In the wake of the crypto boom, we witnessed the rise of a new kind of organization: the DAO, or Decentralized Autonomous Organization. For a moment, it felt like the future of management had arrived. Flat hierarchies, community ownership, collective decision-making—ideologically, it felt like a rebuke to the top-down structures of old. Yet, several years on, it’s hard to name a single DAO that has scaled sustainably, much less successfully.
The failure here may be less about execution and more about a fundamental confusion: a conflation of the macro and the micro.
Decentralization as a Macro Strategy
At a macro level, decentralization makes a great deal of sense. It enables flexibility, resilience, and autonomy. Institutions that operate at national or global scale—governments, regulatory bodies, international corporations—often benefit from decentralized structures that allow for local decision-making and context-sensitive execution. In fact, many large and successful organizations embrace a decentralized macro design.
Visa is a canonical example. Originally structured under Dee Hock’s leadership, Visa was conceived as a decentralized system—a chaotic web of issuing and acquiring banks, member institutions, and processors, all coordinated under a common brand and standards body. Its success wasn’t in spite of that chaos but because of it. The structure allowed Visa to scale across the globe, adapt to regional differences, and avoid the bottlenecks of centralized control.
Mastercard followed a similar pattern, and so have other massive, network-based companies. But here’s the catch: even in these organizations, success came from clarity of ownership and decision-making at the micro level.
The Power of Centralized Micro Systems
When it comes to execution—especially in startups or teams building new products—radical ownership is essential. That usually means centralization. One person or a small group must be accountable. Decisions must move fast. Trade-offs must be made. Committees rarely deliver world-changing products.
Look at Apple. Steve Jobs was infamous for his control over the details, from design to marketing. Under Tim Cook, Apple has retained that centralized ethos in product development. Amazon, too, with Jeff Bezos’s relentless focus on customer obsession and operational excellence, succeeded not by distributing decisions across thousands of voices, but by maintaining strong, centralized leadership with a clear vision.
Even companies that once leaned into more democratic ideals of product building are turning inward. Brian Chesky of Airbnb recently announced that all major product decisions now flow through him. That’s not a bug—it’s a feature. It’s what happens when companies mature and realize that great product requires great taste, and great taste is rarely arrived at by consensus.
The DAO Problem
DAOs, for all their promise, often lack this principle. By design, they distribute ownership, decision-making, and accountability to the “community.” But the result is too often paralysis, or worse: incoherence. Without a clear leader, without someone empowered to say “no,” DAOs drift. Some have become glorified message boards with a treasury. Others burn out in factional infighting. The few that survive do so only by reintroducing—ironically—centralized leadership structures.
Decentralization for its own sake is short-sighted. It prioritizes ideology over outcomes. Go back to first principles: Adam Smith in The Wealth of Nations argued that ownership—of land, labor, capital—is what drives productivity. Organizations work in much the same way. Ownership drives alignment. Alignment drives speed. Speed wins.
Where Decentralization Does Belong
This isn’t to say decentralization has no place. In fact, it is vital—just not where most people want to put it. On a macro scale, decentralization protects freedoms, safeguards institutions, and creates space for innovation. It gives countries sovereignty. It gives citizens liberty. And yes, it allows large organizations to be flexible at the edges.
But zoom in, and the picture changes. At the team level, the department level, the product level, you need clarity. You need ownership. You need centralization.
Because when everyone is responsible, no one is.
And as the saying goes: a camel is a horse designed by committee.
George Payne 