Dear Traci
Congratulations
At the same time, are you aware of the intrapreneurial movement which my
father helped to co-develop Gifford Pinchot with his article in The Economist
back in 1982 http://www.normanmacrae.com/intrapreneur.html ?
Regarding transparency: we are exponentially compounding one hell of a system problem that see-through organisations most appropriate for sustaining service economy have not been supported for reasons that include:
shareholder value analysis has been corrupted ; its actually speculator
analysis ; the last thing it cares about is a company improving over time for
anyone
several big professions have joined in (knowing or unknowingly and its
certainly true that blindness by numbers dates exactly to the introduction of
the spreadsheet when all decent market tresearch and innovation methods were thrown out if they incoveniently sugested local societied didnt want what a globalising company wanted to control) this corruption- principally global accountants who did not want their audit monopoly challenged by the inconvenient truth that even in a service economy they are stuck with permitting investments in machines but never in people (who have to be booked in as costs to cut); mathematically Brookings & Georgetown Law School confirmed in 2000 that leadership teams of
large organsiation have no information relevant to waht compounds 90% of why
their comapny's valuation will head up or down; this research was released
before Andersen obliterated itself demonstrating just how little it understood
about value of an organisation that loses all the trust of society; hardly
surprising that so many dot comns burned give the wrong maths their chief
accountanting firm was ordering them to lead with
So as far as I can see everything that organisational democrats and
intrapreneurs argue for makes sense for everyone apart from:
speculators
-a few bosses who might find becoming facilitators difficult
a few corrupted professional segments which includes:
*global accountants who want to protect their monopoly with the baord
*those lawyers who have requotred CREO's job to be about chasing historic
numbers
*ad agencies who have done a deal with accoluntats to value the brand as if
its all advertising: all image no reality
*part of the knowledge management industry that wanted to seell in machines
etc
Can you tell me:
do you agree with the above diagnosis or have you a different one? If you have
a different one, what's it basically about?
cheers
chris macrae
301 881 1655
http://exponentials.blogspot.com -is any of the 21 humanly most important glopbal markets sectors sustainably directed (valued around) making life better any more?
http://civil-society.blogspot.com
Hello Friends,
On Tuesday, I gave a lunchtime talk at the Berkman Center on Internet and
Society at Harvard University's Law School. They have it posted as a
podcast, so if you'd like to take a listen to what I have to say about
organizational democracy and the future of work (instead of morning radio!),
I invite you to click below. It's about 25 minutes long.
http://cyber.law.harvard.edu/audio/podcast2?wid=12&func=viewSubmission&sid=8
5.
I spoke at Harvard at the invitation of David Weinberger who is also a
fellow there. David is the author of a couple books including, The
Cluetrain Manifesto. He also gave an incredible opening keynote at the
WorldBlu Forum in October. He blogged in real-time about my presentation on
Tuesday which was also attended by friends from the WorldBlu Forum (Susanne
Goldstein, Stephen Shapiro, and Erik Muten. Great to see you all!). You can
read David¹s summary below.
I would love to hear any thoughts, comments, feedback you made have to share
after you listen ~
All my best,
Traci
-------------------------------------------------
http://hyperorg.com/blogger/
David Weinberger¹s Blog
[berkman] Traci Fenton on organizational democracy
Tuesday, June 13, 2006
Traci Fenton, founder of WorldBlu.com, is giving a Berkman lunchtime talk
about organizational democracy. Excellent turnout, especially for the most
beautiful day of the year. I'm especially glad to see that Traci has drawn
first-timers, from union reps to workplace managers, in addition to the
usual Berkpeople. [I'm paraphrasing throughout this post. As always.]
She says: In a democratic workplace, people get to decide which projects
they work on and have access to the financial info about the company. This
is the case at the GE Durham plant ‹150 employees and one manager. They make
jet engines. All future GE plants will also use a democratic working style.
Organizational democracy = "democratic principles applied to a business
context." She cites Drucker, Wheatley, Senge, Hock, Semler, Collins,
Fairtlough and Bower as sources of the idea. It's not about everyone voting
but everyone having a voice. It's about operating out of freedom, not fear.
Peer-to-peer, not paternalism. Humility and resolve vs. ego. Transparency
vs. secrecy. Fluid networks, not hierarchy. It can become the norm, she
says.
David Isenberg points out that the managers at GE (for example) get paid
disproportionately high. How does this growing gap fit with the idea of
democratic organization?
Traci says that people are rebelling against this. Whole Foods, for example,
caps the disparity. Fairness is one of the characteristics of organizational
democracy. GE overall suffers from the disproportion, but GE Durham does
not. She points to other companies, too fast for me to keep up, except for
Southwest Airlines...
Why should any one care? Context, cash and change.
The business context is changing because of technology: Employees have a
voice on the Net and want one in business. Also, there's been a reaction to
Enron. And more of the world lives in democracy. And Gen X and Y have
different expectations about work. And there's a search for meaning going on
(embracing our humanity). She says we're going from the industrial age, to
the information age, to the democratic age ‹ networks, engagement,
individuals...
Semco in Brazil flattened its hierarchy, gave employees a say in decisions,
started job rotation, let people choose their boss, and let people choose
how to be paid (e.g., hourly, by goals, royalties, etc.). As a result, their
sales doubled, they launched 8 new products, and revenues went up 35%. Traci
says that within this freedom, there is a tremendous sense of discipline.
This happened because Ricardo Semler, the owner (his father founded it), at
25 was killing himself with stress.
Organizational democracy leads to more cash because it increases engagement.
A Gallup poll showed that 73% of US workforce is not engaged by their work.
Five years ago, that was 54%. This drives down revenues. Organizational
democracy increases retention, increases efficiency, increases competitive
advantage...
Organizational democracies have a positive ripple effect on their
communities, decreasing corruption and increasing peace and stability.
WorldBlu wants to build 1,000 organizational democracies by 2020.
Q: People have been saying this for a long time. What's the resistance?
A: People don't understand how. Business leaders freak out because they
think they have less control. I tell them they're just giving up the
illusion of control.
Q: People running the companies would have to give up a substantial amount
of money personally.
A: At organizational democracies I don't hear people complaining about the
money piece.
Q: Does this work for low-skill or only for high-skill?
A: Atlas Container makes boxes. The average worker hasn't finished high
school. But they're run democratically. Everyone knows what it feels like to
be disengaged.
Q: (me) Is this a cultural change or can it be done incrementally?
A: It usually starts at the top, although I've blogged about how a junior
employee can get involved. It can be rolled out at various paces.
Q: At GE Durham, people divide into teams and are given quotas. The team
decides how many hours they're going to work, they cover for each other, and
suddenly they're peer-accountable. I got the religion when I heard that.
Q: What's the role for labor unions?
A: [Union organizer in the audience] This kind of model can work with the
union. It seems like a natural pairing.
Q: Is this equally appropriate in rising and falling industries? And how
does this play out with globalization and outsourcing?
A: I don't know. How do the ethics of capitalism and the ethics of
organizational democracy work together?
A: [audience member] Outsourcing can increase the knowledge work done by the
people in the home plant.
Q: Are the outsourcers part of the organizational democracy? [Ouch!]
Q: Are these principles transferrable to very fluid industries where the
parameters are changing rapidly?
A: Pandora is a startup using organizational democracy. It allows a company
to adapt very rapidly.
Q: What's your advice to new companies that want to start out right?
A: It's not a matter of having standard processes that can be put in place
but in adhering to a set of principles. At Gore, they use a lattice
structure where everyone is related to everyone else. They share knowledge.
"You have to find an answer that works on the scale you're at."
Q: What are the most common problems democratic organizations face?
A: At Pandora, the make-your-own-radio-station, people feel so engaged that
they can be over-confident about the value of their participation.
Q: There are parallels between organizational democracy and the organic
movement. The organic movement got coopted by the FDA. How are you working
with large organizations so that the concept of org democ isn't diluted?
A: You are in my head. We're working on some proprietary tools that we hope
will create a standard.
Q: Seal of approval?
A: There can be a backlash to that.
Q; Saturn seems to have gone from democratic to undemocratic.
A: At one company, they axed the CEO after the company missed one quarter,
and the board brought in someone with a command and control background. I
asked the old CEO if the employees had the strength to go forward. He said
that there aren't other job oppportunities. It's unresolved still.
A: I love the idea of org democ, but it seems like it only works so long as
the guys at the top say it's ok.
Q: Yes and no. The movie The Take is about workers in 200 companies in
Argentina demanding organizational democracy. Southwest Airlines also
survived the replacement of the CEO.
Q: Why would the board care so long as the company is generally delivering?
I something else going on?
A: Probably.
Q: Is one of your 12 qualifications having a certain percentage of staff on
the board?
A: We don't have set policies or processes. We recommend the adoption of
principles. The Orpheus orchestra in NYC has no conductor. But their board
doesn't get it.
Q: (me) To what extent does the lack of democracy have to do with the fact
that most companies are run by men?
A: Male CEOs who can run their companies democratically have this wonderful
balance of the masculine and the feminine. They don't have anything to
prove, which is an important characteristic of leaders and workers in
democratic organizations. Democratic organizations need a blend of
compassion and discipline.
Q: What happens if the workers don't accept change? Suppose they just want
to follow rules?
A: A democratic company is not for everyone. Employees need a high degree of
self-knowledge and confidence. Sometimes people have to leave companies that
make the transition.
Q: I think this would work better in America than in some other countries.
For one thing, when you're responsible, you have to manage stress.
A: I don't believe it has to do with culture. I think it has to do with the
type of person you are.
Q: Does this work better for particular sized companies?
A: Smaller companies frequently are democratic just naturally.