First of all we need to understand what democracy actually means: “control of an organisation or group by the majority of its members”
When it comes to the control of a country, that control is vested in the representatives elected by the majority; all good so far. However, translate that into the governance of a company and we might have a different outcome.
Imagine for a moment that company “x” wishes to operate as a democracy. On the face of it this would appear to be forward thinking and potentially a model of corporate management to which others would aspire. But, if we develop this thinking, at its most extreme this would mean that decisions about the company’s strategy, marketing, technology and more worrying pay reviews (!) would be voted on by employees. We would also need to include all other stakeholders so apart from being rather cumbersome, could skew the desires of those at the sharp end (workers) particularly in quoted companies where shareholders would likely outnumber them. I suspect at the point where the needs of the employees and the shareholders became diametrically opposed we would no longer have democracy but more likely anarchy.
Let’s go back to the thought that employees might vote on their own pay reviews, hours of work, conditions et al. Sounds like a nightmare for the HR department doesn’t it? And if there was ever a good reason not to be democratic, surely this is the clincher? Not necessarily.
In the 1980s the inimitable Ricardo Semlar, on taking over the autocratically run family company at the age of 21, decided to operate in a more democratic way he called it “participatory”. Briefly, in a struggling economy in Brazil where many companies were closing or at best downsizing, Semco survived because the workforce voted, amongst other things, to reduce their wages, multi task and interestingly to approve every item of expenditure.
So what am I proposing here?
It seems to me that it’s possible to be a maverick (the title of Semlar’s book) in a business if it has a charismatic leader who is comfortable with relinquishing control and who doesn’t have to answer to shareholders. For those other firms, I favour a consultative style of management where democratically elected representatives are involved in decisions. This is not new thinking, staff consultative committees were around in the 70s, along with Quality Circles and T-groups (a bit before my time!), but, if badly run, they can result in staff feeling as if management is “going through the motions”. So the most effective consultation with employees’ reps about key decisions should occasionally mean enacting something which goes against the grain. After all, isn’t there something rather unhealthy about a relationship which is always in agreement?
Finally, I’d like to offer a crumb of comfort to those who, when elections for these reps occurs, are crossing their fingers that Bob in packaging or Maria in Customer Service is not elected. We all have those folks who regularly darken the doors of HR to make a point, complain about the staff canteen or whatever. Think on this from the wonderful George Bernard Shaw:
“The reasonable man adapts himself to the world; the unreasonable man adapts the world to himself. Therefore, all progress depends upon uunreasonable men”