Can A Workplace Be A Democracy?

Posted by: Jena McGregor on September 6, 2007

I had an interesting conversation yesterday wicth a woman named Traci Fenton, who heads up a “leadership and business design studio” called WorldBlu. I called up Fenton after reading a piece in Boston Magazine this weekend about “workplace democracy,” and the Boston-area companies that had made WorldBlu’s list of particularly egalitarian organizations. Many of the firms on the list are members of the new-age business set—design consultancy Continuum, organic beverage bottler Honest Tea, Second Life virtual world maker Linden Lab—but there are a few more traditional industries on the list, such as software makers Motek and Ternary or a GE jet engine plant in North Carolina that uses a consensus-driven decision-making process.

So what makes an organization democratic? Fenton has a laundry list of characteristics that on the surface, don’t really sound all that different from many of the new-age HR issues—flat organizations, open-book management, employee ownership—that have become popular, if rarely truly implemented, management ideas. Fenton calls democratic organizations those where access to real-time financial information is granted at any time, who encourage informality over formality, and where “the employee manual can be summed up in one sentence: ‘Use common sense!’”

While those ideas may make “workplace democracy” sound like a new way of casting together current ideas in order to coin a new one, some of the companies on the WorldBlu list actually give employees the chance to vote for their leaders and collectively participate in the decision-making process. At fair trade coffee company Equal Exchange, employees not only get to vote on board members, they can run for seats as directors, giving them the opportunity to vote on their profit sharing plan and even get rid of their own boss, according to Boston Magazine. At South Mountain Company, a homebuilder on Martha’s Vineyard, any employee with a five-year tenure at the company gets an ownership stake and a seat on the board.

Fenton envisions WorldBlu as a sort of Great Places to Work Institute—the members of the list are determined through employee surveys she provides, just as the GPTWI helps Fortune produce its annual list. The question, of course, is whether Fortune 500 companies will ever clamor to be known as “democratic” in the same way they like to be known as a great place to work. While they might want to tout their collaborative work environments, their informal, fun office atmospheres, and their decentralized organizations, Fenton admits managers she talks to can get pretty distressed at the the anarchy that could result from everyone getting their say, much less any kind of voting for leaders. Wonder why.

Of course, employees voting (beyond whatever miniscule say they have as shareholders) for managers or directors in public companies won’t ever likely catch on. Even huge institutional shareholders have a hard time making an impact on board elections, much less easily nominating their own candidates. While current debates over proxy access and the counting of broker votes may account for some progress, corporate governance is hardly a democratic process.

Still, some of the issues Fenton raises for running the internal workplace more democratically—more transparency, more fairness, more choice—are worth considering, if not brand new. What do you think? Can a workplace be a democracy?

Reader Comments

Thomas

September 6, 2007 11:25 PM

Great question! Let's not have any delusion of who makes the rules in any company: the owners. It's not a form of social government but an entity whose ultimate purpose is to make money. The real question is how much control the owners are willing to give to employees who work there. Whether it's none or 100 percent doesn't matter conceptually. What's important is how adjusting the knob will help the cash registers ring.

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