Sun, Jul 05, 2009

Business

Saturday Reader

In Net era, centralized firms need to adapt

By Cecil Johnson
McClatchy Newspapers
Tucson, Arizona | Published: 10.28.2006
"The Starfish and the Spider: The Unstoppable Power of Leaderless Organizations" by Ori Brafman and Rod A. Beckstrom, Portfolio ($24.95)
Spiders have eight legs, while starfish have only five. But, as serial entrepreneurs and cutting-edge thinkers Ori Brafman and Rod A. Beckstrom see it, starfish organizations have a leg up on spider organizations.
The theme of their stimulating and insightful book, "The Starfish and the Spider," is centralization versus decentralization. The spider, which has a head from which its legs radiate, represents centralization. The starfish, which has no head, is emblematic of decentralization.
Because a starfish has no head, the authors point out, it is harder to kill one than it is to dispose of a spider.
"With a spider, what you see is pretty much what you get. A body's a body, a head's a head, and a leg's a leg. But starfish are very different," Brafman and Beckstrom write. "The starfish doesn't have a head. Its central body isn't even in charge. In fact, the major organs are replicated throughout each and every arm. If you cut the starfish in half, you'll be in for a surprise; the animal won't die, and pretty soon you'll have two starfish to deal with."
So what does all of that elementary zoology have to do with the entertainment industry's and software makers' efforts to quell piracy of their intellectual property? Everything, the authors say.
The record labels, they acknowledge, were able to kill off Napster with their lawsuits because Napster, like a spider, had a leader and a central location. There was someone to sue, and that someone could be found and served.
But in putting Napster out of business, the music companies exacerbated the piracy by triggering a proliferation of other, less centralized players such as Kazaa, Kazaa Lite, eDonkey and eMule.
"Companies like eMule are so decentralized that they are beyond the reach of any label's lawyer," they write. "Who would you sue — the software? There is not even a trace of a leader. You'd think eMule doesn't even exist, except that it's hacking away at everyone's profits."
"The Starfish and the Spider" is one of those delightful business books that transcends the genre with its extensive historical references and its tie-ins to contemporary world events.
In initially defining starfish and spider organizations, for example, the authors flash back to the conquest of the Aztec empire by Cortés. They remind the reader that Cortés killed the Aztec emperor, Montezuma, and starved out the population of the Aztec capital, Tenochtitlan, with an 80-day siege.
Within two years, they point out, the Aztec empire collapsed, as did the Inca empire after the Inca leader Atahualpa was captured and executed. The Spanish armies appeared irresistible in the 1680s until they drove northward and ran into the Apaches.
"This meeting — in the deserts of present-day New Mexico — is crucially linked with music industry's fight against the P2P (person to person) sites. Why? Because the Spanish lost," Brafman and Beckstrom write.
The Spanish could not defeat the Apaches because the Apaches, the authors show, were a starfishlike, decentralized organization.
The music industry, of course, is not the only industry that is being hurt or threatened by leaderless, decentralized organizations. The real thrust of "The Starfish and the Spider" is to awaken business and governmental leaders to the fact that they cannot crush their competition for the money and minds of Internet-connected people today by using anti-spider tactics and strategies alone.