Passing the citizen test

European Business Forum, Autumn, 2003 by Kevin Delany

The Democratic Enterprise

by Lynda Gratton.

Financial Times Prentice Hall, November 2003, ISBN: 0273675281

272 pages

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The Democratic Enterprise is concerned with grasping the organisational possibilities which are now within our reach. Those possibilities centre on the opportunity, indeed the need, to create organisations which are successful in economic terms and which also provide an environment of excitement, stimulation, fulfilment and tranquillity.

Many organisations have experienced, and embarked on, major change over the past decade. Those changes have often been driven by any or all of a number of market forces including globalisation, increased competition, and more discerning and demanding customers. The organisational response has often resulted in flatter, less hierarchical, structures emphasising organisational agility. This breakdown of traditional hierarchies provides the base for the implementation of a more democratic way of working.

Other forces in play are changing attitudes to work and technology. The changing attitudes of individuals at work are reflected in a preference for adult-to-adult relationships with the employer, and for self determination and autonomy. Capturing the opportunities of new technology permits the rapid and direct sharing of information and knowledge. Together the forces create and sustain the opportunity for individual excellence, autonomy, and self-determination. The challenge is to build organisations from the inside out, with people at the very heart of those organisations.

There is evidence in support of Lynda Gratton's proposition from a democracy study conducted as a sub-set of the larger Leading Edge Research Consortium--but the author's messages come to life through the principal and other organisational case studies. The principal case studies draw on the experience of individuals working in three organisations which are perceived to display certain elements of the Democratic Enterprise. The organisations are BP, BT, and McKinsey. None of these organisations is seen as a perfect model, yet this adds to the authenticity and credibility of the message. These are real organisations facing real issues and being recognised for getting a number of things right.

The author frames a particular view of democracy: one that is founded in history but right for today; a democracy that is viable economically and which can operate in the reality of organisational life. Key to this definition are the 'six tenets of democracy'. These are demonstrated most powerfully in the principal case studies following the experiences of particular individuals.

The first tenet is an adult-to-adult relationship between the organisation and the individual, following Theory Y rather than Theory X. BP offers the opportunity for individuals to build their own careers, moving internationally and between functions and specialisms.

The second tenet is concerned with individuals being recognised as investors, with choice over how they grow and invest their personal human capital. In a knowledge economy, in particular, it is the individual who owns his or her talents and resources, and who makes decisions about developing and deploying those resources.

Tenet three follows from Jung's concept of individuation, the capacity of each person to become themselves. The tenet emphasises individuals being able to develop their nature and express their diverse qualities. Each of the three individuals studied are individual citizens but also colleagues and active participants in their own organisations. It is as individuals that they contribute to the broader organisation.

The fourth tenet is concerned with individuals participating in the determination of the conditions of their association. The example from BT relates to the offer to individuals to determine their place, pattern, and hours of work.

The fifth tenet, that the liberty of some individuals cannot be at the expense of others, moves to the heart of many debates about work-life balance in the workplace. Our McKinsey consultant has a young family and wishes to spend less time at work, whether on assignments, evening client meetings, or informally with colleagues. There is a natural impact on immediate colleagues. There is no simple solution but there is a recognition of the need for individual trade-offs.

The sixth tenet registers the accountabilities and obligations of individuals to themselves and to the organisation. The evidence here points to the feelings of shared purpose and reciprocity being much more powerful than traditional rules and power in holding the enterprise together.

Accompanying the six tenets are three 'building blocks'. The first addresses the role and responsibility of individuals, understanding themselves, operating as investors in the organisation, and building their personal human capital. The second considers the obligations of the organisation, addressing the capacity of organisations to provide an environment in which committed people can become the best they can be, and which retains innovation and flexibility. The third unites the role of the individual and the organisation to create the 'container' that frames the lives of individuals. The author labels this third building block 'shared purpose'.