What kind of company is considered a good company (a democratized company is a good company)

Author: Alexis de Tocqueville
Publisher:
Publish Date: 2005-12-01
Features: The great 19th-century American philosopher and observer, Alexis de Tocqueville, after deep reflection, recognized: "I cannot help but think that the institutions we call essential are often merely those we have grown accustomed to. As for forms of government in society, the possible categories are far broader than what people living in different societies can imagine." Tocqueville may have been constantly thinking about the problems of contemporary corporate organizations. We are accustomed to the structure, management, and operational methods of modern enterprises, but there are still more possibilities. When I was talking to a senior executive at British Telecom (BT), Tocqueville's words echoed in my ears. That senior executive at BT asked me the following question: "Can you imagine explaining such a scenario to children in 15 years: Every morning, many people board a train, endure a grueling journey, and then surge out at another place. After a day's work, they will take the same train back, day after day, every day? How outdated will that sound?" What Makes a Good Company aims to help businesses grasp the various possibilities that are within reach but currently unattainable. This is not an isolated or idealistic call to action. Like their philosophical predecessors, contemporary philosophers such as Warren Bennis, Charles Handy, and Peter Drucker have noticed the variability of organizational life and have drawn far-reaching conclusions. A thread connecting their thoughts shows that creating economically prosperous, passionate, thriving, and stable organizations is within our hands.
Warren Bennis pointed out: "If managers and scientists continue to collaborate on revitalizing corporate organizations, they might create organizations that are truly delightful—this is entirely possible." Can we really create "delightful organizations"? Those that are not motivated by our loyalty to the organization but by the fact that children can fully develop their potential and that we are willing to let our children work for them? In my view, the stern test lies in whether you want your children to work for the company you work for, or more precisely, the company you currently lead. If your answer is a resounding "no," or even a contemplative "maybe," then the challenge you face is particularly severe. I believe that each of us can become part of an organization that motivates us to unleash our talents. What kind of organization would this be, and what principles would determine it? A thread running through the works of Charles Handy, Warren Bennis, and Peter Drucker, though valuable, is difficult to articulate—it is "democracy": individuals actively engaging and participating in organizational affairs, where everyone has a choice, and shared goals tightly bind everyone together. Although "democracy" has a long history, I believe we can still relive and reinterpret its essence—the civic consciousness and spirit of participation that gave life to ancient Athens and revitalized its innovative spirit. We can still recreate the sense of time and space and the valuable exchanges and reflections that once existed on the broad avenues of Athens when Socrates and Plato strolled through the city, or rediscover the insights of free democratic philosophers. John Stuart Mill, who deeply understood the necessity of individual autonomy, described it this way: "When people wholeheartedly address problems that affect themselves and the collective, energy is unleashed, and creative solutions and successful strategies may emerge." In corporate organizations that follow the thoughts of Plato and John Stuart Mill, we see the emergence of a new way of viewing people and their roles. We have the opportunity to pursue the cause that philosophers and observers have long dreamed of for centuries. Compared to any other time in history, there are now more opportunities to create "democratic companies." Over the past decade, we have increasingly seen that due to globalization, fierce competition, and ever-increasing customer demands, the structures of many companies have become less hierarchical, the hierarchy less rigid, and there is greater mobility and a focus on practicality. The collapse of hierarchy has provided fertile ground for creating more democratic ways of working. But in addition to these forces, I believe there are two other forces that have triggered the core ideas of this book.
First is demographics, more precisely, the era when the X and Y generations are taking over the workforce. They are more willing to maintain an adult-to-adult relationship with the company, while possessing self-determination, autonomy, and professional expertise—all of which contribute to the establishment of "democratic companies." Due to the rapid advancement of science and technology, this transformative force is now accelerating. Technology may recreate certain environments similar to ancient Greece, as it can compress space and enable people to share information and knowledge quickly and directly. This creates broad opportunities for individuals to showcase their talents, gain autonomy, and develop self-determination.
Although demographics and technology can accelerate the realization of democratic companies, to create "democratic companies" and truly seize this opportunity, we need clarity, judgment, broad perspectives, and clear pathways. Clarity is essential. While we may admire the civic consciousness and creativity of ancient Athenian citizens, we must remember that their efforts were supported by thousands of slaves, and they lived in a society with strict limitations on women's participation. While we may find John Stuart Mill's aspirations refreshing, we should also remember that most of the working class at the time suffered brutal exploitation. We must establish a democratic goal that originates from the essence of a long democratic history but whose framework can exist independently within an economic entity and can be implemented in the realities of corporate life. Therefore, clarity is crucial.
I have clarified this understanding by identifying six principles of democratic companies:
1. The relationship between the organization and the individual is an adult-to-adult relationship.
2. Individuals are first seen as investors who can actively develop and utilize their human capital.
3. Individuals can shape their own characteristics and express their unique qualities.
4. Individuals can participate in choosing their work environment.
5. Some freedoms enjoyed by individuals cannot be at the expense of others' interests.
6. Individuals are responsible and accountable to both themselves and the organization.
Judgment and perspective are equally important. To create such delightful organizations, we must know how to transform these democratic principles into daily realities. To do this, I conducted field research on these six democratic principles in seven large companies. The results showed that the principles of "democratic companies" have indeed become part of the processes, culture, and management of some companies. They are self-contained and practical. The results also showed that other companies are still firmly entrenched in bureaucratic command and control or in a state of laissez-faire under the "temporary committee system." For many companies, to become "democratic companies," they need to design a new organizational blueprint.
Although a democratic system exists for the benefit of individuals, it also benefits the institution or organization. My research on "democratic companies" began with the experiences of three individuals whose companies were implementing one or more of the principles of democratic companies. Only through the lens of individuals can we truly understand their rights and responsibilities. From the perspective of individuals, we learn about their commitment to individual rights and the democratic measures and procedures implemented in their companies. We see the democracy within the company and how it works in daily life. However, these vague understandings are not enough to design a blueprint or to forge a democratic path. To practice the six principles of democratic companies, we need to design a blueprint with three related sections.
The first section is designed for the responsibilities and roles of individuals in "democratic companies," with the core concept of individual autonomy: the self-awareness of members of the company; the ability to see themselves as investors and persistently develop their human capital. For both employees and the company, the autonomy of employees and their ability to maximize self-initiative have great practical significance.
The second section considers the obligations of the company, designed for organizational diversity: the ability of the company to provide space for those who want to excel, respond actively, and be responsible, as well as the ability to create an innovative and adaptable work environment. I identified eight aspects of creating space and exercising choice. For each aspect, I identified a company that is at the forefront of creating space and exercising choice.
The third section combines the role of the individual with the role of the organization, creating a "container" that constrains individual life. In ancient Greece, this container was the city-state and the challenges it faced. In a democratic state, this container is the state, with its boundaries clearly defined and understood. However, the concept of this container is more complex for a company. In "democratic companies," individuals have autonomy and self-determination, and the key role of the organization is to provide space and opportunities for choice. But if that is the case, what holds "democratic companies" together? What prevents them from becoming a loose group that demands high prices for selling skills? This is the "inclusion" issue addressed in the third section, one of the main challenges facing corporate democracy. I call it a shared goal: a common goal that all individuals in the company strive for, acting as a constraint on all company activities; under its constraint, the responsibilities and obligations of individuals become part of the organizational mechanism; trust generated throughout the organization permeates interpersonal relationships among individuals.
Individual autonomy, organizational diversity, and shared goals form the three sections of "democratic companies." But as individuals, what can we do? What benefits will our actions bring to ourselves and our organizations? The latter part of this book addresses these questions. To push your company toward a democratic path, you must take action immediately to address these issues. You can start today by clearly expressing and sharing democratic ideas with employees or by working on becoming more autonomous. You can guide, nurture, and support the autonomy of others through leading by example. You can build the second section by clearly stating your views on diversity within the company and creating opportunities and spaces for yourself and others, enabling employees to actively engage in their own transformation. Finally, you must play the role of a shared goal builder, clearly articulating the company's goals and your role in them, setting specific goals, and accepting the responsibilities and obligations you and others owe. These are the actions and obligations of democratic individuals.
"Democratic companies" are places where individuals who strive and are determined to fulfill their obligations to themselves and others gather. For companies that support and uphold these six principles, the journey toward democracy requires full focus and persistence. This means the organization must unwaveringly support the autonomy enjoyed by individuals. It will require the organization to persistently create opportunities for choice and freedom. It will force the leadership of the company to face the true challenge of carefully crafting and widely disseminating a sense of shared goals. Why should we go to such lengths? What benefits will this bring to individuals and the organization? As the scenarios gradually unfolded in this book show, we have painted a harmonious picture with democratic values. From the perspective of corporate organizations, I have a reasonable belief that implementing democracy will bring three major benefits to the organization.
First, companies like British Petroleum (BP) and McKinsey have become agile overall due to their encouragement of individual employees to develop flexibly and autonomously. This is the "swift as swallows" described by Rodney Chase of BP, meaning individual employees have the ability to quickly seize new opportunities. Second, companies with a sense of responsibility and purpose will have members with a sense of responsibility and purpose. As British Telecom discovered, the participatory and decentralized nature of democracy will cultivate a strong and lasting unity between individual behavior and company goals. Finally, as the leaders of AstraZeneca discovered, these democratic principles create a wonderful platform that integrates different specialties. When the company and employees establish an adult-to-adult relationship and all individuals can participate in choosing their work environment, this lays the foundation for rapid and successful integration.
However, the beneficiaries of democracy are not only corporate organizations. As long as we become members of companies that support democratic principles, each of us has the opportunity to achieve success and add meaning to our careers. How is this possible? First, when we work in institutions that give us autonomy and a sense of shared goals, each of us will feel more willing to commit, be passionate, and be energetic. This is the moment of "ebb tide," when we are determined and dedicated. This is a precious moment for each of us. As we will see, as employees of companies that support these six principles, we are more likely to experience such moments. Many people feel disconnected from the organization. They often feel unfairly treated when others receive "extra benefits" that they cannot share, or when they cannot fully understand certain decisions. In such situations, our relationship with the company becomes tense, and it may even break. Companies that follow these six democratic principles and support individual autonomy can create a highly transparent environment where everyone is treated fairly and justly.
In summary, "democratic companies" have the potential to create a win-win relationship between individuals and the organization: individuals do not benefit at the expense of the organization, and the organization does not benefit at the expense of individuals. "Democratic companies" can serve as a guide for how organizations should develop and a touchstone to test whether you should join or stay with a company. The choice is yours.