Organizing P2P organizations

April 7, 2011 — Poor Richard

overlay network
Image via Wikipedia

I probably should have titled this “Hacking the Organization”.

What follows is not a primer of organizational design but simply a back-of-the-envelope sketch of how a number of organizational design and management ideas might be applied to peer-to-peer (P2P) organizations. My intention is for these ideas to be adapted or “hacked” for P2P applications without getting hung up on ideology or terminology, much of which has historical baggage. The idea is to ignore the baggage, take what you can use, and leave the rest. However, if this gets picked apart and criticized from top to bottom it may still have served some purpose.

I recognize that many p2p activities may be amorphous, fluid, informally organized, or conducted by completely autonomous  and independent individuals. My own preferred lifestyle is agrarian and communitarian. I’m not a particularly good team player. But I would like to think of a world where p2p organizations can launch satellites, build solar-powered factories, and make trains run on time.

In The Political Economy of Peer ProductionMichel Bauwens describes peerism as “cooperative individualism”. I think that is an important perspective and I think it can be extended to groups as well. Whether cooperation is one to one, one to many, many to one, or many to many, all cooperators are peers. If they are not peers, the enterprise should not be called cooperation.

In the same paper Bauwens notes that “At present, peer production offers no solution to the material survival of its participants. Therefore, many people inspired by the egalitarian ethos will resort to cooperative production, the social economy, and other schemes from which they can derive an income, while at the same time honoring their values. In this sense, these schemes are complementary.”

Perhaps I am taking a broader approach to peerism than some, but I think peer production and cooperative production are more than complementary. In my mind the concept of a true peer is essential to the concept of true cooperation and vice versa. I know this is not how cooperative production and peer production have always played out historically, but I am hoping that in the future such distinctions may evaporate. Worker cooperatives worthy of the name should become fully p2p organizations.

It is often observed that many worker coops have hierarchical management or that open/free software development projects may have “benevolent dictators” or merit-based hierarchies. How can members of such organizations be said to be “peers”? I think being a peer is most fundamentally based on consent. Ideally, consent to cooperate is freely given and fully informed. But in the real world, consent is a matter of degree. Even under the best of circumstances freedom is constrained by things like personal needs, availability of alternatives, peer pressure, etc., and information is never complete. Nonetheless, we can strive for the highest degree of informed consent for ourselves and for all those peers with whom we cooperate.

The following ideas are directed at maximizing consent and peerism in the context of organizations that are not limited to asynchronous digital production of intellectual goods and services without monetary compensation, but also organizations capable of  physical production of tangible goods and services in every part of the economy, and capable of providing people with financial security and a reasonable level of prosperity. Later in the post I’ll write specifically about an approach to designing very large, global organizations that might capable of dealing with some of our most serious existential crises such as climate change, or the predatory-commercial (or authoritarian-state) enclosure  of our global information and communications (Internet and WWW) infrastructure.

General Design Framework

My favorite framework for analyzing and designing formal organizations consists of five layers:

  1. Values & principles
  2. Goals & objectives
  3. Methods & processes
  4. Organizational structure & relationships
  5. Forms of ownership and distribution of income and assets

This framework could be used for almost any kind of organization from a private, for-profit corporation to a non-profit, charitable foundation or NGO. It is a structured way to analyze or define “what we do, how we do it, why we do it.” In my opinion, it could be very well suited to designing or redesigning peer-to-peer organizations. There is a lot here that lends itself to reverse-engineering existing organizations, too. Some of it may resemble ideas found in the now unpopular business process re-engineering (BPR) framework, but my framework is distinguished from BPR by being a do-it-yourself (DYI) and peer-consensual process.

Although most groups who want to form an organization will have some initial overview of most or all these layers, if each category is analyzed in sequence then each successive layer of the organization is consistent with and solidly supports the layer above.

1. Values and principles. The founding members of an organization can begin by listing, defining and prioritizing their values. It begins with an open process of brainstorming to create a exhaustive list. Then the list can be massaged by consolidating redundant items. Ranking or prioritizing these can then be assisted by creating a “poll” where each member gives each value a 1-10 importance rating. The resulting ranking can be discussed and the poll retaken as often as desired. All this activity can be documented with or without the names of individual participants to begin the historical record and “audit trail” of the organization. Examples of values: justice, fairness, education, creativity, diversity, opportunity, economic security, health, free time, personal growth, community, friendship, loyalty, human rights, dignity, transparency, openness, sharing, cooperation,consensus, sustainability, reliability, recycling, conservation, etc.

2. Goals and objectives. These define the purposes and products of the organization and enable the practice of “management by objectives (MBO).” I use that term here in its plain language, common sense connotation and not in the special sense it has acquired in the world of corporate management doctrine taught to MBA’s. Values and objectives  provide a means to measure success or failure empirically and quantitatively and the means for implementing quality control andcontinuous improvement (concepts well elaborated by W.E. Deming). Goals and objectives can be brainstormed and refined in the same manner as values. In addition, every goal can be rated according to the values that have already been established to further refine priorities. Goals and objectives range from the most general, “mission statement” variety (which might include quantifiable goals like carbon-neutrality, net-zero landfill, etc. ), to general product lines and revenue goals, to extremely specific goals like product specifications, production targets, , etc. One important set of goals explicitly states the ways the organization hopes to enhance the lives of its members. Goals can be further defined and organized as near-mid-long term. One simple way of organizing all these goals is an outline or a series of wiki pages. The wiki platform offers a ready-made way to document all the discussion and revision history and to hyperlink between all the layers of the framework.

3. Methods & processes. “Management by objectives (MBO)” as I use the term has two basic features: 1) a given goal or objective is associated with a project team, and 2) it is generally up to the team to define and mange the resources and methods that are used to achieve the goal. This includes devising the internal structure and self-management methods of the team itself. This is the layer where recursivness and diversity enter the organization. The first two layers have established the universals of the organization; this layer begins differentiating the “species” of project teams that will evolve over time to fit various ecological niches within the organization. The extent to which methods and processes meet the values and goals of the organization will determine their “fitness”. Management by objectives is the organizational equivalent of natural selection. But the difference is that natural selection is all about reproductive success and is otherwise values-neutral, whereas MBO selects for success at explicit, preselected values and goals. This is the opposite of top-down BPR. The MBO that I am describing is agnostic about the internals of any project team and looks only at results. From this perspective, the more mutations, the merrier. In the design stage of an organization, methods and processes will be the prerogative of the organizing members, but this represents only a state of initialization, a starting point for initial project teams. At this stage, the members can only make educated guesses about which methods and processes will best fit the organization’s values and goals. One important category of methods and processes defines the feedback loops between project teams and the methods for transparency and accountability to the organization as a whole. This is includes but is not limited to bookkeeping, quality control, exception handling, conflict resolution, hiring and firing, purchasing, and the interfaces between projects and between the organization and the outside world. All this can again be organized in outline or wiki form.

Deming process for quality control and continuous improvement:

Deming PDCA Cycle

PDCA is a successive cycle which starts off small to test potential effects on processes, but then gradually leads to larger and more targeted change.

Establish the objectives and processes necessary to deliver results in accordance with the expected output. By making the expected output the focus, it differs from other techniques in that the completeness and accuracy of the specification is also part of the improvement.
Implement the new processes. Often on a small scale if possible, to test possible effects.
Measure the new processes and compare the results against the expected results to ascertain any differences.
Analyze the differences to determine their cause. Each will be part of either one or more of the P-D-C-A steps. Determine where to apply changes that will include improvement. When a pass through these four steps does not result in the need to improve, refine the scope to which PDCA is applied until there is a plan that involves improvement.

4. Organizational structure & relationships. This is often poorly matched to values, objectives and methods, which is why it comes at this stage of the design process. At this point the appropriate structure and sub-structures should almost be self-evident. Indeed, the forgoing discussion makes the assumption that the organization will consist of largely autonomous project teams. What I haven’t discussed yet is the idea that some projects will be designed to provide services to other projects. Examples are accounting services, office space or facilities management, information and communication technology, etc. This is analogous to some of the typical departments of traditional organizations, except that they are more autonomous and that most of their services are offered to client projects on a voluntary basis. In other words, production projects can choose to “outsource” such functions either to the appropriate in-house service project (the in-house accounting team, for example), to providers outside the organization, or to handle any or all of these typical tasks within the production project itself. It might also be possible for multiple accounting services or IT teams to exist and compete with each other. This prevents these in-house service projects, such as accounting and IT, from gaining too much power by virtue of exclusive expertise and captive clientele.  This is an example of how checks and balances can be established between autonomous project teams. All these projects are peers. All these projects can mutate or fork.

Below are some organization charts that are compatible with the project approach. Note that the “Management” box in the matrix chart is a project itself. It may be the venue for organization-wide goal setting, scheduling, and certain interactions with the outside world.

Matrix Organization

Matrix organization sheme

A WikiMedia Organization chart:

Wikimedia “Eloquence” Platform

Wikimedia has an excellent gallery of organizational charts, well worth perusing.

One of the best (albeit somewhat dated) introductions to organizational process and structure I know is “The Limits of Organization” by Ken Arrow. He identifies the typical working parts & processes of an organization– things like goal setting and decision making, information flow, accountability, and feedback loops.

5. Forms of ownership. This also is often poorly matched with the organization’s values, objectives and methods. It applies to the organization as a whole as well as to individual projects and to resources and assets that are created, acquired, used, and exchanged within and between projects and between the organization and the outside world. Choices of forms of ownership often reflect the requirements of other entities with which an organization or project will interact. Different projects might choose different forms of internal property ownership and property management.

Michel Bauwens writes in a post on the Next Net discussion group, “One of the key features of peer production is access for use and production without prior permission, and with the control mechanisms moved away from the ‘controlling access’ and ‘controlling work process’ to  ‘controlling quality of the results’…” I agree with this as a general trend and preference within p2p organizations, but there are many kinds of resources that are scarce, exhaustible, or subject to access control even in p2p production scenarios.

Resources like common computer code repositories, design drawings and specs, documents, digital media, etc. are intellectual or creative works that can be shared, copied, reused and repurposed without diminishing the common resource pool. Such resources are placed in the public domain or are licensed under a GNU General Public LicenseCreative Commons copyrightor similar type of commons-oriented ownership.

However, a p2p organization may also purchase or license intellectual or creative works for their own use or for resale that are subject to a more restrictive commercial license or copyright. This could be anything from commercial accounting software or other software applications that limit the number of concurrent users to electronic books or copyrighted documentation and reference materialsIn such cases the organization, its subsidiary project groups, and its individual members must establish and follow appropriate procedures for managing such property according to the terms of its use.

If p2p organizations are to expand from the domain of intellectual and creative production into the wider economy to produce many kinds of tangible goods and servicesthen there are many other kinds of resources which they will need to buy, rent, own, share, sell, trade, and manage.

Purchasing materials, components, and equipment can done by individual project groups or this can be aggregated into special purchasing or supply chain management groups. The ownership and management of resources can be internal to a group or aggregated into various kinds of resource “pools” that are shared by multiple groups.

Property and ownership (like organizational structure) are highly “hackable” or customizable within the existing legal frameworks of most modern nations.

There is a large catalog of “off-the-shelf” forms of organization and ownership as well as exotic forms and infinitely customizable hybrids providing a vast palette of options that can be used to create any organization and manage any kind of resource for any purpose under the sun.

P2P peeps are good at hacking and forking things and in the years to come will spawn many new organizational species.

One thing to consider in choosing a legal form of ownership is that we face an existential threat from predatory special interests that are waging an increasingly well-coordinated war on democratic social and economic institutions, including other businesses. The progressive, egalitarian community faces a radically authoritarian opponent that is hell-bent on establishing a global corporate neofeudalism–a system of private governance and private ownership of all that remains of the commons.

Our problem is how to defend ourselves, our institutions, and our commons against such an enemy and such an assault, without adopting the enemy’s methods or mentality. What kind of self-defensive and counter-offensive methods can we devise that can match the scope, scale, and speed of the enemy’s economic class warfare?


Incorporation has several advantages that make it a common form of business ownership. However, my position is that most corporations have too many advantages that are seldom in the public interest. For details see Tom Hartmann’s book:  Unequal Protection: How Corporations Became “People” – And How You Can Fight Back.

Although corporate law varies in different jurisdictions, there are four core characteristics of the business corporation:

Liability exemptions, perpetual life, corporate personhood, and other corporate advantages should be granted only when those perks or incentives serve to correct some market failure. Otherwise all other forms of business are at a disadvantage. And if all businesses and persons are incorporated, we may as well toss the estate tax, which in my opinion is a necessary and proper tax.

When businesses receive corporate advantages, they should be required to act strictly within narrow charters and should have requirements that unincorporated business don’t–greater transparency for one. Not only should they NOT be legal persons, they should be much LESS than legal persons. They should behave like the publicly-chartered legal fictions that they are.

Disorganization of the peers

The ecosystem of innovation in the techni-capable general public is hugely fertile and productive, but in an emergent,stigmergic, and largely undisciplined piecemeal fashion. Many new species of innovation might be characterized as technology “micro-organisms”, and many are born and die in virtual islands of isolation without passing their “DNA” to other species or generations of technology. The cross-fertilization of innovations and designs is very localized and random. This is not necessarily bad over a vast time frame, but it dramatically slows the evolution of best designs and practices –especially in the “large animal” category of technology platforms.

We could leave the progress of innovation to the invisible hand of “natural selection” by market forces and we would get a slow evolution. But such a “hands-off” approach is not really hands-off at all. Such evolution would be heavily shaped by the existing vested interests and powers. The only innovations that would be allowed to survive would be those that were notdisruptive to the powers that be. How will we organize effectively to stop climate change or stop the corporate take-over of the internet? To balance the influence of the vested special interests we may need large, global organizations  that operate in the public interest.

Various interest groups recognized long ago the need for global institutions and created them. They serve political, commercial, financial, legal, military, economic development, scientific, educational, cultural, public health, philanthropic, and other specific agendas.

There is no comparable global public interest institution, for example, whose agenda is specifically to build our future public global information and communications infrastructure (PGICI), sometimes called The Next Net, including all the layers of hardware and software necessary to provide the entire suite of high-level information and communication services to the end user community.

The non-governmental public-interest organizations I’m suggesting need be no bigger or more complex than a UN, WHO, WTO, IMF, NATO, World Bank, or a multi-national corporation. There are many of these in our modern environment.

The problem is that there is no GLOBAL PUBLIC-INTEREST “BUSINESS” MODEL. I use the term “business model” because it is such as cliche in current public conversation. If we want to understand what really makes an organization succeed or fail we dissect its business model.

For the project of forming an open, transparent, democratic,  global public-interest organization there is no compatible private for-profit business model, and there is no compatible public non-profit business model either. Something like the PGICI is beyond the usual scope of private philanthropy and it is incompatible with governments that place private business interests (profits) above the public interest.

A PGICI would have to be funded by the end users, and it SHOULD BE. But there is thus far no working business model for a crowd-funded public project of such size and scope. Projects of that size and scope are the province of governments and global industries alone, with perhaps a few philanthropic examples in the public health and humanitarian sectors.

Of course the business model is not the only problem. No field-tested organizational model exists, either. So what about a coalition of parties like the W3C,  the Internet Governance Forum (IGF), the UN ICT Task Force , the International Telecommunication Union (ITU), the Free Software Foundation, the Foundation for P2P Alternatives, the OpenNet Initiative, theWikiMedia Foundation, Google, the BBC, and others to design and launch a PGICI umbrella organization. The two big questions are 1) is this a project the public can comprehend and agree on, and 2) does the not-for-profit, non-governmental public sector have the global-enterprise-level entrepreneurial and management abilities to make something like a PGICI happen. Or is that kind of entrepreneurial and management ability strictly a private-sector commodity? If it is the latter, then the capitalists have been right all along and we can’t live without them– so we might as well all shut up and go to our cubicles and behave.

The Large, Massively Complex, Adaptive Organization

“How do we organise ourselves to achieve our…aims? It is an age-old question, with the answer often revolving around two poles of attraction, the centralised cadre versus the decentralised loose network.” *

How should we organize ourselves in the 21st century?

* Harry Halpin and Kay Summer in Turbulence

“[T]here is now a brief window of opportunity – a moment outside ‘normal’ time – where a network of social movements can actively form and radically reshape the world. To do so successfully, future movements must consciously try to avoid two distinct fates: either the dissolution into a decentralised network of loose clusters of relatively isolated groups, movements and individuals – the fate of the summit-hopping phase of the movement of movements – or a decline towards a centralised network of cadres, which severely damaged the movement in the Sixties. Our lines of flight from these dead-ends consist in wilfully pushing ourselves to learn from successful networks and evolve towards a mature distributed network with abundant hubs and a powerful long tail: a movement with both mass participation and dynamic hubs of people and events, capable of evolving and responding rapidly to a fast-changing world. A tall order – perhaps – yet the alternative is bleak indeed.”

My thesis is that both poles of large organization structure–the loose network of diverse individuals, organizations, and movements and the centralized, top-down, hierarchical organization–have strengths and weaknesses. The weaknesses severely limit the attractiveness, effectiveness, or longevity of organizations at either extreme. What is needed is a new model for organizations large enough to address international crises and global development needs but without the weaknesses of either of the old large organizational forms.

I propose a variety of bio-mimetic principles and metaphors with which to design a new model for large, global, non-governmental organizations that are democratic, transparent, and open to mass participation. The new model will achieve stability neither through conflict avoidance nor through central command and control, but through the flexible yet closely coordinated dynamics of complex adaptive systems (CAS).

In what follows I’ll discuss a number of bio-mimetic principles and metaphors for organizational design, but the single most important concept in complex adaptive systems is that the complexity of the network of feedback circuits (e.g. nerves) must be commensurate with the complexity of the functional relationships among all the organization’s internal parts (e.g. cells).

The best biological analog for complex feedback circuits is the neural network. A  neural network is made of a great many individual neurons (nerve cells) each with many cross-connections to other neurons. Although there are many specialized types of neurons and neural networks (just as there are many types of workers and teams in a large organization), most of the types have large numbers of connections with their fellow neurons. A neuron receives feedback from other neurons via itsdendrite  fibers. These have many branches, collectively referred to metaphorically as a dendritic tree. A neuron sends outnerve signals via its axon fibers–cable-like projections that can extend tens, hundreds, or even tens of thousands of times the length of the cell body. Like the dendrites, the axon has many branches, enabling communication with many different target cells. Between the branching dendrite and axon fibers combined, the typical neuron has an average of 7,000 connections to other neurons. Some have many more connections. Can you imagine an individual member of an organization with 7,000 direct, hard-wired connections to other members? This is a lot of very close-coupled, bi-directional feedback.

Two of my favorite authors on organizational design are the Nobel-prize economist Kenneth Arrow (The Limits of Organization) and Edwards Deming, the father of industrial quality control and “continuous improvement.” Both men emphasized the central importance of an organization’s feedback networks to the practical limits on its size and efficiency.

The basic element of a feedback network is a single feedback loop. Each feedback loop of a neuron may involve many other cells, so the possible number of loops is far greater than the 7,000 connections that each individual cell has.

Deming described the generic logic of the basic feedback loop in terms of the PDCA cycle (see details above). PDCA stands for plan. do, check (or study), and act.

A neuron performs analogous feedback steps, with less anthropomorphic labels. However, a single neuron probably has a greater number of such feedback loops than many human organizations. A single mouse brain may have more such loops than the largest human organization on earth. (If we want to talk about collective human intelligence, maybe we need to at least aspire to a feedback network as complex as that of a mouse brain. Deming called his organizational philosophy, BTW, the “System of Profound Knowledge”.)

The point is that organizational failures are most often related to feedback failures–organizational feedback networks tend to be woefully inadequate. So massively complex feedback is the primary bio-mimetic design principle for massively complex, adaptive organizations. One of the best tools we have for implementing complex feedback networks within an organization and between an organization and the world is called a social network.  Social network platforms like facebook or Google +, for all their faults, are easily capable of supporting feedback networks involving hundreds of millions of people. While each neuron might be thought of as having 7,000 neuron “friends,” most humans may only be capable of interacting  with a few hundred in any coherent fashion.

Designing organizations as complex adaptive systems (CAS)

It is often claimed that CASs cannot be intentionally planned or designed–they must be allowed to emerge spontaneously and serendipitously from natural evolution of from a “cloud” of stigmergic activity . Examples of complex, adaptive stigmergic activity are seen in swarming ants and bees, schooling  fish, etc.

IMO this is a one-sided view. CASs can be helped to emerge. Emergence can be intentionally pushed, pulled, and guided. And in the case of the Next Net Ecosystem, I argue that in order to address the scope, scale and speed of various immanent existential threats we MUST assist with the emergence of new ICT infrastructure with new defensive and counter-offensive capabilities. The birth of the Next Net Ecosystem needs skillful and dedicated midwives and husbandmen to bring it safely into this world in a timely manner despite serious obstacles and risk factors.

Examples of planned, designed, and managed CASs and guided emergence include complex gardens, permaculture systems, and forest garden designs, and the design and management of other complex, integrated agricultural and horticultural systems involving mixed ecosystems of plants, animals, humans and natural resources with diverse bioregions andmicroclimates.

Rooms, patios, campuses, and plazas full of master gardeners, permaculture designers, agriculturalists, landscape designers, etc. can and do collaborate on designing, building, and managing complex adaptive systems every day.

They combine systems science with knowledge, experience, and practical skills and apply principles of continuous improvement and quality control to make complex systems progressively healthier and increasingly more robust, productive, and adaptive.

As one small case history of helping a complex adaptive system to emerge far more quickly than would otherwise have been possible without intensive planning, design, and management, consider this personal gardening story:

Living Systems Theory (LST)

Additional bio-mimetic principles and metaphors for the design of large, complex, adaptive organizations can be drawn from the Living Systems Theory of James Grier Miller and others.

In the Wikipedia section below, reference is often made to “self-organizing” systems. In the case of biological organisms and ecosystems there is no single explicit designer or architect. However, all the organisms both inside and outside of an eco-region are co-designers, co-architects, and co-engineers of the ecosystem, despite the fact that their activities may not be intelligently coordinated. A consequence of this lack of intelligent planning and coordination is that adaptation to environmental changes is often slow and, in the short term, clumsy.

If nature succeeds as well as it does without intentional systems analysis and planning, how much better might we succeed at organization and social evolution WITH system science, design, quality control, and continuous improvement methods if those methods are intentionally and carefully applied?

Furthermore, if 500 people got together and designed, planed, and built an organization in an open, transparent, and democratic way , that organization may be said to have been “self-organized”, even if the original 500 people no longer belong to the organization. Thus references to “self-organization” below in no way detract from the application of living systems theory to the creation of large, complex social institutions.

Wikipedia: Living Systems

Living systems are open self-organizing living things that interact with their environment. These systems are maintained by flows of information, energy and matter.

Some scientists have proposed in the last few decades that a general living systems theory is required to explain the nature of life.[1] Such general theory, arising out of the ecological and biological sciences, attempts to map general principles for how all living systems work. Instead of examining phenomena by attempting to break things down into component parts, a general living systems theory explores phenomena in terms of dynamic patterns of the relationships of organisms with their environment.[2]


Living systems theory is a general theory about the existence of all living systems, their structureinteractionbehavior anddevelopment. This work is created by James Grier Miller, which was intended to formalize the concept of life. According to Miller’s original conception as spelled out in his magnum opus Living Systems, a “living system” must contain each of twenty “critical subsystems”, which are defined by their functions and visible in numerous systems, from simple cells to organisms, countries, and societies. In Living Systems Miller provides a detailed look at a number of systems in order of increasing size, and identifies his subsystems in each. Miller considers living systems as a subset of all systems. Below the level of living systems, he defines space and timematter and energyinformation and entropy, levels of organization, and physical and conceptual factors, and above living systems ecological, planetary and solar systems, galaxies, etc.[3]

Living systems according to Parent (1996) are by definition “open self-organizing systems that have the special characteristics of life and interact with their environment. This takes place by means of information and material-energy exchanges. Living systems can be as simple as a single cell or as complex as a supranational organization such as the European Union. Regardless of their complexity, they each depend upon the same essential twenty subsystems (or processes) in order to survive and to continue the propagation of their species or types beyond a single generation”.[4]

Miller said that systems exist at eight “nested” hierarchical levels: cell, organ, organism, group, organization, community, society, and supranational system. At each level, a system invariably comprises twenty critical subsystems, which process matter–energy or information except for the first two, which process both matter–energy and information: reproducer and boundary.

The processors of matter–energy are:

  • ingestor, distributor, converter, producer, storage, extruder, motor, supporter

The processors of information are

  • input transducer, internal transducer, channel and net, timer (added later), decoder, associator, memory, decider, encoder, output transducer.

Miller’s living systems theory

James Grier Miller in 1978 wrote a 1,102-page volume to present his living systems theory. He constructed a general theory of living systems by focusing on concrete systems—nonrandom accumulations of matter–energy in physical space–time organized into interacting, interrelated subsystems or components. Slightly revising the original model a dozen years later, he distinguished eight “nested” hierarchical levels in such complex structures. Each level is “nested” in the sense that each higher level contains the next lower level in a nested fashion.

His central thesis is that the systems in existence at all eight levels are open systems composed of twenty critical subsystems that process inputs, throughputs, and outputs of various forms of matter–energy and information. Two of these subsystems—reproducer and boundary—process both matter–energy and information. Eight of them process only matter–energy. The other ten process information only.

All nature is a continuum. The endless complexity of life is organized into patterns which repeat themselves—theme and variations—at each level of system. These similarities and differences are proper concerns for science. From the ceaseless streaming of protoplasm to the many-vectored activities of supranational systems, there are continuous flows through living systems as they maintain their highly organized steady states.[5]

Topics in living systems theory

Miller’s theory posits that the mutual interrelationship of the components of a system extends across the hierarchical levels. Examples: Cells and organs of a living system thrive on the food the organism obtains from its suprasystem; the member countries of a supranational system reap the benefits accrued from the communal activities to which each one contributes. Miller says that his eclectic theory “ties together past discoveries from many disciplines and provides an outline into which new findings can be fitted”.[7]

Miller says the concepts of space, time, matter, energy, and information are essential to his theory because the living systems exist in space and are made of matter and energy organized by information. Miller’s theory of living systems employs two sorts of spaces: physical or geographical space, and conceptual or abstracted spaces. Time is the fundamental “fourth dimension” of the physical space–time continuum/spiral. Matter is anything that has mass and occupies physical space. Mass and energy are equivalent as one can be converted into the other. Information refers to the degrees of freedom that exist in a given situation to choose among signals, symbols, messages, or patterns to be transmitted.

Other relevant concepts are system, structure, process, type, level, echelon, suprasystem, subsystem, transmissions, and steady state. A system can be conceptual, concrete or abstracted. The structure of a system is the arrangement of the subsystems and their components in three-dimensional space at any point of time. Process, which can be reversible or irreversible, refers to change over time of matter–energy or information in a system. Type defines living systems with similar characteristics. Level is the position in a hierarchy of systems. Many complex living systems, at various levels, are organized into two or more echelons. The suprasystem of any living system is the next higher system in which it is a subsystem or component. The totality of all the structures in a system which carry out a particular process is a subsystem. Transmissions are inputs and outputs in concrete systems. Because living systems are open systems, with continually altering fluxes of matter–energy and information, many of their equilibria are dynamic—situations identified as steady states or flux equilibria.

Miller identifies the comparable matter–energy and information processing critical subsystems. Elaborating on the eight hierarchical levels, he defines society, which constitutes the seventh hierarchy, as “a large, living, concrete system with [community] and lower levels of living systems as subsystems and components”.[8] Society may include small, primitive, totipotential communities; ancient city–states, and kingdoms; as well as modern nation–states and empires that are not supranational systems. Miller provides general descriptions of each of the subsystems that fit all eight levels.

A supranational system, in Miller’s view, “is composed of two or more societies, some or all of whose processes are under the control of a decider that is superordinate to their highest echelons”.[9] However, he contends that no supranational system with all its twenty subsystems under control of its decider exists today. The absence of a supranational decider precludes the existence of a concrete supranational system.

At the supranational system level, Miller’s emphasis is on international organizations, associations, and groups comprising representatives of societies (nation–states). Miller identifies the subsystems at this level to suit this emphasis. Thus, for example, the reproducer is “any multipurpose supranational system which creates a single purpose supranational organization” (p. 914); and the boundary is the “supranational forces, usually located on or near supranational borders, which defend, guard, or police them” (p. 914).

Strengths of Miller’s theory

Not just those specialized in international communication, but all communication science scholars could pay particular attention to the major contributions of living systems theory (LST) to social systems approaches that Bailey[11] has pointed out:

  • The specification of the twenty critical subsystems in any living system.
  • The specification of the eight hierarchical levels of living systems.
  • The emphasis on cross-level analysis and the production of numerous cross-level hypotheses.
  • Cross-subsystem research (e.g., formulation and testing of hypotheses in two or more subsystems at a time).
  • Cross-level, cross-subsystem research.

Bailey says that LST, perhaps the “most integrative” social systems theory, has made many more contributions that may be easily overlooked, such as: providing a detailed analysis of types of systems; making a distinction between concrete and abstracted systems; discussion of physical space and time; placing emphasis on information processing; providing an analysis of entropy; recognition of totipotential systems, and partipotential systems; providing an innovative approach to the structure–process issue; and introducing the concept of joint subsystem—a subsystem that belongs to two systems simultaneously; of dispersal—lateral, outward, upward, and downward; of inclusion—inclusion of something from the environment that is not part of the system; of artifact—an animal-made or human-made inclusion; of adjustment process, which combats stress in a system; and of critical subsystems, which carry out processes that all living systems need to survive.[12]

LST’s analysis of the twenty interacting subsystems, Bailey adds, clearly distinguishing between matter–energy-processing and information-processing, as well as LST’s analysis of the eight interrelated system levels, enables us to understand how social systems are linked to biological systems. LST also analyzes the irregularities or “organizational pathologies” of systems functioning (e.g., system stress and strain, feedback irregularities, information–input overload). It explicates the role of entropy in social research while it equates negentropy with information and order. It emphasizes both structure and process, as well as their interrelations.[13]

See also


Additional Bio-mimetic ideas

Additional principles and metaphors for the biomimetic design of large, complex organizations can be taken from recursivefractal geometries and from some of the concepts of object-oriented programming.

Object-oriented programming techniques include features such as:

(See more resources on bio-mimetics and complex adaptive systems below)

Poor Richard

Related subjects and resources:

PERT chart for a project with five milestones (10 through 50) and six activities (A through F). The project has two critical paths: activities B and C, or A, D, and F – giving a minimum project time of 7 months with fast tracking. Activity E is sub-critical, and has a float of 2 months. (Wikipedia)

Gantt Chart with critical path

Resources to help extend the application of biological metaphors and Complex Adaptive Systems (CAS) to organizations


Excerpt from Replacing systems management with complex responsive processes in peer to peer work environments (P2P Foundation blog)

Break Free from Our Systems Prison

Implications of Complex Responsive Process Management Thinking

preDraft version for UKSCS conference 2010– not for republication.

Please acknowledge source if you quote.

Bob Cannell FCIPD

This paper is an argument for application of CRP thinking to practical management learning. It attempts to show why CRP is a radically new ‘take’ on the theory of organisational management and why it is better suited to democratic and participative organisational environments.


Some examples will illustrate this problem. Worker cooperative members can design their working arrangements any way they wish. Suma is the largest worker cooperative in the UK and was described as one of the two most radical employers in Europe by the former director of Co-operatives Europe.

Suma members for example have collectively decided they want to choose their work colleagues democratically, to multi-skill and undertake multiple jobs in the course of a week (job-rotation), to work how and when they want and to have strictly equal pay rates for all Suma workers. But all of these eminently egalitarian and reasonable wishes, the operations and criteria of which are worked out in the present in active conversation, is in conflict with employment legislation and an employment culture which assumes a prescriptive and systematic relationship between employer and employee.

Suma principle Conflictual Employment Legislation
To be able to choose who you work with The Employment Rights Act 1996 gives employees rights whereby worker cooperatives can be sued for unfair dismissal for democratically deciding to terminate the employment of someone they do not wish to work with , and further punished for democratically refusing to reinstate.The abstract systematic rights of employees in the ERA take precedent over the human relationship processes.
To choose your own management Employment Tribunals and Trade Unions interpret the ERA as requiring a specific authoritative decisiontaker, a senior manager, for all decisions about the application of the ERA.Operating management as a function of a collective, as many worker coops do, not as a status attached to individuals, is therefore tantamount to an unauthorised decision.The reified idealised system of hierarchical authority is considered to exist whilst the real interacting processes of network governance relationships are discounted as false.Tribunals and Trade Unions will demand to know ‘who precisely is in charge’ and the worker cooperative has to present some individual to speak on their behalf, e.g. their personnel officer, even though that person does not have the executive authority demanded.
To choose the jobs you want to do Worker cooperatives tend towards multi-skilling and job rotation. It is therefore difficult to prove lack of capability when employment legislation assumes employees are hired for a specific job i.e. that the contractual terms (a hypothesised system) take precedent over real and existing relationships between colleagues.
To work the way you want Worker cooperative members around the world, tend to want a multi-skilled portfolio of duties, characterised by flexibility and self-initiative within a self regulating network of relationships in the workplace.The Health and Safety at Work Act and all subsequent H&S legislation (especially the Management of Health and Safety at Work Regulations) require a specific, narrow, prescriptive bureaucratic system of rules and procedures which must be imposed by a system controller.
Worker owned businesses require safe principles of working (managed in practice by responsive complex processes of relating). H&S orthodoxy requires ‘safe systems of work’ enforced by disciplinary procedures against non-compliant operatives.
To work when you want Executives and senior managers with autonomous decisionmaking powers are exempt from the Working Time Regulations. Hourly paid worker cooperative owner managers are not.It is an offence for a worker cooperative to permit its member employees to breach the WTR even though they own and control their business in contrast to the salaried executive who may be a small cog in a big corporate.The self-regulating nature of an existing complex responsive network of mutually dependent relationships in an equal status collective is discounted in favour of a system of bureaucratic controls which assumes the existence of a hypothetical external controller of a reified ‘as if’ system model.
Equal pay rates for all workers Equal net pay is a common ideal of worker owned businesses. The Part Time Workers Equal Treatment regulations’ if enforced by Tribunal order, effectively prevent equal net pay rates between part and full time workers.

It is possible to assess common management techniques for their basic underlying assumptions. Most of these have been designed pragmatically without consideration of the underlying philosophical assumptions; CRP based or Systems model based.

Systems based techniques will not be easy to use or just ineffective in an organisation which lacks arbitrary management authority, the ability to require subordinates to JEDI (just effing do it). CRP friendly techniques would be a better choice of tool in organisations where consensual agreement is required for proposed change to take place.

Technique CRP friendly Systems assumption Comment
Project Management Agile school PRINCE2 and other waterfall methods Agile is emergent. P2 is predictive.
Communications Receiver based, On demand. Network. web2 Broadcast , published, web1 Interaction (conversation) vs Transmit (control)
Employer Branding Employee engagement program Employee satisfaction survey Engage vs Study
Training Interactive group self-learning Cascade, classroom
Strategic management schools Emergent, evolutionary, contingent methods Ancoff, strategic choice, any predictive methods
Financial management Management by margin(Beyond Budgetting model) Management by objectives
(financial business planning)Budgeting
Guide vs goal seeking cybernetics
HRM Human Relations Management Human Resource Management Relationships vs units of resource (which are a reified myth anyway)
Operational management Self-management, cooperative teams,High Initiative Operations,management as function Taylorism, team leadership,management as status Enforced conversation vs repressed conversation
Organisational Development Vertical integration and segmentation,matrix/networkFlat hierarchy Horizontal integration and silos,pyramid hierarchy Vertical requires real time communications , horizontal merely business information processing
Leadership theory Open leadershipservant leaderfacilitation Great man theorycelebritychief executive cult CRP vs. external controller of system
Business Information Open Books Need to know Open Books enables complex responsive relating by human participants. Need to know restricts behaviour, participants to that of operatives.
Theory of the firm cooperatives hierarchies
Change management CRP Business process Re-engineering , Value Chain Analysis
Culture People & customers focussed Finance, operations, marketing dominated Responsive human Relationships vs things
Marketing Active marketing Passive marketing Customer relationship management vs systematic marketing campign
Visioning Appreciative Inquiry Future search AI focusses on interpersonal relationships. Future search on ‘wants’ and posits an ideal future towards which a cybernetic systematic approach is possible
Quality standards Investors in People? ISO9000 etc. TQM, 6sigma, EFQM etc. are largely systems based but with CRP elements

4 thoughts on “Organizing P2P organizations

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