WorldBlu announces Most Democratic Workplaces 2009

Their list is not about "democratic" companies in the "everybody votes" sense, but those that truly empower employees at all levels.

"The purpose of the WorldBlu List is to acknowledge the most successful organizations in the world that are choosing to operate, not using the traditional, command and control model of business, but a democratic model based freedom and possibility.

In these challenging economic times, nothing could be more relevant than honoring organizations built on transparency, accountability, integrity, and fairness that give us all a reason to believe that business can truly uphold and model humanity's highest values."

The list proves that these principles are not just theoretical, but work in real organizations in the real world. Check it out.

BNET on business democracies

Geoffrey James at BNET has an interesting post on whether businesses should be democracies. An excerpt:

...if free market democracy is such a good idea, why are most businesses run like military dictatorships?

Think about it! Most companies:

• Are controlled by a junta of corporate “officers.”
• Strive for tight top-down financial controls.
• Spy upon employee emails and activities.
• Obsess endlessly about the chain of command.
• Dictate rules and regulations from the top.

By contrast, I’ve seen very few companies that encourage internal competition beyond initial R&D efforts, and I’ve NEVER seen a company where the employees get to vote for the new President. Heck, even the stockholders don’t get to do that.

It seems to me that if CEOs really believed the Republican “talk”, they’d “walk the talk” and voluntarily set up their companies with internal free market economies and hold regular elections to determine who should manage each function.

However, since no CEO is willing to put his money where his mouth is, it’s logical to assume that most CEOs secretly believe, consciously or unconsciously, that organizations are better off when they’re run like military dictatorships.

With all due respect, I disagree. In my view, most corporations are successful in spite of top-down management, rather than because of it. In fact, I think that most businesses would benefit if the employees were running more of the show.

While I agree with most of his points, I think the emphasis of the solution needs to be free markets more than democracy. Silicon Valley is successful because it allows hundreds of startups to bloom and the market sorts out the winners from the losers - not because they hold some sort of big vote every year to pick the "best" startups. Companies need to shift their thinking from "managers" controlling departments to "internal venture capitalists" putting resources behind the best ideas, and they should be judged on the results of those investments. Talent needs the freedom to move to the most promising and best funded projects. (more on Organization 2.0 here)

To quote Hamel:

“Market-based economies outperform those that are centrally planned. …markets are better than hierarchies at getting the right resources behind the right opportunities at the right time. The average company, though, operates more like a socialist state than an unfettered market. A hierarchy may be an effective mechanism for applying resources, but it is an imperfect device for allocating resources.”

–“The Quest for Resilience” by Gary Hamel and Liisa Välikangas, Harvard Business Review, Sept. 2003

We designed OpenTeams to act as that self-organizing ideas+talent+$ marketplace for projects.

I'd love to hear your thoughts in the comments.

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?

Headed to WorldBlu Live conference in NYC

Looks like a great event on democratic organizations. If you'll be there, find me and let's chat about next generation organizations (or, my new label, Organization 2.0 - short overview pdf with 4 content charts here). Here's quick head shot so you know who to look for.

I might do a little live blogging from the conference, or at least report back afterwards.