Six Key Interactions for a Thriving DAO

We spend most of our lives in teams and organizations. And anyone who’s ever led one has spent dozens if not hundreds of hours wondering: How do I make it great? What will enable us to do great work together and adapt quickly when a challenge comes our way? How do I keep the community happy and engaged?

Historically, most advice on organizations has originated from observing 'good’ teams and contrasting them with ‘bad’ teams. Naturally, that approach leads to generalizations about how successful teams look, but not necessarily to an understanding of why they look that way, or what it takes to go from ‘bad’ to ‘good’.

Thankfully, Web3 gives us an excellent opportunity to think from first principles, so today we’re taking it beyond buzzwords like accountability or psychological safety. Instead, I’ll give you a framework you can use with any DAO to understand where to focus your attention.

Interactions Make or Break a DAO

The old adage that we're the sum of the five people we spend the most time with is thrown around a lot these days. But even in Web3 - we still live in a cult of star performers.

A few years ago, three Harvard professors realized that - for all the hype - there were very few studies on star performers over time. Committed to changing that, they tracked high-flying CEOs, researchers and software developers, as well as leading professionals in investment banking, PR, management consulting and the law. And what they found was that the top performers in all these groups were more like comets than stars. Blazing successes, until they left one company for another and quickly fizzled out.

For all the merits of these talented individuals, it would appear that the team and community that surrounded them were vital for their success.

Another Harvard professor, J.R. Hackman, concluded that team design and structure account for 60% of team performance. A consistent finding across fields as varied as intelligence agencies, classical orchestras and technology companies.

What it comes down to is that an organization's success isn’t determined by the strengths of its people as individuals, but by the way these people communicate and collaborate. DAO founders have often forgotten this lesson, leading to more than one community splitting and contributors leaving on mase.
More than anywhere else, in DAOs, the role of a leader is simply to create an organization that enables the most valuable interactions in a community.

The Most Valuable Interactions

This past decade, the question I’ve been toiling over is  Which interactions create the most value for an organization? The pursuit of an answer has taken me deep into systems theory, self-management, creativity and behavioral science. It’s taken me from the heat of Michelin starred restaurants to decentralized digital cooperatives, FTSE 100 corporations, and numerous DAOs. And what I got it boiled down to is this:

Six key interactions make or break an organization, especially a decentralized one.

Six Key Interactions to Master in DAOs

So you want a DAO that delivers excellent work, makes the best use of its resources, attracts troves of talent and moves forward with its entire ecosystem. A DAO that comes together in the face of a crisis, rather than falling apart. A DAO that continuously evolves itself.

You might be close to your ideal or far from it; it doesn’t matter. What matters is setting the conditions to learn and improve, picking momentum along the way. These Six Key Interactions (SKIs) are what it takes to make this flywheel turn, moving your people towards a (re)generative flywheel.

The SKIs revolve around six areas of questioning that your DAO (and every team within it) seeks to address:

1. Identity:  Who are we, and what needs do we exist to serve?
2. Future:  How will we evolve to meet those needs, given how our environment is evolving?
3. Change:  How do we transform to move from here to that future?
4. Coordination:  How do we harmonize our work?
5. Operations:  What are we doing every day to deliver our value to our stakeholders?
6. Support:  How do we make it possible for every person to give their best, sustainably?

Identity

Identity Interactions explore questions like:

• Who do we exist to serve?
• Why do we come together?
• Who are we at our core?

It’s also the domain of culture, ethics, values and beliefs, and sets the bedrock for collaboration.

Identity Interactions use rituals, stories and slogans (like a list of values or the team’s origin story) to bring the team together, strengthen relationships and create a shared identity. Exploring, distilling and embodying that shared identity is what enables a team to go beyond transactional relationships and foster a sense of community, belonging and deep commitment.

But perhaps most importantly, it’s having this solid sense of identity that enables a team to change, confident in the knowledge that what matters most will always remain at the core of their work. Identity Interactions provide safety and continuity in a context of rapid change.

Btw, we developed a framework called The Guiding Question to improve upon Mission and Purpose Statements in defining a DAO’s Identity.

Future

Future Interactions seek to answer questions like:

• How is our environment evolving?
• What is our vision for the future?
• What new possibilities should we explore?

These Interactions are where you search for new opportunities to disrupt, innovate and experiment. It’s about looking for weak signals to see what’s emerging in the DAO’s environment, noticing trends, and using these trends to understand how the DAO needs to position itself to thrive and continue to thrive.

By definition, Future Interactions are an exercise in engaging with uncertainty. They require ambition, creativity and speculation. But since our human tendencies leave us prone to confirmation bias and numerous other errors of judgment, effective Future Interactions include a balance of playful ideation and rigorous experimentation — both the dreamer and the pragmatist.

Above all else, these Interactions instill the DAO with an energizing sense of possibility. They align individual efforts towards a shared destination. They make the impossible possible.

Change

Change Interactions tackle questions like:

• How do we bridge the gap between the now and the future?
• Which of the multiple paths do we choose?
• How do we transform ourselves as a team?
• And - more traditionally - what’s our strategy?

These Interactions are all about prioritization and transformation — a ripe environment for learning and growth... and also discomfort. Change is fundamentally about letting go and embracing the new or - more poetically - about death and rebirth. After all, constant renewal is the essence of life.

Healthy Change Interactions happen when we can balance structure and flexibility, enabling enough discomfort to grow but not so much that we break. In more pragmatic terms, Change includes:

1. High-level strategy that sets the DAO’s focus on a few specific initiatives, and any subsequent work to enable said initiatives.
2. Emergent change, where decisions at the edges lead to multiple small shifts, and over time these trickle up to bigger transformations.

Sustaining a healthy capacity for Change Interactions means empowering contributors to make both big decisions and small decisions ‘at the edges’ (locally, in their teams or sub-DAOs). Cultivating both enables a DAO to adapt rapidly and effectively in the face of external change, because teams can move autonomously rather than waiting on approval from the whole community. Both give contributors a sense of agency, adding to their satisfaction and motivation, and enabling them to use detailed knowledge of their own situation, skills, and preferences to improve outcomes for customers and other stakeholders.

Coordination

Coordination Interactions handle questions like:

• How do we communicate within our team and between teams?
• How and where do we store knowledge and information?
• What standards and procedures should we observe?
• How do we mitigate and resolve conflicts?

Coordination Interactions are the organizational lubricant. Just as a traffic light helps prevent clashes between cars, these interactions prevent clashes between people and teams, especially when everyone is moving fast.

There are three parts to this work:

1. Designing Coordination: Defining how you and your fellow contributors will coordinate your work, such as choosing your project management tool or discussing a common standard for using the DAO’s comms channels.
2. Doing Coordination:  Think updating your Kanban board, planning your sprints, having your daily stand-up or weekly project meeting, or telling your team about delays.
3. Resolving Problems:  Getting it back on track when shit hits the fan—for example, mediating interpersonal conflict or clarifying roles when gaps and overlaps are problematic. And, of course, taking actions to prevent it, like engaging a facilitator and coach in healthy relationships. 

Operations

Ops Interactions deal with questions like:

• What needs to happen every day to deliver value to our community?
• How can we do what we do effectively?
• How do we consistently deliver high quality?

These Interactions cover all the little tasks and processes that make up the DAO’s everyday operations - the things you need to do to deliver the products or services you’re responsible for.

Ops is about doing the work, like responding to a customer query, making a sale, coding software, attracting contributors, and all the core tasks of each department. It's also about discussing the work, for example, talking to your colleagues about how to respond to said query, giving feedback on their work, or asking a senior contributor for advice. These Interactions encompass production, continuous improvement, mentoring and quality control.

Ops Interactions are often grouped by functional expertise - your traditional Finance, Marketing or HR departments. But you can also find Operations grouped around product features or geographical regions, or even split into sub-DAOs that sell services to one another within the organization.

Support

Support Interactions create space for questions like:

• What do you need so you can fully contribute to the team?
• How can the team support your physical, emotional and intellectual well-being?

While the first five Interactions look at the DAO as a whole, Support is all about hearing and serving the needs of each individual. Support is the domain of well-being, coaching and career development.

These Interactions invite you to see your people as people, and recognize the impact of work on their (mental) health and well-being. Support is vital because it enables people to do their best work, and makes them feel valued, seen and appreciated. In turn, these contribute to a sense of safety that is necessary for innovation, deep collaboration and real accountability.

In essence, Support Interactions enable your community to contribute their best in all the other Interactions.

The SKIs as a journey

Although I have explained them one by one, the Six Key Interactions are mutually reinforcing. We need to sustain them in tandem, which also means barriers in one type of Interaction are likely to lead to issues in the others. But don’t let this demotivate you. Sustaining all Six Interactions is a tall order, and no organization is ever perfect. So rather than aim for perfection, what the SKIs enable is focusing your and your community’s attention on what matters most: creating the conditions for regeneration, for learning and improving every day, for becoming better at contributing to your own well-being and that of your community.

So whenever you find yourself wondering how to move your DAO forward, ask yourself: What‘s the best way for us, in our unique situation, to have these Six Key Interactions?

Special thanks to Rebecca Collins for her supper valuable contributions framing the importance of conflict resolution (and especially conflict prevention) in Coordination Interactions and the transformative power of Support Interactions, as well as editing this article.

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