Tuesday, November 4, 2008

Thoughts and takeaways from the WorldBlu conference

So I finally have some time to blog about the WorldBlu conference on democratic organizations last month in New York. Other blog posts do a great job of covering the conference details - here, here (where I was quoted), and here (including summaries of each speaker) - so I'm just going to post my own key takeaways and thoughts rather than all my notes. Here are some items I highlighted in my notes:
  • When people don't have a self-governance model, they want a strong directive leader (with the negatives that entails).
  • Democracy needs structure, or power becomes personal.
  • The vast majority of people don't like their jobs (yet rather than recognize this as a symptom of a serious flaw in how we run our organizations, it's simply accepted as "the way things are").
  • More than 80% of managers are poor leaders.
  • 50+% of peoples' time is spent fighting institutional bureaucracies.
  • "First, we shape our structures... and then our structures shape us." -Winston Churchill
  • Results-only work environments (ROWE) are a great step in the right direction.
  • "We long for community, but settle for institutions."
  • Winning companies stand for powerful ideas.
  • Leadership = creating an architecture of participation (not "genius on the mountain")
The reality is that most of the featured organizations were more benevolent autocracies than democracies. One exception is the co-op model, which got a presentation from Equal Exchange and was also recently featured in a Houston Chronicle op-ed. Co-ops are 100% owned by their workers (and, in some cases, their customers). While I see some benefits from the model, I don't think it's "the answer". For one thing, I think most of the world's enterprises need outside equity investment to be financially viable. There also has to be some mechanism for efficiently deploying capital where it's needed, as well as for investors to diversify their investments beyond their own firms to reduce risk.

But I have another issue with the co-op model. They talk about the need for empowerment, control, and trust, but then talk about how their model is like a city government. I don't think people feel all that much control, empowerment, and trust from their city government, so duplicating that model doesn't seem all that helpful. Democracy is better than autocracy, but liberty is even better than democracy (who would you prefer controlling you: dictator, elected leader, or nobody?). Liberty means free markets. How can we get that model inside organizations? (more here: Organization 2.0 briefing)

This leads to my bigger picture issue. Whole Foods CEO John Mackey talks about the damaged brand of capitalism worldwide and the deep unpopularity of big business (not to mention the other big command-and-control organizations: government bureaucracies). A few hundred years ago, scholars and nobles lamented all the bad kings (vs. the few good ones) and wrote about improving monarchies. "How can we get more good, enlightened kings?" But our Founding Fathers saw the futility of articulating principles for a better monarchy. They moved on to a whole new concept, representative democracy, and the rest, as they say, is history. As I attend conferences like WorldBlu and, later this week, Catalyzing Conscious Capitalism, I find myself asking:
Are we just trying to foster more "benevolent monarchies", or are we really moving on to create our equivalent of "democracy": a completely new form of organization that breaks from the old, dysfunctional, command-and-control, hierarchical model?


Rodney North said...

Very interesting post. This is Rodney - the fellow who presented on behalf of Equal Exchange. I think you really nailed it with your suggestion that some of the new models being promoted are often "better monarchies" rather than actual democracies. A good question to determine the degree of institutional democracy is "can one fire their boss?". (That could be your manager, the board, or CEO)
At Equal Exchange and at thousands of other worker co-ops around the world that can and does happen to one degree or another. But in the end the final word is always with the employee-owners.

I think your point that city government might not be an exciting example for businesses to emulate is well taken. I'll have to ask that you take my word that when I offered that it was just a rough metaphor to try to communicate in a few minutes the literal and structural democracy of our firm.
Whereas alot of folks talk about listening to employees, etc, it is rare to actually distribute power on a 1 person/1 vote system and have the firm's leaders (the board - who hires/supervises & fires the CEO)elected by the rank and file.

Also, size matters. You're right to suggest that the formal democracy of a city of, say, 100,000 to 1,000,000 voters can be pretty distant, unengaging, etc. BUT when the democracy is of only 10 to maybe 500 people its a much more intimate, engaged affair. More dynamic and inspiring. There's a critical role for the nature of social relations, and that you can only really know so many people. That mayb be why most worker co-ops sub-divide (like cells) when they approach having 500 worker-owners.
At Equal Exchange we have just 95 worker-owners. So its a pretty tight, face-to-face kind of democracy.

That said, your post led me to read more about your model and, surprise, surprise, I see some exciting ideas for further democratizing even worker co-ops.

Lastly, fyi, co-ops can raise outside investment. For ex, we have taken in $5,000,000 in NON-VOTING outside equity, and have created other mechanism's, like our own Certificate of Deposit, to raise further capital that won't undermine our worker-control.

Tory Gattis said...

Thanks, Rodney. This is very helpful to my understanding of the co-op model, esp. raising capital. And I agree that democracy is much more robust at smaller, more personal sizes.

I'm glad you found some inspiration from my Org 2.0 model. By all means, if you decide to try out some of the concepts, let me know. I'd love to help, or at the very least learn the results. tgattis (at) openteams.com - Thanks!