by Hugh MacLeodDoes business need managers? Or first-line supervisors?
Or should organizations simply go Greek and give every citizen-employee a voice and a vetoing vote?
The corporation as pure democracy.
This was the theme of a Wall Street Journal article, Managing: Can a Company Be Run as a Democracy? By-line JACLYNE BADAL. She writes of a company, Ternary, and begins:
“Ternary runs itself as a democracy, and every decision must be unanimous. Any of Ternary’s 13 other employees could have challenged [a] decision and force[d] it to be revisited.
Running a company democratically sounds like a recipe for anarchy, and it can prompt bureaucratic whiplash: Ternary, a company with annual revenues of around $2 million, adjusted salaries for employees up and down several times last year.”
Goodness. Alert Reader Pat Patterson questioned the company structure:
I notice that the writer seems to use egalitarian companies and democratically run companies interchangeably. I remember that you have posted on the antithesis of these methods and hoped you might comment…concerning this report.
Plus I was dismayed to see that several of these companies were willing to experiment with democratic decision making with the caveat, “We can try it and see how it works.” Seemingly without any awareness of how much damage that could do to the stockholders.
Patterson seems to have greater insight on human behavior and organizational development than the reporter, the CEO or Traci Fenton:
Advocates say such systems appeal to workers, particularly younger ones, searching for careers with meaning. “Everyone wants to be a somebody,” says Traci Fenton, founder of WorldBlu Inc., a Washington organization that promotes workplace democracy.
And that is the challenge for managers and stockholders. Younger workers today, not really needing money or security, are moving up on Maslow’s hierarchy of needs, challenging any corporate hierarchy on their way to becoming self-actualized beings. (Maslow once said that a man could only be self-actualized after living a full life past 50.)
If there were no problems, or no change of any kind, or no exciting opportunities to compete for capital budget allocation, there would be no need for that overhead known as the Manager.
However, democratic-egalitarian management can work in some cases. If . . .
If there is no profit result needed, as in some non-profits (that exist to improve the human condition, as Peter Drucker says).
Or a church governing body where each deacon or ruling elder has a veto — the ruling council understanding that a dissenter’s motives are pure and he is accountable to a higher authority.
Democratic-egalitarian management can work in academia where really smart people debate (but where the politics are the most vicious) and Deans rotate much like a volleyball team. And there are seldom “emergencies” threatening people’s lives or the life of the organization. Except when it doesn’t. Note the lack of a prompt and proper response at Virginia Tech.
It might work in small software companies using a matrix management structure which diffuses lines of authority with multiple points of accountability. It works only because the code-slaves (used to) have stock options which would make them rich in short order. These are smart, well-motivated workers who are the owners of the enterprise. They are the bosses. However:
Harry Katz, dean of Cornell University’s School of Industrial and Labor Relations, doubts a system like Ternary’s could work on a large scale. In bigger companies, “there’s an inevitable conflict of interest between managers and employees,” Mr. Katz says. General Motors Corp.’s Saturn plant in Spring Hill, Tenn., for instance, experimented with giving employees a strong voice in management, but later moved back to a more-traditional structure, he says.
We are all equal in the eyes of the Creator or under the blind eyes of Justice. But we are not equal to each other. Egalitarianism is for commies and the French. Not for profit. Sorry.
Your Business Blogger may not be able to fire an employee for incompetence these days, but I can fire for insubordination. Or I might be tasked with reducing headcount. To improve profits. The manager’s vote counts: yours may not. Sorry.
Democratic-egalitarian management will not work for most organizations because, sooner or later, the building will catch on fire. Emergencies will not permit much discussion, or consensus, or a vote tally. Sometimes there isn’t time.
And someone has to be in charge. The Captain of the ship.
And even if the building is not burning, too much ‘consensus building’ is exhausting for the manager and paralyzing to the organization.
Bill Clinton famously had enormous staff meetings with each participant partici-panting. The meetings ran long. Clinton ran late. Nothing got done.
Oh, well, maybe there is a place for Democratic management…
Thank you (foot)notes:
Are Managers Sociopaths?
How does the Army market and manage today’s youth? What happened to the Army of One?
And what’s up with all the tattoos? And why don’t I see body piercings on the Starbucks employee?
Tom McMahon has a good example of poor management.
The Wall Street Journal article is available by subscription.