Democracy is a loaded word.
The world's experiments with political democracy inform our impressions of the concept, and the possibilities of democracy applied in a business context.
Drawing from WorldBlu's experience and research, we debunk some of the myths of organizational democracy here:
In order to be democratic, an organization must arrive at all decisions through voting or consensus-building.
An organization may choose to use voting or consensus-building to make decisions, but these practices are not requirements for operating democratically. Having a democratic organizational system in place also cultivates real-time feedback with well-informed and decentralized decision-making throughout the workplace.
Democratic organizations are slower, less efficient, and take longer to grow than command-and-control operated companies.
Democratic organizations, by nature of their organizational structure and design, are fast and flexible. However, as in the fable of the tortoise and the hare, democratic organizations may get off to a slow start but often win the race.
Democratic organizations have no hierarchy.
Democratic organizations are not completely void of hierarchy. Instead, they focus on being decentralized rather than completely flat. In general, however, democratic organizations do tend to have fewer layers of management.
Only small organizations can successfully practice organizational democracy.
Democracy works well for organizations of all sizes and especially well for larger organizations. The successful models we've studied range in size from fewer than 100 employees to as many as 35,000 employees.
Democratic organizations do not have a leader.
One of the primary goals of organizational democracy is to cultivate leadership at all levels of a company. Democratic organizations focus on aligning an individual's purpose with their core responsibilities in the company. This cultivates high levels of leadership throughout the organization.
Democracy is an American concept that only works in American organizations.
Democracy is a universal concept because it is based on a set of universal and timeless principles. To that end, organizational democracy can be and is practiced in organizations around the world.
Democratic organizations make less money than ones that operate with a command-and-control style.
Democratic organizations are often more profitable than their undemocratic competitors. Democratic organizations have several competitive advantages. To name a few:
- Democratic organizations keep expenses low because they require fewer layers of bureaucracy and management in order to operate;
- Democratic organizations have an open and transparent flow of information to all employees - allowing employees to make smarter, faster, and cost-saving decisions;
- Democratic organizations create a work environment employees love, and this contributes directly to a decrease in turnover rates.
Democratic organizations, on the whole, are more innovative, and often lead advancements in their industry because they cultivate an environment that enables their employees to respond quickly to market changes and demands.
Democratic organizations have to be built democratically from the ground-up.
Even organizations with entrenched histories of top-down, authoritarian or mechanistic cultures and structures can successfully transition to a democratic organizational model.
Democratic organizations don't function as smoothly as organizations that use a command-and-control style of operating.
Democratic organizations often operate more efficiently and more smoothly than command-and-control models because they are living, dynamic, and responsive systems allowing for shared responsibility, quick distribution of information, and instant feedback. They also have sustainable cultures that are not dependent on the personality of the leader at the helm.
A socially responsible organization is a democratic one.
Just because an organization is socially responsible doesn't mean that it is democratic. Socially responsible organizations focus on a "triple bottom-line": the organization's financial health, the external environment, and the community. Organizational democracy, on the other hand, focuses on developing the internal culture and organizing design of a workplace. This often ripples out into socially responsible interactions with the community and the environment.