Blackbeard's Lessons on Management

via The New Yorker: "“The Republic of Pirates,” a new book by Colin Woodard, make clear, pirate ships limited the power of captains and guaranteed crew members a say in the ship’s affairs. The surprising thing is that, even with this untraditional power structure, pirates were, in Leeson’s words, among “the most sophisticated and successful criminal organizations in history.”"

Leeson is fascinated by pirates because they flourished outside the state—and, therefore, outside the law. They could not count on higher authorities to insure that people would live up to promises or obey rules.

[P]irate ships developed models that in many ways anticipated those of later Western democracies. First, pirates adopted a system of divided and limited power. Captains had total authority during battle, when debate and disagreement were likely to be both inefficient and dangerous. Outside of battle, the quartermaster, not the captain, was in charge. On most ships, the distribution of booty was set down in writing, and it was relatively equal; pirate captains often received only twice as many shares as crewmen. (Woodward writes that Privateer captains typically received fourteen times as much loot as crewmen.) The most powerful check on captains and quartermasters was that they did not hold their positions by natural right or blood or success in combat; the crew elected them and could depose them. And when questions arose about the rules that governed behavior on board, interpretation was left not to the captain but to a jury of crewmen.

[T]here is an abiding fear among executives and management theorists alike that moving too far beyond traditional top-down models, or putting too many restrictions on C.E.O. authority, will ultimately lead to inefficiencies and chaos. In that sense, pirate governance, peculiar as it may sound, offers an intriguing example of how limits on executive power can actually make an enterprise more successful and, because workers are convinced they’re being treated fairly, can deepen their commitment.