This month marked the founding, 750 years ago, of the first parliament to represent the people of England. It got me thinking about democracy and in particular democracy in the workplace. I’m sure most people in the western world will, on hearing that anything is democratic, think that’s a very good thing – but is that always the case?
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.