Managing Organizations Democratically?

I recently finished reading Jeffrey Pfeffer’s Power: Why Some People Have it–and Others Don’t. I highly recommend it. Pfeffer provides much useful information about leadership and influence building. However, a section toward the end contained the most radical thought I have ever encountered in business literature.

Too frequently to count throughout my career, I have heard the statement: “This isn’t a democracy.” Businesses are not run by consent; they are run by fiat. But is that required?

In a chapter describing the reality of organization politics, Pfeffer postulates: “Maybe… democracy is good not only as a form of government for public entities but also as a way of making better decisions in companies and nonprofits.” What? Running organizations democratically? Ridiculous! Heresy!

This is no touchy-feely book. Pfeffer’s Power is a modern version of Machiavelli’s The Prince filled with examples of those who took or kept power in ways that would not win them any “good citizenship” awards. Nevertheless, Pfeffer cites James Surowiecki’s The Wisdom of Crowds (another book I highly recommend) in suggesting that effectively engaging a broad number of people in decision making will improve an organization.

“There are only two ways to resolve disagreements about what to do and how to do it–through the imposition of hierarchical authority in which the boss gets to make the decision, or through a more political system in which various interests vie for power, with those with the most power affecting the final choices.”

I would love to see the latter in practice. But, I’m not sure I’d buy stock in the company.

What do you think?

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5 Responses to Managing Organizations Democratically?

  1. Joshua Krage says:

    Is another term for the concept sociocracy? From what I’ve read of Google’s approach, they seem to operate somewhat like this. More accurately, they seem to operate more like a technocracy or meritocracy.

    Like a democracy, the ideal is only achieved when a sufficient number of people actively participate. I’ve seen some organization work well in hierarchal fashion, while still soliciting and using ample inputs from the worker-bees. And I’ve seen ample inputs overhwelm the decision-making process.

    • Jim Wiedman says:

      Joshua,

      I haven’t heard the term sociocracy. Interesting.

      I’ve started reading Charlene Li’s “Open Leadership” where she is delving into this topic. She presents a broader list of options than Pfeffer (this was only a suggestion for Pfeffer whereas Li was writing specifically on this topic) and I’m looking forward to finishing her book. She discusses Google, Twitter, Facebook and the Navy of all organizations, which have various levels of open leadership.

  2. Joan says:

    Sounds interesting. I find it pretty straightforward to make decisions WITH teams that I lead. (Of course there are times when I have to make a decision alone – like when time is of the essence or I have information that I cannot ethically share with them.) It seems like we make better decisions, and we continually improve our team dynamic. The process is fulfilling, and the outcome is superior. I think that the leaders on the team with whom I work most closely would agree that we have a good thing going.

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