It is a significant challenge for a profit-making company to be a democracy. It is also a relevant topic for today. How a company can be more of a democracy in how it operates. There is a lot of discussion of autocracies and democracies regarding countries and how they govern; can the same questions be asked of companies? More specifically, is your company a democracy?
A democracy is an organization where there is rule by the majority directly or indirectly through men and women who represent the people and who serve and respond to their needs. A democratic company is one that engages employees in such a way as to share information and influence decision making to provide for their full participation in discussing alternatives and in selecting profitable pathways to follow. Do such companies exist and how close do they come to this ideal?
Democratic companies make a profit with collaboration between employees and their senior executives. Their characteristics include:
1. Information is shared for interpretation and meaning from different perspectives.
2. Deliberation occurs at all levels of the company.
3. There is an open book regarding company finance.
4. Leadership happens at all levels of the organization.
5. Transparency is practiced throughout the company.
6. There is greater informality and focus on principles.
7. There is a deeper sense of belonging (ESOP).
8. Change is embraced as part of the work.
9. Meaningful work is the driver.
10. People learn from mistakes.
11. Critical thinking and evaluating is practiced.
12. Accountability is embraced at all levels.
These are the dominate characteristics of more democratic companies. As more and more Generation Z enter the workforce and more Generation Y (millennials) are their bosses, democratic practices become a relevant dialog. These generations are used to working in teams and not within a hierarchical structure. Especially as employees of companies like W.L. Gore and Associates, a manufacturer of advanced technology products; BrainPark, a neuroscience research clinic; and DaVita, a leading provider of kidney dialysis services in the U.S. They are successful as companies with strong democratic elements.
An autocratic company with centralized authority may not be attractive to the best of Generations Y and Z. As the years move on, an autocratic company can hope to be exposed to an effective change management process and be transformed into a more suitable and perhaps more democratic company to join.
Since no democracy is perfect there may be companies whose practices fit somewhere between autocracy and democracy. Such companies are moving forward with a more centralized decision process and more democratic processes for gathering, processing, and interpreting information. A profit-making company will always retain a single decision maker whether an owner or senior executive. The trend seems to be more of a shared accountability and responsibility rather than a true democracy.
Is your company becoming a more democratic company? It can if you are vulnerable to the innovative people in it. Listen to them and let them lead you to different paths of success.