Michael Moore, ‘Capitalism: A Love Story’ and Workplace Democracy

Posted: November 11, 2009 | Author: | Filed under: democracy at work, Democratic Companies, employee engagement, employee-owned companies, Management Innovation, open-book management, workplace democracy | Tags: , , , , , , , , , , , , , , , , , , | Leave a comment

Capitalism: A Love Story, the 2009 documentary movie directed by Michael Moore, criticizes the current economic order in the United States and capitalism in general while covering the financial crisis of 2007–2009 and the recovery stimulus.  In his movie, Moore highlights workplace democracy as an alternative model to capitalism.

Many would argue that workplace democracy should not be considered a replacement to the capitalist economic system.  Instead, workplace democracy is a highly effective management strategy that helps enable companies to engage and motivate their employees and to maintain a competitive advantage in their industries.

Workplace democracy is not limited to a specific type of company ownership structure.  Democratic companies come in all shapes and sizes and range from high tech start-up companies such as Brainpark, to small worker-owned cooperatives such as South Mountain, to large privately-held companies such as W.L. Gore and Associates, to large publicly-traded companies such as DaVita.

Workplace democracy is an innovative management strategy where company information and decision-making powers are shared and distributed among employees so that customer-facing workers (who are closest to customers and usually know them best) are aware of the company’s goals and performance and have the ability (and motivation) to make smart decisions quickly, which is essential in today’s fast-moving and hyper-competitive marketplace.

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An interview with the authors of Freedom, Inc.

Posted: October 13, 2009 | Author: | Filed under: democracy at work, Democratic Companies, workplace democracy | Tags: , , , , , , , , , , , , , , , | 3 Comments

Brian Carney and Isaac Getz are the authors of a new book called Freedom, Inc., which is being released today!  WorkplaceDemocracy.com spoke with them recently about their book and its connection to workplace democracy.

What is Freedom, Inc. about?

Freedom, Inc. is a book about the most important corporate movement of the last two decades, a movement that has been quietly transforming the fortunes of dozens of businesses and the lives of thousands of employees by using a source of benefits neglected by most—complete freedom and responsibility for employees to take actions they—not their bosses—decide are best.

Each of the unusual bosses and amazing leaders profiled in Freedom, Inc. have performed near-miracles in driving their companies to unheard-of levels of success, often from unlikely or disheartening beginnings. And each has something in common with the others—he believes that the key to business success is freeing up the initiative and genius of every, even the lowest-ranked employee in the firm, every day. How they set their employees free—and how their lessons can be applied to firms in every industry, of any size, anywhere in the world—is the story of this book.

After four years of research, thought and debate, we have identified three stages that each leader went through to build a radically free workplace—rejecting the command-and-control structure, enlisting employees in building a free workplace, and staying put in spite of setbacks;  and in each successive stage this leader relied on one corresponding personal strength: values, creativity, and wisdom . Among the leaders of the companies we studied, these three strengths set them apart from other executives while binding them as a group.

Were most of the companies featured in Freedom, Inc. founded as democratic companies or did their management structures evolve from more hierarchical structures?

I’ll reply to all your questions considering that “democratic” means “freedom-based”–the term we use in the book to describe the companies we studied.  We avoid “democratic” mainly because it focuses too much on the instruments (and none of our companies used, for example, formal voting for making decisions). Our companies, each with their own instruments, all focused rather on the end: freedom of action and initiative for every employee.

What inspired these companies to develop freedom-based workplaces?

Each company had what we call a liberating leader at its head, who initiated the changes.  The leader was either frustrated with command & control companies and/or admirative of the freedom-based ones such as WL Gore & Associates.

How does democracy work at these companies?

Freedom of action is achieved when an environment satisfies universal human needs instead of hampering them. These needs are intrinsic equality, growth, and self-direction, according to the most advanced psychological research carried out by University of Rochester psychologists Edward Deci and Richard Ryan.

What have been some of the main challenges in cultivating democratic workplaces?

Workplaces struggle to evolve the often authoritarian managers’ practices into freedom nurturing practices.  Some liberating leaders had to remove certain managers (albeit keeping their salary) from the positions of authority.

Why should companies consider decentralizing their workplace?  What are the advantages of freedom-based or democratic companies?

Freedom of action is a tremendous advantage because in freedom-based companies, employees facing a sudden surge in competition, a downturn, a new government regulation, or an inadequate business process don’t simply wait for their higher ups or some new policies to tell them what to do. Instead, they take action that they—not their bosses—deem is best for the company and they do it right away—not when it’s too late. Add to that that frontline people always know better what’s going on and what needs to be done. So letting them take action is pure common sense.

What is the most important step that companies should take in order to become more democratic?

The most important step is for the liberating leader to stop telling people how to do their work and instead ask them how they want to do it.

Interview with WorldBlu Founder Traci Fenton

Posted: September 30, 2009 | Author: | Filed under: democracy at work, Democratic Principles, workplace democracy | 1 Comment

The following is an interview that WorkplaceDemocracy.com conducted with Traci Fenton.  Traci is the Founder and CEO of WorldBlu, a non-profit organization that champions the growth of democratic organizations worldwide. She is also author of the forthcoming book, Democracy at Work.

What makes a company ‘democratic’?

A company is democratic when it operates using the principles of organizational democracy, such as accountability, transparency, and decentralization, as opposed to a top-down, command-and-control model. This mode of operation is fundamentally determined by the design of the organization, and it influences performance on the individual, leadership, and systems and processes levels.

Why should companies consider democratizing their workplace?  What are the advantages of democratic companies?

Operating democratically can have a huge impact on the bottom-line. A recent Gallup poll showed that 73% of the workforce in the U.S. is disengaged at work, costing the US economy over $300 billion a year. This is an incredible waste of resources and talent. Democratic workplaces tend to have lower turnover and absenteeism, attract and retain top talent, have higher levels of productivity and efficiency, and are more innovative. Gallup has also found than people who work in democratic or highly engaged workplaces are both physically and psychologically healthier. Plus, the people who work in democratic organization are just plain happier too!

Additionally, in today’s economy, advances in technology are requiring organizations to be faster, more creative, networked, and non-hierarchical. Generations X and Y expect their workplaces to be authentic, personal, and flexible, and they thrive in that type of environment. Customers are eyeing companies with increasing scrutiny and are demanding more transparency and accountability.  The current economic crisis has caused companies to rethink their rules of corporate governance, systems and processes, and operating values. Organizational democracy offers a new business design that addresses these challenges.

In addition to being financially successful, democratic organizations can make a social impact, fighting corruption, and increasing economic prosperity, peace, and civic engagement in their communities, according to research by the Ross School of Business at the University of Michigan.

Please tell us about the WorldBlu List of Most Democratic Companies.

The annual WorldBlu List of Most Democratic Workplaces™ is a global award that shines a spotlight on visionary companies successfully practicing organizational democracy. 

Any for-profit, non-profit, governmental or non-governmental organization can apply for the WorldBlu List award as long as they have a minimum of five full or part-time employees in have been in operation at least one full year. The process is simple – once they sign up their employees compete a survey evaluating how democratic the organization is based on the WorldBlu 10 Principles of Organizational Democracy. Unlike other awards and certifications, the employees themselves – not an outside panel of judges — let us know if the organization is democratically designed or not.

The WorldBlu List award has been recognized by global media worldwide, including The Wall Street Journal, The New York Times, The Christian Science Monitor, The BBC, BusinessWeek, US News & World Report and Fast Company magazine, to name a few. 

We are accepting applications now  for the WorldBlu List 2010. I invite your readers to learn more by clicking here.   The deadline to apply is November 30, 2009.

Can you give us a few examples of innovative and successful democratic policies that some of the WorldBlu companies have implemented?  How have these policies impacted those companies?

One of the companies on the WorldBlu List 2009 that used organizational democracy from the very beginning was Menlo Innovations, based in Ann Arbor, MI. I had the opportunity to visit Menlo back in January of this year and was so impressed with how they work. For example, team members are paired together and do their work on a shared computer. Yes, that’s one computer, two people. The pairs then change each week to ensure transparency and accountability across the organization. By using this system, Menlo avoids bottlenecks that occur when only one person knows information and builds high levels of trust among team members. Menlo’s employees also get to design their open work environment. The space contains lightweight tables and electrical/network drops from the ceiling that provide for infinite flexibility in layout.

Most people think that organizational democracy can only work in small companies. But DaVita, a healthcare company that provides dialysis services, proves that it can work in FORTUNE 500® companies too. But it wasn’t always that way.

Back in 1999, DaVita was struggling and they brought a new CEO, Kent Thiry, on board. He then transitioned DaVita into a democratic company, a decision that resulted in an increase in annual revenue from $1.4 billion in 1999 to $6 billion in 2008. DaVita’s democratic practices include opportunities for employees to vote on significant decisions for the company, regular Town Hall meetings between the senior leadership and staff members, and a decentralized structure that allows each of DaVita’s 1,400 clinics to determine their own rules and guidelines.
 
What are some initial steps that companies can take in order to become more democratic?

1. Open the books. Provide information to employees about the company’s financial health, strategies, and even salaries, and teach them what the numbers mean. The Great Game of Business and Zingerman’s offer courses on how to practice open-book management. 
 
2. Create and strengthen opportunities for dialogue and listening across all levels. This practice can take the form of DaVita’s Town Hall meetings that I mentioned before, having an employee participate in management meetings at every level, or having seats on the Board reserved for elected employees.

3. Co-create the company vision and purpose statements. This practice give employees a greater feeling of ownership of the company’s purpose and vision, and it also allows each staff person to find the greatest alignment between his or her individual purpose and vision, and that of the company.

4. Give employees a voice in decisions that impact their work. This practice can range from letting employees participate in strategic planning and goal setting, to letting them to choose their work, projects, and teammates, to letting them determine new hires and salaries.

Democratic companies profiled on CNNMoney.com

Posted: September 23, 2009 | Author: | Filed under: democracy at work, Democratic Companies, employee-owned companies, workplace democracy | Tags: , , , , , , , , , , , , | 3 Comments

CNNMoney.com recently profiled six worker-owned, democratic companies.  These companies, from diverse industries such as software to auto parts to beer brewing, all credit their innovative management structures with having helped them wheather the current economic crisis. 

Here are the companies that were profiled:

  • We Can Do It! Women’s Cooperative (Si Se Puede! in Spanish) was founded in Sunset Park, Brooklyn, in August, 2006, to bring together immigrant women to create a women-run, women-owned, eco-friendly housecleaning business. All members have an equal vote in decisions regarding policy and operations. In addition, members work together to promote the business and meet bi-weekly for on-going training and support.
  • Full Sail Brewing Company is a craft brewery in Hood River, Oregon, United States. Founded in 1987, Full Sail was the first commercially successful craft brewery to bottle beer in the Pacific Northwest for retail sale, and one of Oregon’s early microbreweries. For years, they had been thinking and talking and dreaming about the idea of becoming an employee-owned company. Full Sail became an independent, employee-owned company in 1999, divvying up the company between their 47 employees. Of all our accomplishments, this is the one that makes them most proud.
  • Since 1980, Isthmus Engineering and Manufacturing has provided custom machinery to address the needs of first-time automation users as well as companies well-versed in the benefits of automation. From their beginning as an engineering partnership to their incorporation as a workers’ cooperative, Isthmus Engineering has evolved into a world-class builder of automated equipment. Established as a “worker’s cooperative”, the success of our employee-owned company is contingent on the performance of the entire team. Management decisions are made democratically: one member – one vote. Each member shares in the responsibility of managing the business.
  • Founded in 1994, Mushkin is best known for producing “Enhanced” memory modules. Located at the base of the Rocky Mountains in Denver, Colorado, Mushkin provides performance enhanced computer products to users worldwide. Mushkin products include an enhanced power supply line and a complete selection of memory upgrades for desktops, servers and notebooks. With customers including everyone from Apple Computer and NASA to gamers and web browsers, Mushkin knows what is important to customers – enhanced performance with uncompromised quality.
  • Pelham Auto Parts was founded in the 1970’s by Pelham Auto Service, a group of mechanics in the Pioneer Valley of Western Massachusetts who specialized in small car repair. At the time imported car parts were much harder to come by than they are today. Pelham’s founders took it upon themselves to make sure they had the parts they needed for themselves and their customers by creating a parts store. Pelham Auto Parts was born and began to supply other local garages, mechanics and do-it-yourself’ers, always maintaining a desire to sell good parts at good prices and abide by a work ethic than included more than just showing up and doing a job. Pelham is a brick and mortar parts store, owned by the people who work there, rooted in their community but accessible to the world.
  • Ronin Tech Collective is a worker-owned and operated technology collective, focused on workplace democracy and promoting a democratic society while supporting progressive businesses, non-profits, and cooperatives by providing open-source website development and consulting. Through their work, Ronin hopes to create positive change in our world by providing the best possible software and highest quality support for their customers. Ronin is located in Brattleboro, Vermont and serves clients all over the country.

Click here to read the entire story from CNNMoney.com.

The Invisible Hook: What Managers Can Learn from Pirates

Posted: September 9, 2009 | Author: | Filed under: Democratic Principles, Management Innovation, workplace democracy | Tags: , , , , , , , | Leave a comment

WorkplaceDemocracy.com conducted an interview with Peter Leeson, economics professor at the University of Chicago and author of The Invisible Hook: The Hidden Economics of Pirates. The Invisible Hook is a fascinating book that explores why and how lawless and violent pirates organized themselves into what may have been the world’s first democratic workplaces.

The Invisible Hook shows how pirates’ search for plunder led them to pioneer remarkable and forward-thinking practices. Pirates understood the advantages of constitutional democracy–a model they adopted more than fifty years before the United States did so. Pirates also initiated an early system of workers’ compensation, regulated drinking and smoking, and in some cases practiced racial tolerance and equality. Revealing the democratic and economic forces propelling history’s most colorful criminals, The Invisible Hook establishes pirates’ trailblazing relevance to the contemporary world.

What is the “invisible hook” and how does it relate to workplace democracy?

The “invisible hook” is the piratical analog to Adam Smith’s “invisible hand” idea, which describes how individuals’ self-interest seeking guides social cooperation among legitimate persons. My argument is that, similarly, criminal self-interest seeking guided social cooperation among pirates. As my book describes, in pirates’ particular economic context, rational self-interest seeking led pirates to socially cooperate through a kind of workplace democracy in which pirates were more-or-less equal shareholders in their ship and its proceeds and democratically made important workplace decisions.

How did pirates’ organizational structure differ from that of law-abiding merchant ships?

On pirate ships, crewmembers democratically elected important officers, such as the captain, and enjoyed similar perquisites of crew membership. Further, power was divided among multiple officers, such as the captain and quartermaster, who checked one another’s authority. In this sense, pirates’ organizational structure was ‘flat.’ On merchantmen, in contrast, the organizational structure was much more hierarchical. The captain wielded the lion’s share of the power and the ordinary crewmembers were subjected to his largely uncontrolled authority. Authority was much more concentrated and ship-board governance mirrored governance in landed legitimate society in being much more autocratic.

Why did pirates organize their activities democratically?

Pirates organized their ships democratically becuase this organizational arrangement maximized profits in pirates’ particular economic context. Unlike crewmembers on merchantmen, where a very different economic context dicated a different profit-maximizing organizational  structure, crewmembers on pirate ships were owners and employees of the ‘firm.’ It therefore made economic sense for each man to have a say in the firm’s enterprise–to make decisions democratically. Democratic organization was ‘cheap’ for pirates to adopt (in contrast for merchantmen for reasons discussed in the book) and yielded large benefits in the form of effectively preventing officer predation, which plagued merchant ships.

What effects did the pirate organizational structure have on the crew?

Pirates’ democratic organization had at least two major effects on the crew. First, it empowered pirates to popularly elect and depose important officers, which gave pirates great control over their ‘leaders.’  This in turn created strong incentives for pirate ‘leaders’ to wield their power in the crew’s interest rather than against the crew’s interest for personal benefit. Second, since pirates’ democratic organization extended to their method of pay as well–each pirate received a roughly equal share of the booty–it created several “collective action problems” for pirates that they needed to solve. For instance, this method of payment encouraged crewmember shirking, which pirates overcame by instituting a system of social insurance and bonuses.

What lessons can today’s managers learn from pirates?

Among the most significant modern management lessons from 18th-century pirates is the importance of letting the pursuit of profit determine ideas about a firm’s organizational features rather than the other way around. It’s tempting to conclude from pirates’ success with workplace democracy that this highlights the desirability of this organizational form more generally. But that would be mistaken. In pirates’ particular case–a relatively small ‘workforce’ operating a firm that required no external financiers in which information about each laborer’s contribution to production was difficult to glean by observation–workplace democracy was profit maximizing. And for other firms that also satisfy these economic conditions this will also tend to be true. But for firms that don’t satisfy such conditions, for instance large firms, or those that require lots of external capital to function, or those in which it’s relatively easy to measure laborers’ contribution to team production–which is the vast majority of firms–workplace democracy won’t be a profit-maximizing form of firm organization. Workers would be better off under a different organizational arrangement. Thus what pirates teach us is the desirability of letting profit dictate the particular organizational features a firm adopts rather than the universal desirability of particular organizational features across firms.

Democratic Company Profile: South Mountain

Posted: August 28, 2009 | Author: | Filed under: workplace democracy | Tags: , , , , , , , , | 2 Comments

WorkplaceDemocracy.com recently interviewed John Abrams, the co-founder and CEO of South Mountain Company and the author of COMPANIES WE KEEP: Employee Ownership and the Business of Community and Place.  COMPANIES WE KEEP celebrates the idea that when employees share in the rewards as well as the responsibility for the decisions they make, better decisions result.

South Mountain Company, Inc. is an employee-owned design/build and renewable energy company founded in 1975.  Located on the island of Martha’s Vineyard in Massachusetts, their worker cooperative’s 30 employees (more than half of whom are full owners) provide a full range of integrated environmental building services:  planning, architecture, building, interiors, energy efficiency services, and renewable energy.

Can you talk a little about South Mountain’s history and how the workplace democracy idea began?
 
In the early days, we never thought of ourselves as a company.  My original partner and I were hippies looking for a way to pursue our craft.  The last thing we were interested in was business.  When we arrived on Martha’s Vineyard, we found ourselves, ironically, in business.  After a few early mishaps, I found myself interested in and wanting to learn more about business.  Once I got my bearings, and had some long-time employees who wanted to stay with the company, I was ready to return to my roots and develop a community-based business that belonged to the people who did the work.

What inspired you to make South Mountain a democratic company?

When my original partner left, I was left with a great company and a great team.  The inspiration for organizational restructuring came from two long-term employees who said they wanted to stay with the company rather than spin off their own buisnesses, but that they needed a greater stake.  Together we looked for models that would do more than address their situation, assuming that if we did our job well this same situation would arise again and again over time.  We heard about the Mondragon Cooperatives in the Basque region of Spain and were excited by their values and their success.  The Industrial Cooperatives Association in Boston (now the ICA Group) helped us implement a similar cooperative ownership model in our organization on a much smaller scale.

How does democracy work at South Mountain?

In terms of governance, our employees make decisions by consensus about significant policy issues.  South Mountain has 18 employee-owners out of 30 total employees.  We hold meetings once every two months and the group deliberates about issues that concern the company’s future.  Consensus decision-making has worked for us and has been very valuable.  Fortunately, we have a backup 75% supermajority voting system for times when consensus is stalemated.  Over 22 years we have only had to use it three times, but it is key to the success of the system. 
 
In terms of the day-to-day operation of the workplace, there is a tremendous amount of collaboration at South Mountain, and all voices are heard.  We are always looking for the right balance and seeking the best way to make decisions by learning the skills of facilitation and fostering utterly productive and engaging meetings.  

What effects have South Mountain’s democratic workplace had on your employees?

I can tell you one thing, they are still here!  People stay for 3 to 4 years, or they settle in and stay for good.  People are extremely energized by the company culture; they truly care about the company and give their best.

This also affects our hiring practices.  When we recruit new people, we are not just looking for people with specific skill sets; we are looking for great future owners.

What have been some of the main challenges in cultivating a democratic workplace?

Early on, people were used to their roles, so a lot of people had a hard time making the switch to ownership and leadership roles.  But once we made that shift and people actually became owners, discovered their opinions and voices and relished the opportunity to take part in the decision-making process.   
 
Even though 2009 has been a difficult year because of the recession, it has been a great year for South Mountain in many ways.  We had to think differently and address issues we hadn’t had to before.  For 35 years, for every day of every week of every month of every year, everyone came to work with productive work to do.  Layoffs were unknown.  But now we had to consider the unthinkable.  What if there was not enough work for all?  Good discussions led to a tiered group of actions: 
1. We would offer voluntary, temporary, rolling furloughs. 
2. We would use the company’s capital to support projects that would not generate immediate revenue but that might provide us with a return later on, or community projects that would keep as many people working as possible. 
3. We would have a reduction in hours. 
4. We would have a reduction in pay. 
5. Finally, if there was no other choice, we would initiate involuntary furloughs.
 
Surprisingly, during this year’s annual evaluations, even though it was a tough year, employees gave the company higher ratings than they did last year (8.7 in 2009 vs. 8.4 in 2008), mainly because they were impressed with the internal communication, the supportive atmosphere, and how the company is performing and weathering the recession while many other companies have been doing poorly, conducting massive layoffs, etc.

Do you think that employee ownership is an integral part of workplace democracy? 

Absolutely.  I don’t really believe in ‘responsibility without accountability’.  Sharing ownership is critical.  When people will personally benefit or suffer as a result of their decisions, they will naturally make better decisions.

“The DemoCratic Workplace” Research Paper

Posted: August 18, 2009 | Author: | Filed under: workplace democracy | Tags: , , | 1 Comment

Rune Kvist Olsen, a consultant, author, and former lecturer at the University at Tromso, Norway, has written a paper called “The DemoCratic Workplace.”

The paper was written in order “to approach workplace organization through a ‘participatory strategy’ which is based on the involvement and engagement of the individual human being in the workplace.”

Click here to access “The DemoCratic Workplace.”

French Democratic Company Excels at Satisfying Customers

Posted: August 10, 2009 | Author: | Filed under: Democratic Companies, Management Innovation, workplace democracy | Tags: , , , | Leave a comment

Matthew E. May wrote an article called “How to Design a Flat Organization” for the IDEA HUB at Amex OPEN Forum.  May profiles FAVI, a French autoparts manufacturer with sales of more than $100 million and over 400 employees.  In the early 1980’s, FAVI replaced its hierarchical, bureaucratic structure with a flat, team-based model that focused their efforts on customer satisfaction and innovation.

“Accountability is to the customer and to the team, not a boss, so FAVI people are free to experiment, innovate, and solve problems for customers. They’re known for working off-shift to serve customers or to test out new procedures. Equipment, tooling, workspace, and process redesign all rest in the hands of those doing the work. FAVI people are encouraged to make decisions and take quick action to improve their daily work and respond to the needs of their customers. Control rests with the front lines, where it adds the most value.”

Click here to read the entire article.

Workplace Democracy at DaVita

Posted: August 3, 2009 | Author: | Filed under: Democratic Companies, workplace democracy | Tags: , , , , , | 2 Comments

Last week, WorkplaceDemocracy.com spoke with Lisa Joins to get an inside look at one of the nation’s largest and most successful democratic companies.  Joins is a director of people services at DaVita, a FORTUNE 500 company and a leading provider of dialysis services in the United States. 

DaVita has serves approximately 115,000 patients in over 1,500 outpatient dialysis facilities and acute units in over 700 hospitals. DaVita has been selected by FORTUNE as one of the World’s Most Admired Companies for the past 4 years and has been ranked by Modern Healthcare as one of the 100 Best Places to Work in Healthcare.

DaVita has been selected to the WorldBlu List of Most Democratic Workplaces.  Can you talk a little about DaVita’s history and how the workplace democracy idea began?

The idea of workplace democracy began when DaVita was formed in June 2000.  Kent Thiry, our CEO, saw that the company was in need of a different level of leadership with the team concept as its driving force, so he decided to make the company culture one of the areas of priority.   He made a concerted effort to ensure that everyone had a voice promoting full buy-in to our new strategy and direction.

How does democracy work at DaVita?

Each local area of the company is managed independently by its local leadership team. And it is that team’s responsibility to be creative to meet and maintain the company’s strategic goals.  Each area gets to decide on how to best achieve its goals according to their local market.  This philosophy includes not only the senior leaders but those who sit on the front lines of the organization.  DaVita is unique in how we communicate with each other, and this speaks to all levels within our organization.  Our CEO is very active in communicating with the teammates about the company’s progress.  Virtually every large team meeting provides an opportunity for a question and answer session.  For example, we conduct local town hall and homeroom meetings.  We also host ‘Voice of the Village’ calls where all teammates in our Village are invited to call in and to receive company updates  from our core senior leadership team.  Anyone participating in these calls can ask the CEO and the core team any questions about the business, policies, etc.

Another example is our profit-sharing program, which is given on a regular basis multiple times per year.  At many other companies, the top managers determine the specifics of their profit-sharing programs.  At DaVita, each leadership group together with the help of their local teams chooses their goals of measurement.  These goals are used as the key factors for measuring the success of the team and profit-sharing payouts are tied to those accomplishments.

There is a village atmosphere here at DaVita which helps people feel as though they are part of a community and less like they are part of a large company full of “red tape”.  Local teams are given the opportunity to name themselves and create identities.  Ongoing communication plays an important part in helping the teammates connect with each other and to the company.   And this feature is critical in keeping a company that has 30,000 plus teammates alive and full of energy.  There are daily ‘Homeroom’ meetings that are hosted in local clinic/office environments and weekly ‘Village Voice Communications’ go out in email to all teammates.  These venues give teammates the opportunity to receive valuable real-time information regarding policies, company updates, items of recognition, etc.

There are a number of village-level programs that help enrich the lives of teammates.  For example, there is a program called the ‘DaVita Village Network,’ where people can donate money to emergency funds to help other village teammates in times of need.  There are also educational funds which are given to teammates and their families, and there are vacation award programs that our CEO personally donates to reward teammates for outstanding work and service to the Village. We also have many programs that reach out beyond our company such as the Bridge of Life.  The Bridge of Life program gives our teammates an opportunity to participate in starting dialysis clinics in several under developed countries around the world.

What is the hiring process at DaVita? How does it differ from the hiring process at other companies?

First of all, DaVita places a great deal of importance on promoting from within.  We are constantly evaluating our internal talent and looking at these individuals for promotional opportunities.  DaVita offers ‘stretch assignments’ where people can learn and apply new skills.

Prospective job candidates often have the opportunity to interview with a team of representatives from the department so they can meet all levels with the team and learn more about the company from those who hold different levels of roles.  Job interviews at DaVita are very interactive, and we encourage candidates to ask questions about the role, team, the company and culture.  During the onboarding process, we make strategic efforts to ensure that our new teammates receive an in depth acclamation to DaVita’s philosophy, culture and our “village-like” way of operating. 

Is the process of firing an employee different at DaVita than at other companies?

Yes, we do our very best to ensure that every teammate who is performance managed receives every opportunity to improve, receive “on time” feedback and get back on target in their role.  We have a multilayered progressive discipline process that includes not only reviewing performance but also evaluating whether or not a teammate who is not successful has the right attributes for the requirements of the position.  Often times, we will consider looking at other roles within the organization for teammates who we find are great teammates who add value but are not in the right role for their levels of experience.

What is it like to work at DaVita?

It’s the best company I’ve worked for.  DaVita is a fun, energetic company that stresses collaboration and a team-based environment.  The company offers tremendous opportunities to its teammates for growth and development.  This is the first company that I’ve had the opportunity to work for where the culture resonates throughout all facets of the organization.

Workplace Democracy at W.L. Gore & Associates

Posted: July 14, 2009 | Author: | Filed under: Democratic Companies, Management Innovation, workplace democracy | Tags: , , , , , , | 2 Comments

Last week, WorkplaceDemocracy.com spoke with Steve Shuster about what it’s like to work at one of the nation’s largest and most successful democratic companies.  Shuster is part of the enterprise communication team at W.L. Gore & Associates, his employer for the past 27 years. 

With more than $2.5 billion in annual sales and 8,000 employees in over 50 facilities worldwide, Gore is a leading manufacturer of thousands of advanced technology products for the electronics, industrial, fabrics and medical markets.  Gore is one of only 12 companies that have been on the Fortune 100 Best Places to Work list since it began.

What is it like to work at Gore?

You feel like you’re part of a family.  I have been working at Gore for 27 years, and I still get excited coming to work each day.  There is a sense of being among family, and this creates a special bond between associates and a connection with the company.  

Everyone is an owner in the company and shares in the good times and in the bad times.  Everyone works in teams, and there is very little hierarchy at Gore. 

How would you describe Gore’s company culture?

The company culture at Gore gives people a sense of belonging and gives us a sense that we are making an impact on society via our products.

There are four principles that are the foundation of Gore’s culture: fairness, freedom, commitment, and waterline.  The waterline principle means that it’s ok to make a decision that might punch a hole in the boat as long as the hole is above the waterline so that it won’t potentially sink the ship.  But, if the decision might create a hole below the waterline which might cause the ship to sink, then associates are encouraged to consult with their team so that a collaborative decision can be made. 
 
Our culture is based on integrity and a high level of ethics.  The organization operates as a flat, or ‘lattice,’ organization, where all employees are referred to as ‘associates.’   There are no bosses, only ‘sponsors’ who are similar to sports team coaches.  Sponsors are responsible for leading the teams and who are mainly focused on their team members’ growth and development.  The process of becoming a sponsor is through followership, and each group chooses their own sponsor.

Do team members have the power to remove or replace their sponsors?

In the event that a sponsor is not doing a good job, the team members speak with the sponsor about the problems.  If they are unable to resolve the problem, then the sponsor or team members might suggest an alternative team member to become the team’s new sponsor  This type of situation happens fairly often at Gore, as the teams are fairly fluid and adapt to the changing environment and market. Often when associates change commitments, they will seek out a new sponsor.

Do team leaders have the power to remove members of their team? 

If a leader doesn’t feel that a certain team member is contributing sufficiently but the other team members disagree, then the team will first meet to decide about how to make the decision.  Most often, the decision will be made collaboratively with all of the team members  being able to voice their opinions and vote on the outcome. Leadership at Gore is defined by followership, not by being given a title.

Gore has been described as having a democratic workplace.  Can you give us a few examples of innovative and unique HR/management policies that Gore has implemented?

Gore’s lattice, team-based organizational structure and the opportunity to provide feedback about other team members are two of our innovative work practices.  Associates get to manage what type of projects they are working on.  Also, associates’ compensation is based in part on their contribution to the enterprise.  All associates rank each of their colleagues according to what they feel their contribution has been to the enterprise.

What is the hiring process at Gore?  How does it differ from the hiring process at other companies?

The main difference is that Gore looks for individuals who fit Gore’s unique culture.  We look for people with an entrepreneurial spirit who are not focused on titles and hierarchy.  We conduct behavioral interview questions to help determine whether candidates fit our culture.  Gore includes several team members and representives from the business in the interview process to ensure the right candidate is selected.  Gore is not for everyone; some people don’t mesh with Gore’s culture because they can’t work without a title, or because they want to be directed.

How does Gore encourage its associates to be more innovative?

The innovative culture, which started with our company founder Bill Gore, helps foster innovation and gets people working towards a common goal.  The company culture makes associates feel that it’s ok to take risks and make mistakes.  For example, Gore asked me early on how many mistakes I’ve made so far.  He then told me that if I’m not making mistakes, then it means that I’m not taking enough risks and trying to innovate as much as I should be.

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