It is said that democracy has many failings, but is still recognised as being better than all other methods of governance that have been tried. One of the largest challenges of the 21st century is to find correct levels of accountability – in all walks of life. Children appear to be less accountable to their parents and authority. Governments appear to be moving away from accountability for their actions.
Corporate companies riding the excesses of the past two decades are also seemingly beyond the reproach of stockholders, customers and their workforce. Banks are the latest institutions to come under the scrutiny of politicians, the press and public as to their seemingly cavalier attitude towards being held accountable for conducting their affairs in a right and moral way.
More and more companies appear to be displaying a complete lack of accountability towards their customers. It is arrogant, blind and short-term for a company to assume their autocratic approach to business is above criticism. If the bosses are convinced that ‘they alone know best’, it is fruitless trying to force them to listen. They are performing the business equivalent of running blindfold around a room full of glass shards and razor wire where everything appears fine – until you are suddenly cut to shreds.
Companies are, in theory regulated by their shareholders, but it is probably clearer than ever before that the power of shareholders is far too weak when trying to force a moral or radical re-think at board level, particularly when individual board members benefit from bonuses and options.
Outside organisations and institutions such as environmentalists or lobby groups can have a degree of influence over corporate giants, and maintaining a good public image is still important to companies. However, most large organisations usually remain un-phased by outside pressures, believing they can forge their own path regardless of external accountability. It is easy for a company enjoying power and size today, to forget how history is strewn with once mighty and now fallen bastions of corporate industry.
A long term game plan
Some companies do display an impressive sensitivity to what others think and this is often linked with a keen interest in the well-being of their own workforce. They also tend to have a long-term view for the business, and plan accordingly. These organisations are far more likely to run the course, continuing to succeed where others fail.
One or two companies have addressed the issue of internal accountability extremely well, by placing themselves in a position of co-operatives or co-ownerships with their employees. The results of these partnerships are clearly demonstrated in raised productivity, more loyalty and a higher commitment from their employees who clearly feel valued by their business.
Profit sharing schemes make this reward more tangible to the workforce when good business results are shared between everyone who has contributed towards them. This process underlines to each individual that their efforts make a difference to take home pay, to the future success of the company and subsequently their own job security.
Sharing accountability and devolving power
The John Lewis Partnership, the high street retailer and grocer, is one such organisation. They employ over 60,000 ‘Partners’ who share in ownership of the business including an annual bonus, which stems from a share of the profit made during that particular year. What is more unique about this company is the democratic structure it upholds, allowing representatives of the workforce to voice an opinion on management decisions and performance.
Represented employees have no individual voting rights, as there has to be a certain freedom within any company for managers in overall charge (and holding the greatest understanding of the business) to take decisive action. However it is widely recognised that those taking toughest and most strategic decisions at the top of the structure do so against the background that they are far more accountable to their workforce.
‘Democracy gives to every individual the greatest amount of his own way, the greatest freedom – consistent with the rights of others’, said John Spedan Lewis, founder of the John Lewis Partnership
Democracy delivers
The democratic process can provide a deeper collective understanding of issues faced by the business, and following on from this, a higher percentage of collective agreement for any proposed course of action. I term this quite simply as the essential process of engaging individuals’ hearts and minds. Even in the worst case if they do not agree with a decision or proposal, they have been involved. Yet a truly democratic process must go further than involving people in a process. I believe it is essential to embrace these two very important leadership issues when running a democracy:
1 – The aim is to create unity through democracy. It is not just paying lip service to your staff, allowing them to voice their opinions. Uniting everyone through this process is worth so much to your company in terms of co-operation and generating a real team spirit.
2 – The initiative is yours. This process demands a real effort from leaders to ensure their managers inform, persuade, share and explain so the right discussion takes place, and people see the need to support all business decisions. Being democratic demands active, not passive management.
Remember, we’re not talking about a process here, we’re discussing the censuring the engagement and commitment of real human hearts and minds in supporting your business to the utmost of their abilities. Every effort you can make to ensure the highest level of commitment, and performance from your team is surely worthwhile. Democracy does deliver greater success!
