Machiavelli as Manager? Image via Wikipedia

Harold Jarche has a challenging post about the future of management and the future of work at his site: Enterprise 2.0 and Social Business are Hollow Shells without Democracy.

Are the future of work and the future of management inherently democratic?  Will we have democracy or rather an enlightened aristocracy?  The point is not theoretical or philosophical for its own sake. The question has a deep resonance in how organisations structure themselves, how workers understand themselves, but most importantly, how workers engage with the organisation.

In one sense, a truly democratic organisation is a recipe for a disaster.  Studies have shown that the more people involved in a decision, the worse it becomes.  On the surface, this sounds anti-democratic and in a sense, it is. However, democracy is rarely effective when it is a direct democracy on a large or fast-moving scale.  Instead, large organisations rely upon the representational model.  Thus, decisions may be made by a few, but scrutinized and ratified by the many.  In that sense, one can say that organisations can be democratic.  Yet, how many even reach that level?

Jarche is correct that most firms are run like a tyranny in terms of their communications systems. However, only the truly dysfunctional ones are tyrannical.  For example, Enron was more a tyranny, because the leaders enriched themselves. There was no corporate common good. Instead, the organisation’s corporate culture created the perverse incentives that made it happen.  Unlike Enron, most organisations are run closer to an oligarchy where the senior management benefits and passes down the privilege and the patronage to make the system work, within their fiefdoms.  What social media allows, and the web 2.0, is that the oligarchy can be challenged.  The question is now whether a meritorious aristocracy, democracy properly understood (see below) with a representational system can replace the oligarchy.  An alternative is to have a democracy in the worst sense of the word that is without structure or leadership. In that realm, the organisation would react to the whims and appetites of whatever the majority is on any given decision.

The following is an example of what a pure democracy may look like in an organisation.  The DWP developed a “game” or an “internal market” for deciding on how to allocate resources to “good” or “innovative” ideas that would save money. The people who proposed ideas would have their idea voted on and supported by others within the organisation.  Through a complex (but not complicated) system of decision-making, the idea with the most votes would be selected. Although the focus of the “game” was to develop innovative ideas, the same principle could be used on any major decision facing an organisation.

Two things are readily apparent in such an approach and do not bode well for democracy flourishing in the workplace unless work is radically transformed.  They relate to the problem of change and why change usually fails those who benefit and opposed strongly by those who have the most to lose support it lightly.

Machiavelli expressed it well.

And it ought to be remembered that there is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. Because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new. This coolness arises partly from fear of the opponents, who have the laws on their side, and partly from the incredulity of men, who do not readily believe in new things until they have had a long experience of them. Thus it happens that whenever those who are hostile have the opportunity to attack they do it like partisans, whilst the others defend lukewarmly, in such wise that the prince is endangered along with them. (Machiavelli, Prince Chapter 6)

First, the senior managers have to trust their staff.  How many organisations are like Capgemini and allow internal microblogging to allow staff to communicate with immediate constraints?  For most managers, this would be a frightening experience as staff, perhaps with more ideas and talent, could quickly emerge.  Their place, gained in the previous years by obeying the rules, would quickly be undermined. They would be at a disadvantage.  Immediately we see an institutional constraint on the embrace of such technology.

Second, the approach assumes that the workers are ready to produce new ideas and new ways of thinking.  To be sure, there may be ideas within the staff, but if the culture has been deeply embedded and staff are not encouraged to raise ideas or “challenge” then no amount of technological change is going to change that culture.  As I suggested elsewhere, the fish rots from the head. By that I mean, the senior management have to set the tone or the overall culture.  If the culture is one where staff are told their ideas and that anyone suggesting alternatives or “challenging” the status quo is “punished”, then there is less likely to be an intrinsic desire to put forward new ideas.  In much the same way that the democratic ethos had difficulty emerging in post-Communist states because people did not know what they could suggest or act upon and whether the “authorities” or the “structure” would stop them.

I am not suggesting that grown people are destined to act and to be treated as children.  Instead, I am trying to suggest that change is not simply going to come about because someone suggests or even models a “democratic” workplace.  Instead, the change has to come from senior managers encouraging staff to “challenge” and staff being ready to “challenge. When that occurs, one sees a “democratic” culture.  Yet, maintaining a democratic corporation is probably as hard as maintaining a democratic regime.  History, even modern history, is strewn with examples of failed democracies where those who were to benefit (the people) were less likely to support, as those who were to lose the most (the ruling group) were unified and vehement in their opposition to it.

So what remains?  What appears to be emerging is the true virtuous corporate regime.  An aristocracy of talent seems to be emerging. In this approach, organisations are designed to support specific talents. They will replace outmoded systems that are designed around organisational hierarchies built upon authority.  In political philosophy, the argument from authority is one of the weakest arguments and a poor basis for acting within a democracy.  Perhaps what we are seeing is what Leo Strauss called the Democracy as an Aristocracy. “Democracy in a word is meant to be an aristocracy which has broadened into a universal aristocracy.” As such, are we seeing the emergence of an organisation that can nurture the aristocracy of talent? It may be that the organisation “disappears” as an agent and is there to support talent.

The model may be closer to a university. Yet, the new organisation will work a faster pace and with less respect for authority and more respect for demonstrable success and talent.  We can reverse this vision to look at how universities and businesses can converge. If universities embrace this organisational approach, they may be able to ensure their success.  However, one caveat is that a university structured in that way would stop being a university in which knowledge for knowledge sake is pursued.

I think that this will be the organising principle for organisations but the question is who will operationalize it?  How will it be operationalized? Is, or was, Apple the closest embodiment of this idea? Did it really work that way or was it, too, just a hollow shell professing to be democratic?

If the command and control hierarchy is simply an outgrowth a communications problem, then will better communications systems change that?  No. In reality, it is not a problem of a communications system.  Instead, it is a failure to develop a culture that communicates critical (negative) information upwards. A democratic organisation can deal with bad news, a tyrannical organisation cannot.  As a result, the communications problems get worse because no one wants to be the bearer of badness. At the same time, more rogue employees emerge because no one is willing to control those doing what is wrong. Why? They fear to communicate that bad news upward especially if the “rogue” appears to be succeeding.

We are on the dawn of a new organisation. It remains to be seen who has the vision, the will, and the resources to found the new modes and orders.  Can we usher in a new era where an aristocracy of talent works together? On the other hand, are we destined to be caught and captured by path dependency continuing to suffer under arguments of authority?

Whoever can found this new organisation will reap the rewards and found a new era in business.

Related articles

• Enterprise 2.0 and Social Business are Hollow Shells without Democracy (downes.ca)
• Reducing the Deficit: Leadership and the challenge of deficit thinking in management (thoughtmanagement.wordpress.com)
• An extreme political camping trip or renegotiating the social contract: thoughts on Occupy Wall Street (lawrenceserewicz.wordpress.com)