said, it is a way to democratize the enterprise.
Don’t want to democratize your enterprise?
Then create a DAO with a firm power structure but still let your “employees” benefit from built-in public features such as transparency & provenance.
Important note: DAOs are modular and thus can be shaped in various types of organizational structures. Nonetheless, it does offer for the first time the possibility to create large scale shared ownership with low friction.
“So, how can I start one of these DAO things?”
The best way to start is first to take a look at existing DAOexperiments happening in your region for this article which is aimed at a Caribbean audience; a good example is the CuraDAO.
CuraDAO — the perfect learning environment
CuraDAO is a recent DAO that has been initiated on the island of Curaçao by various citizens to experiment with these new organizational technologies. With goals such as researching new methods of applying DAOs in various sectors in Curaçao, Working on projects oriented around the sustainable development goals and leading digitalization by example. CuraDAO is built with the technological stack of DAOstack technologies and currently uses Alchemy as it’s decentralized application interface. CuraDAO is an open digital organization that can be viewed by anyone and everyone has the opportunity to participate within its decision-making process.
Since CuraDAO is an already existing DAO focused on the island Curaçao, it could benefit any existing organization that wants to experience how digital transformation, decentralized governance and decentralized working could look like by joining, following or financially supporting CuraDAO. Not interested in CuraDAO?
Feel free to set up a new or an existing organization in less than six clicks, no KVK(Chamber of Commerce), Traditional business bank account, limited governance structures or costly third parties. Make your organization digitally transform itself through (co-)creating your own DAO. Set up a Web3 wallet (Metamask or Portis)and follow these links:
Aragon: https://mainnet.aragon.org/#/
DAOstack: https://dorg.tech/#/dao-creator
Colony: https://colony.io/connect
DAOs are a new opportunity for any social entrepreneur throughout the Caribbean or Curaçao to start their initiative through the power of blockchain technology!
Want some help or advice about DAOs in the Caribbean? Send an email to info@caribbeanblockchain.net
References:
Gartner. (2019, August 6). Hype Cycle for Emerging Technologies, 2019. Retrieved September 13, 2019, from https://www.gartner.com/en/documents/3956015/hype-cycle-for-emerging-technologies-2019
Stewart, B. (2018, July 3). Future of Work: Connecting the Real and Digital Worlds via Smart Contract Events. Retrieved September 12, 2019, from https://medium.com/@BIGbenStew/future-of-work-connecting-the-real-and-digital-worlds-via-smart-contract-events-7d924a21d22d
Affirm Agency. (2016, April 14). Is Remote Work Right For Your Company? | Affirm Agency. Retrieved September 12, 2019, from https://affirmagency.com/2016/04/11/is-remote-work-right-for-your-company/
Caribbean Blockchain Network (2019, October 30). Viability of decentralized decision-making within Curaçao’s institutions. Retrieved October 30, 2019, from https://caribbeanblockchain.net/wp-content/uploads/2019/11/CBN-DAO-Viabilityreport-2019.pdf
McKinsey & Company. (2018, February). Solving the productivity puzzle. Retrieved November 1 2019, from https://www.mckinsey.com/featured-insights/regions-in-focus/solving-the-productivity-puzzle
Bril, W., & Bessems, P. (2016). Blockchain Organiseren: Fundamenten Voor een Nieuwe sociaal-economische orde.
