Let's dig into the topic of what is (and is not) governance.

Quick recap: when I talk about governance of DAOs, I am talking about value and how we maximize it. It's not just committees, it's not just voting, and it's not just money. While those may all be involved in governance at some point, I mean value in its broadest sense - what a person or group of people regard as important.

There's an old saw in the traditional leadership space that management is about doing things right, while leadership is about doing things right. It's trite, yet really useful to apply to the concept of governance

ISACA's COBIT framework (where we got BCR from) includes five key principles, and one of the five is the separation of governance and management. If we swap the word leadership for governance, we have a useful heuristic for the difference between them. Here's a good blog post for folks that want to dig into the mechanics of this a bit more.

In Promise Theory language, governance says "We promise these are the right things to do to manifest our adventure-vision". Management says "We promise we are doing these things right to manifest our adventure-vision"

Pod structures seems like an ideal vehicle for facilitating governance. Pods would be distributed throughout a DAO in order to support the monitoring of the benefits, resource costs, and risks. This information is used to evaluate the environment and what changes need to be made, in order to direct changes that will further progress towards the adventure-vision

Pods would then be supplemented by whatever mechanisms are needed to facilitate the day-to-day management of the DAO. There is a wide variety of stuff that needs to be done, and this is where the ecosystem of web3 holds a lot of potential. Composability means we should be able to easily find the right tool for the job, use it only for as long as it is valuable, and swap out tools if better ones come along.

This separation helps us address what strikes me as being a major flaw in how many DAOs are organized today. Most DAOs do not appear to distinguish between governance and management at all. As a result, we end up with some DAOs being paralyzed by lack of participation, while others are usurped by interlopers to do things that a large portion of participants find abhorrent.

Having a cleaner separation of governance and management is essential for reducing these risks. If we use the Landry approach for decision process, the governing body has a clear mechanism for assigning management of a project or capability to a single leader via consensus, that can be revoked by democratic vote at any time

The governing body promises a set of resources, a level of risk tolerance that the leader is free to work within as they see fit, and what results will be deemed beneficial. The leader in return promises to be accountable for delivering results with value to the DAO, minimal resource waste, high quality, and compliance to the DAO's ways of working and risk appetite.

When these promises are accepted, we have the conditions for success. The leader of the effort (and anyone they recruit to support it) can focus on getting things done, and the governing body can let them do so while still having the ability to act when needed. People need predictability, and splitting things along these lines helps to create that predictability while allowing us to refine what we do quickly

So this poses the question of how this scheme fits with the ethos of "ownership" that is inherent in a DAO. I don't see a conflict.

If a DAO has defined their vision/role/mission/goal (VRMG) stack, newcomers to the DAO have a straightforward way to evaluate how compatible the DAO is with their personal values.

• If they don't agree with the adventure-vision, we'd rather they go elsewhere since a key idea in VRMG is that the adventure-vision doesn't change, so their involvement won't help anyone in the long term.

• If they agree with the adventure-vision, but want to play a role, fulfill a mission, or act on a goal that the DAO doesn't want to play, then they should either seek a DAO that accommodates that, or start one of their own. That's good for everyone, because the hallmark of a good adventure-vision is that it's bigger than the DAO, so we welcome others that will help us bring it to life. The original DAO can coordinate as needed towards that adventure-vision with the new DAO, which maximizes value delivered against the adventure-vision, which by definition is good governance!

• If they agree with the adventure-vision, the role(s), the mission(s), and the goal(s) then we want to get them involved in the DAO. They can quickly jump into management activities once they are oriented to what the DAO is doing. The DAO promises to provide some sort of compensation (which could be intrinsic or extrinsic) for actions that support the VRMG, while the newcomer promises to act in accordance with the VRMG and in line with the appointed leaders for management activities. Then the newcomer produces results (for which they should be compensated in some manner) and provides feedback on the DAO's progress towards its adventure-vision.

For many participants, producing results and providing feedback is all the level of participation in governance that they want to deliver. There's nothing wrong with that! As long as they are comfortable with the DAO's VRMG proposition and their compensation for it, and the DAO is comfortable that it is getting value for the compensation delivered, we are in an optimal state.

Inevitably, though, there will be divergences. That is when we want to get that person more directly involved in governance. This can start with raising awareness of perceived divergence between the adventure-vision and reality. We want to reward this behavior based on the amount of signal vs noise generated. (This is one of the reasons why there is a prediction market to aid this in the playbook.)

When those heavily involved in governance identify folks with a high signal-to-noise ratio, they should start to include them in evaluation activities to get their input on relevant decisions. Do those folks see the situation clearly? Can they identify useful options for making things better? Do they see what criteria are most relevant for deciding what to do? Can they create sound recommendations?

As people demonstrate effective skill in evaluation, we want to reward that as well. As they build a reputation for good evaluation, we will reach a point where we want to start granting them decision making power. That is the point where we would make them a member of a pod and include them in the Landry approach for that pod.

So with this approach, we appear to have a useful framework for marketing DAO membership.

• We promote the VRMG through channels that are most likely to reach people whose values overlap the DAO's.

• We educate them on the VRMG and determine if there are differences that may warrant discouraging involvement in the DAO, redirecting them to another DAO, or encouraging them to start their own DAO in line with the adventure-vision.

• We then onboard them into DAO management activities and educate them on how to surface issues and concerns so they are visible to the governance mechanism.

• As we identify folks that generate high signal to noise in their issues/concerns, we bring them further into evaluation activities. When it's clear that the DAO's decisions would improve with their involvement, we then bring them formally into the governance structure.

If we do this well, we have alignment from everyone involved with the DAO, and appropriate levels of involvement to improve our governance. Maximum benefits we care about, while minimizing the resources required and the risks of doing so. Which, again, is the hallmark of good governance.

** This post is heavily based on a series of messages I originally posted in the Orca Protocol Discord server on 2021-11-13, with modifications to address feedback raised, improve clarity and reflect (hopefully!) improved thinking since then. Thanks to all in the Orca Protocol (now Metropolis) community who provided input, feedback, and support regarding these concepts.

Let's dig into the topic of what is (and is not) governance.

Quick recap: when I talk about governance of DAOs, I am talking about value and how we maximize it. It's not just committees, it's not just voting, and it's not just money. While those may all be involved in governance at some point, I mean value in its broadest sense - what a person or group of people regard as important.

There's an old saw in the traditional leadership space that management is about doing things right, while leadership is about doing things right. It's trite, yet really useful to apply to the concept of governance

ISACA's COBIT framework (where we got BCR from) includes five key principles, and one of the five is the separation of governance and management. If we swap the word leadership for governance, we have a useful heuristic for the difference between them. Here's a good blog post for folks that want to dig into the mechanics of this a bit more.

In Promise Theory language, governance says "We promise these are the right things to do to manifest our adventure-vision". Management says "We promise we are doing these things right to manifest our adventure-vision"

Pod structures seems like an ideal vehicle for facilitating governance. Pods would be distributed throughout a DAO in order to support the monitoring of the benefits, resource costs, and risks. This information is used to evaluate the environment and what changes need to be made, in order to direct changes that will further progress towards the adventure-vision

Pods would then be supplemented by whatever mechanisms are needed to facilitate the day-to-day management of the DAO. There is a wide variety of stuff that needs to be done, and this is where the ecosystem of web3 holds a lot of potential. Composability means we should be able to easily find the right tool for the job, use it only for as long as it is valuable, and swap out tools if better ones come along.

This separation helps us address what strikes me as being a major flaw in how many DAOs are organized today. Most DAOs do not appear to distinguish between governance and management at all. As a result, we end up with some DAOs being paralyzed by lack of participation, while others are usurped by interlopers to do things that a large portion of participants find abhorrent.

Having a cleaner separation of governance and management is essential for reducing these risks. If we use the Landry approach for decision process, the governing body has a clear mechanism for assigning management of a project or capability to a single leader via consensus, that can be revoked by democratic vote at any time

The governing body promises a set of resources, a level of risk tolerance that the leader is free to work within as they see fit, and what results will be deemed beneficial. The leader in return promises to be accountable for delivering results with value to the DAO, minimal resource waste, high quality, and compliance to the DAO's ways of working and risk appetite.

When these promises are accepted, we have the conditions for success. The leader of the effort (and anyone they recruit to support it) can focus on getting things done, and the governing body can let them do so while still having the ability to act when needed. People need predictability, and splitting things along these lines helps to create that predictability while allowing us to refine what we do quickly

So this poses the question of how this scheme fits with the ethos of "ownership" that is inherent in a DAO. I don't see a conflict.

If a DAO has defined their vision/role/mission/goal (VRMG) stack, newcomers to the DAO have a straightforward way to evaluate how compatible the DAO is with their personal values.

• If they don't agree with the adventure-vision, we'd rather they go elsewhere since a key idea in VRMG is that the adventure-vision doesn't change, so their involvement won't help anyone in the long term.

• If they agree with the adventure-vision, but want to play a role, fulfill a mission, or act on a goal that the DAO doesn't want to play, then they should either seek a DAO that accommodates that, or start one of their own. That's good for everyone, because the hallmark of a good adventure-vision is that it's bigger than the DAO, so we welcome others that will help us bring it to life. The original DAO can coordinate as needed towards that adventure-vision with the new DAO, which maximizes value delivered against the adventure-vision, which by definition is good governance!

• If they agree with the adventure-vision, the role(s), the mission(s), and the goal(s) then we want to get them involved in the DAO. They can quickly jump into management activities once they are oriented to what the DAO is doing. The DAO promises to provide some sort of compensation (which could be intrinsic or extrinsic) for actions that support the VRMG, while the newcomer promises to act in accordance with the VRMG and in line with the appointed leaders for management activities. Then the newcomer produces results (for which they should be compensated in some manner) and provides feedback on the DAO's progress towards its adventure-vision.

For many participants, producing results and providing feedback is all the level of participation in governance that they want to deliver. There's nothing wrong with that! As long as they are comfortable with the DAO's VRMG proposition and their compensation for it, and the DAO is comfortable that it is getting value for the compensation delivered, we are in an optimal state.

Inevitably, though, there will be divergences. That is when we want to get that person more directly involved in governance. This can start with raising awareness of perceived divergence between the adventure-vision and reality. We want to reward this behavior based on the amount of signal vs noise generated. (This is one of the reasons why there is a prediction market to aid this in the playbook.)

When those heavily involved in governance identify folks with a high signal-to-noise ratio, they should start to include them in evaluation activities to get their input on relevant decisions. Do those folks see the situation clearly? Can they identify useful options for making things better? Do they see what criteria are most relevant for deciding what to do? Can they create sound recommendations?

As people demonstrate effective skill in evaluation, we want to reward that as well. As they build a reputation for good evaluation, we will reach a point where we want to start granting them decision making power. That is the point where we would make them a member of a pod and include them in the Landry approach for that pod.

So with this approach, we appear to have a useful framework for marketing DAO membership.

• We promote the VRMG through channels that are most likely to reach people whose values overlap the DAO's.

• We educate them on the VRMG and determine if there are differences that may warrant discouraging involvement in the DAO, redirecting them to another DAO, or encouraging them to start their own DAO in line with the adventure-vision.

• We then onboard them into DAO management activities and educate them on how to surface issues and concerns so they are visible to the governance mechanism.

• As we identify folks that generate high signal to noise in their issues/concerns, we bring them further into evaluation activities. When it's clear that the DAO's decisions would improve with their involvement, we then bring them formally into the governance structure.

If we do this well, we have alignment from everyone involved with the DAO, and appropriate levels of involvement to improve our governance. Maximum benefits we care about, while minimizing the resources required and the risks of doing so. Which, again, is the hallmark of good governance.

** This post is heavily based on a series of messages I originally posted in the Orca Protocol Discord server on 2021-11-13, with modifications to address feedback raised, improve clarity and reflect (hopefully!) improved thinking since then. Thanks to all in the Orca Protocol (now Metropolis) community who provided input, feedback, and support regarding these concepts.