Wednesday, March 26, 2008

Democracy

The origin of the word democracy comes from Greek (Δημοκρατία) and its literal translation to English is "rule of the people". Indeed, this translation guides us on what democracy really means.
A business organization is no democracy. It is ruled by the shareholders and their representatives, and is managed by a small group elected for that purpose. The managers are those to make decisions and not "the people".
Winston Churchill said once that "democracy is the worst way for ruling, expect for all other ways that were already experienced". As other things said by him, this is a wise sentence. Even though democracy is not a good way to rule (a country), other ways are worse.
Usage of the term democracy has expanded and does not serve us only in the political region. We use it in many other cases as a way to speak of taking decisions based on the majority.
Many times we ask ourselves why don't we succeed in building the same atmosphere of will and passion in the organization as people have for home, friends, sports and other topic outside the office. The issue has many perspectives. Let us look, for example, on Blogging. We see people Blogging and collaborating outside work, much more than in. I am cautious. This is not an issue of white and black. People do not suffer in work. It is not a situation, I hope, in most organizations that people do not like the place in which they work. Yet, there are differences between the office and outside it, and there place for improvement. The more we are a place that our employees want to come to every morning, the more they stay (and that for itself is worth a lot). But more important than that, if people like the place they work in- they perform better.
Enabling people to take decisions indeed helps. We like to be involved; we like to have influence on others. This is reciprocal: the more the organization enables employees to be involved and to influence, the more they give back from themselves.
Yet, let us remember that we are a business; a place with defined business goals. Making decisions based on majority can contradict with shareholders favor. The process of taking decisions, involving many people, takes much more time, than if a small group only is involved.
Many organizations, find therefore, other ways for satisfying their employees, and leave democracy out of the organizations door.
However, it is important to understand, that the benefits of sharing in the process of decision-making, go far beyond involvement and good feelings of employees.
Professionally, it is better to take decisions asking many people. This is the wisdom of the crowds. This term, was coined by James Surowiecki
back at 2004. He wrote a book by this name. From the full name of the book "The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations" we can understand the relevance to our topic- democracy of decision-making. Consulting more people- brings better results. We have learned this from Wikipedia, that turned to be the leading Encyclopedia wide world and we can learn this from many experiments that people and organizations have performed comparing the wisdom of experts and the wisdom of crowds. Every time we are surprised again to see that in most cases crowd beets experts.
The bottom line: It is beneficial for organizations to involve employees when taking decisions.

When and how?
In decisions that are related to new ideas for strategic moves;
In decisions related to forecasting market trends and wills;
In organizational decisions related to the people as a group (where there is no conflict in interest between the people, or between them and the organization);
When designing user interfaces of products;
Were brainstorming is needed in order to understand a problem or suggest solutions.

The criteria: Where information is not classified; where quality is essential; where it is worthwhile comparing to resources (time, cost); where our future lies.

I, as the owner and manager of a company, got use to, in the first years of the company, to decide on my own. As time passed, I learned to involve larger groups of people. The sharing may take many formats: sometimes as the first stage, sometimes in consulting on the way, sometimes in openness to changes- after. In some cases, the group is larger, in others, two or three people take part, No one recipe.
The name of the game, as in many other issues is working gradually; of course if wanting to change an existing organization.

The personal indecision is always there: fast versus comprehensive; wisdom of experts versus wisdom of the crowds. We, as managers have to decide- when alone, when with small group, when as democracy.
On the end of the day, we will be those to pay or profit. We will have to be responsible. Responsibility is no democracy. It remains ours.

Yours,
Moria

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