“The DemoCratic Workplace” Research Paper

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.”

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Investors Benefit from Zappos Democratic Work Environment

Zappos, the online shoe retailer famous for its quirky company culture and unconventional management practices, recently announced that it is being acquired by Amazon.com for $847 million.  Founded in 1999, it took Zappos less than a decade to achieve revenues of over $1 billion, and the company has been profitable since 2006. 

Tony Hsieh, Zappos’ CEO, credits his company’s meteoric rise in a highly competitive market to the company’s laser-like focus on providing excellent service and support. 

As many democratic and decentralized companies have realized, the key to offering fantastic support is to enable employees to rely on their instincts and to trust them to make their own decisions.  At Zappos, customer service call center reps are not required to read from scripts.  Instead, they are encouraged to use discretion in making their own decisions without seeking approval from their supervisors. 

Zappos has worked hard to blur the lines between managers and employees that are common in traditional organizational hierarchies.  The company’s goal is to develop a fun, playful work environment where coworkers and bosses feel more like friends.  Managers are required to spend time socializing with their employees.   

Inc.com provides a detailed look at ‘the Zappos way of managing’.


Workplace Democracy at W.L. Gore & Associates

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.


Workplace Democracy at Brainpark

Imagine a rapidly-growing startup company where the CEO answers not only to his board of directors but also to his employees.  Mark Dowds, who founded Brainpark about a year and a half ago, decided that he only wanted to lead a company if the employees accepted his leadership.  As a result, any of the employees, including Dowds, can be removed by a vote of their coworkers.
 
WorkplaceDemocracy.com spoke with Dowds to get an inside look at how this innovative company is embracing innovation in its management practices.  Brainpark has made it a priority to democratize its policies and culture in order to develop a transparent and engaged work environment. 
 
The company conducts off-site meetings every six months to discuss Brainpark’s performance and recalibrate their strategy.  As opposed to many company strategy-setting meetings, where the CEO determine the agenda, Brainpark has adopted an ‘open agenda’ system, where each employee writes down their concerns, interests, and goals on papers which are posted on the wall.  Everyone reviews the papers and votes on which of the items are most important and will be included in the off-site agenda and strategy discussions.
 
Any of the team members can suggest potential candidates for open positions.  The job candidates are interviewed by two coworkers, and the new hires are selected collectively by Brainpark employees. 
 
Managers at Brainpark choose not to exercise their power to fire employees.  Instead, if a manager is having problems with one of their subordinates, then a team is put together to make a decision about whether the person should leave or stay with the company.
 
If anyone, including the top managers and CEO, is not pulling their own weight and delivering value to the company, their coworkers can talk to them to dicsuss the problem and to give them a chance to improve their performance.  If the person in question fails to change by a certain period of time, their colleagues can then decide to find them a replacement.
 
To help facilitate better decision-making throughout the organization, Brainpark has adopted an open book management policy, where company financial data is shared among employees, who are all granted ownership stakes in the company through a stock option program.  
 
New employees are usually very surprised when they learn about Brainpark’s innovative workplace policies, but most adapt quickly and can’t imagine working anywhere else.  The company’s outside investors strongly support its democratic practices after having witnessed their impact on the employees’ engagement and motivation levels. 
 
Brainpark, which has been named to the WorldBlu List of Most Democratic Companies, is proof that employees act like owners when they are treated like owners.


Workplace Democracy at GM and Chrysler?

There has been a lot of discussion going on about whether the workers at General Motors and Chrysler will become the owners of their respective employers and about the kind of impact that this ownership stake will have on the future of the two car manufacturers.

Without decentralizing the management structure and decision-making processes, simply turning the employees into shareholders at GM and Chrysler will have minimal impact on rectifying the core problems and overcoming the obstacles that have crippled these companies.  It is not enough for employees to hold ownership stakes if their employers still function as top-down hierarchical bureaucracies. 

Remaining innovative and competitive in today’s rapidly changing environment depends on a highly engaged and motivated workforce.  Employees can only break free from the confines of bureaucracy if they are able to act and feel like owners in the day-to-day management of the company. 

Employees will not feel like motivated owners until they are aware of the company’s goals and the ongoing progress towards those goals.  Financial and operational data should be shared freely among all employees.  In today’s information age, there is no reason to keep secrets and for executives to hoard information, even with regards to “sensitive” information like salary data.

Employees, especially those closest to the customers, need to have the power to make quick decisions autonomously, without having to wait for approvals to trickle down the management hierarchy.  Team-based, bottom-up decision making should replace the command-and-control, top-down structure that was so successful at stifling innovation, common sense, and competitiveness at GM and Chrysler.

In order for these companies to stand a chance at surviving the current crisis, General Motors and Chrysler must not limit their innovative turnaround efforts to their product and operational strategies.  They must also adopt cutting edge and creative solutions for transforming their organizational processes and culture.

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The Cost of Having a Boss

Management guru Gary Hamel provides an excellent explanation as to why only 21% of employees are highly engaged at work.  Contrary to common belief, it is not the type of job or salary level that determines the extent of one’s motivation, which is why companies such as Wegman’s Food Markets and QuikTrip convenience stores in “unglamorous” industries like retail consistently rank among the best places to work.

“The real damper on employee engagement is the soggy, cold blanket of centralized authority. In most companies, power cascades downwards from the CEO. Not only are employees disenfranchised from most policy decisions, they lack even the power to rebel against egocentric and tyrannical supervisors. When bedeviled by a boss who thwarts initiative, smothers creativity and extinguishes passion, most employees have but two options: suffer in silence or quit.

“In a well-functioning democracy, citizens have the option of voting their political masters out of office. Not so in most companies. Nevertheless, organizations here and there have taken steps to make leaders more accountable to the led. HCL Technologies, a progressive Indian IT services company, encourages employees to rate their bosses, and then puts those ratings up online for all to see. Bullies and bunglers have no place to hide. And W.L. Gore, the Delaware-based maker of Gore-Tex and 1,000 other products, lets its highly decentralized teams appoint their own leaders. These are interesting aberrations from the norm, but in most organizations, power is still allocated top-down.”

Until people are free from a system where their boss wields compete power over their livelihoods, companies will find it difficult to harness and benefit from the full potential of their most valuable asset.

The key to unlocking employee engagement lies in flattening the organizational hierarchy and democratizing the decision-making powers.  A good place to start is to allow employees to set their own salaries.  Teams of employees must also be trusted with the power to hire and fire their leaders and coworkers. 

More and more people are coming to the conclusion that command-and-control is no longer an effective way to manage a company.  There is no reason why responsible adults should be treated like irresponsible and dishonest children as soon as they arrive to work.  In a later post, we will explore additional democratic policies that companies can implement in order to cultivate a more innovative and engaged workforce.


How to be a “good boss”

A recent post on USNews.com listed some nice tips on how to be “a good boss in bad times.” While things such as smiling, listening, and providing feedback would certainly the workplace environment a bit more pleasant, the root causes of most employee disengagement and employee-boss problems stem from a deeper, structural level.

The main reason why most people are unhappy at work boils down to the nature of the boss-employee relationship. The definition of a boss is “a person who exercises control over workers and makes decisions.” Since most people don’t especially enjoy being controlled by someone else or having decisions made for them, it’s not surprising that so many people are miserable and feel unmotivated at work.

The best way for someone to be a good boss is to not be a boss at all, but to be a leader instead. The main difference between a boss and a leader is that bosses are selected (from above) while leaders are elected (by their peers). If you want to become a true leader, try “putting yourself up for election.” Tell your team members that you will lead them only so long as you have their support and that you agree to step aside should the team members decide at some point that you are no longer suitable for the job.