Enterprise 2.0 and Social Business are Hollow Shells without Democracy

A guiding goal in much of my work is the democratization of the workplace. Democracy is our best structure for political governance and I believe it should be the basis of our workplaces as well. As work and learning become integrated in a networked society, I see great opportunities to create better employment models.

So is it possible to have Enterprise 2.0 or a Social Business without a democratic foundation? Is the employer/employee relationship the only way we can get work done? In describing Enterprise 2.0, Andy McAfee, who originated the term, says that our work structures will not change:

No, it’s not the death of the hierarchy, of the manager, of the org chart, of the job description, any of that stuff. Some of my colleagues who are interested in this phenomenon, I think take it a bit far, and they become zealots for the manager-free, hierarchy-free, gestalt organization. I don’t think that’s smart, and I don’t think it’s likely, and I don’t think it would be a good idea.

Everything we’re talking about is totally compatible with an official chain of command in a hierarchy. You still need someone to set direction and give marching orders. But the idea of input by many and decisions by few is a pretty powerful idea.

Perhaps hierarchy is a major part of the problem, though. Thomas Malone, in The Future of Work (2004) envisaged four potential organizational models for the network era:

Loose hierarchies
Literal democracy – voting for your boss
Outsourcing through specialized guilds
Markets within organizations

All of these are democratic to some extent. Malone wrote that we need to move away from Command & Control and toward a Coordinate & Cultivate management model. Is that possible without democracy?

Democracy is a work in progress, as we know from history, and the first step is commitment. David Korten in The Great Turning, described America, the Unfinished Project:

Democracy is neither a gift nor a license; it is a possibility realized through practice grounded in a deep commitment to truth and an acceptance of the responsibility to seek justice for all.

Commitment to democratic principles is often lacking in descriptions of Enterprise 2.0 and social business. Without such commitment, I think these initiatives will be seen in hindsight as just another management buzz-word. In 2008, some of the best known management experts were brought together to “lay out an agenda for reinventing management”. Their main premises were that:

1) management models are important social technologies;

2) the current models are out-of-date; and

3) we need to develop more human models for the near future.

There was consensus that our current management systems do not work and several of their 25 recommendations were based on democratic principles:

  • Redefine the work of leadership.
  • Share the work of setting direction.
  • Create a democracy of information.
  • Expand the scope of employee autonomy.
  • Retool management for an open world.
  • Humanize the language and practice of business.

For management to work in the network era, it needs to embrace democracy, but we are so accustomed to existing structures that many executives would say it is impossible to run a business as a democracy. However, there are democratic business models that work today. Just not enough.

Enterprise 2.0 will not fulfill its potential unless its foundation is more than just web technologies or connected businesses. We need to integrate democratic organizing principles into our discussions on Enterprise 2.0 and Social Business. Without a solid architectural organizing principle, I don’t think the Enterprise 2.0 ship will sail very far.

Bank of Canada:
Shaping the Political, Legal and Social Structures for Democracy and Equality

Self-governance not only works, it works better than command & control. In Management Rewired: Why feedback doesn’t work and other surprising lessons from the latest brain science, Charles Jacobs covered learning, management models and democracy in the workplace. A consistent theme is to let people manage themselves, because that works:

Rather than limit decentralization to the top of the hierarchy, why not drive it down into the organization as far as possible? Modern information technology makes such “radical decentralization” much easier now than it was in [Alfred] Sloan’s day.

Such an approach enables people to control their own destinies. From a Darwinian perspective, it’s aligned with the urgings of our selfish genes. From a market perspective, it’s more efficient and effective. From a cultural perspective, virtually every organizational innovation since the Western Electric Hawthorne studies has been aimed at fostering democracy and initiative in the workplace because it’s good for both people and the business. Moving to an entrepreneurial organization is just the next step.

Democracy can be a competitive advantage. At TEDx Belfast, Mark Dowds provided 8 reasons to democratize the workplace:

  1. Reduced costs
  2. Reduced workforce
  3. Increased productivity
  4. Getting closer to customers
  5. Fewer layers of bureaucracy
  6. Shorter time to market
  7. Increased employee motivation
  8. Increased recognition of employee contributions

Let me close with this note from Gwynne Dyer, who wrote that, “Tyranny was the solution to what was essentially a communications problem“.

Modern democracy first appeared in the West only because the West was the first part of the world to develop mass communications. It was a technological advantage, not a cultural one – and as literacy and the technology of mass communications have spread around the world, all the other mass societies have begun to reclaim their heritage too.

We finally have the technology, so that even business no longer needs to be run as a tyranny.

Image: Bank of Canada

6 Responses to “Enterprise 2.0 and Social Business are Hollow Shells without Democracy”

  1. Lawrence Serewicz

    Harold, I thought you had a great post. Thanks for a stimulating discussion of the future of work and future of management. I have made an attempt at a reply here: http://thoughtmanagement.wordpress.com/2012/02/26/is-the-future-of-work-an-aristocratic-democracy-leo-strauss-on-managment/
    I think that the future of work is more akin to what Strauss was talking about in the true of idea of democracy as a democracy of an aristocracy. Talent will be attracted to organisations that can coordinate talents. In that regard, the organisation will not disappear, but it will be less of an agent than an support and coordinating structure. It will be hollowed out in a sense because it will be constantly shifting with different directors (like an orchestra) brought in to coordinate different talents for different projects.
    This is not to say that everyone will be a consultant, but rather the old style command and control system, as you rightly point out, is ending. However, I do not agree that this is simply a communications issue. I think that corporate culture is more than a communications issues and that is why I have used Leo Strauss to look at how organisations, like regimes, are founded (thus the centrality of Machiavelli to my paper) to suggest that we are on the dawn of a new era. It will be democratic, but democratic of a certain type.

    I would be interested in your views.

    • Harold Jarche

      We’re going through a major technological & societal shift, and as you note, Lawrence, there will be significant rewards for those who can create the new models of work. I think there will be many different models. Management structure is often the only real business differentiator and can be a significant competitive advantage.

  2. lawrence serewicz

    Harold,
    Yes, management structure may be the comparative advantage, but that is problematic in two ways. First, the other advantages are primary (technology, skills, resources, markets for example) and management structure is secondary. In many ways (although not the extent it is cultural) management structures can be copied and replicated most easily. Command and control, for example, is easy to replicate which is why it is so common.
    Second, previous discussions on this site and elsewhere suggest that management is the problem. As Umair Haque suggested no organisation works and others thought that management was the problem. So, if management is the problem, a new management structure is not going to be the solution unless it is one that removes overt management. Yet, even self-management is not sufficient. We need managers once we get beyond 5 people (or whatever the preferred span of control is) simply because of coordination issues and resource allocation issues.
    Now, one can argue that technological solutions through social media may reduce that, to be sure, it can and does (thus the reduced role of the middle manager pace Drucker) but it will not eliminate what management is and does. For example a team without a manager is not as effective as one with a manager (look at any professional sports team for proof of this theory). We can say that sports are different from business, but then professional sports is a business.
    Instead, I would argue that management is now finally coming into its full functionality as intended. Management theory has been generations ahead of the common command and control, but it is only through social media and other technological changes that it can actually function as the theory suggested or promised.
    We are finally learning what management is and what it does. Interesting times ahead.

  3. Rick Ladd

    Hello Harold – As I mentioned in your comment to my sharing of Rawn’s post re the “morality” of Social Business, I couldn’t agree more that “democracy” in the workplace is not merely a precondition for the success of Social Business (or whatever the hell we end up calling it), but that social tools – by their very nature – tend to push an organization toward a flattening, a democratization of its structure. In my experience at a very stodgy, large and famous aerospace corporation, it was obvious to me that many of those in management, from first-line up to C-level, were scared silly of what moving toward social meant to the highly revered (by them, at least) command-and-control structure. Unfortunately, we needed their support in terms of both money and direction in order to move forward as we envisioned. It was not forthcoming, but I just don’t see how they can hold it back. As you point out, it is a significant differentiator; perhaps a disruptor. I certainly hope so.

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