Creating More Perfect Organizations
Sociocratic businesses and organizations set policy by consent and use a governance structure in which each person in the organization is appropriately engaged in making and evaluating the policies that affect their domain of responsibility. Working in self-organizing, semi-autonomous circles, they decide how they will meet the aims of their organization most effectively.
One of the struggles in building effective organizations is finding an efficient and reliable method of making good and timely decisions. In democratic organizations, majority vote is the accepted standard. Majority rule, however, automatically creates a minority. This encourages factions and divisiveness rather than harmony. Majority rule encourages people to build alliances, to trade favors, and think politically rather than scientifically and in terms of the best direction for the organization.
In business, decisions are generally made autocratically by the owner or manager or by a Board on behalf of investors. This can lead to poor decisions because those who execute them may not be free to express their views and thus critical information is not available in the decision-making process. As in majority vote, those who are not included in the decision making may also feel less comitted and thus will not enthusiastically support the organization. Autocratic decision-making also does not encourage leadership.
Sociocracy was developed to correct the deficiencies in both these methods.
The idea of a sociocracy, a self-governing society, dates from the early nineteenth century when the French philosopher Auguste Comte (1798–1857) advocated a society based on a balance of scientific method and humanism. His formulation was closely linked to his concept of scientific method and of sociology, a science he named and is considered by many to have founded.Though Comte's thinking was highly influential on Western European thought, his sociocracy was never more than an idea.
The concept was picked up again by a renowned American sociologist, Frank Lester Ward (1843–1913) in the late nineteenth century. Ward extolled the virtues of the "self-made individual" and the importance of universal and life-long education. He felt that these should be the basis of an ideal society, a sociocracy.
While the ideals of Comte and Ward are in alignment with contemporary sociocratic thinking, one aspect is not. They both advocated a central body of scientists that would in Comte's case be the government and in Ward's, advise the government. Establishing such a body was, of course, impossible and in the end would not be self-governance. While a democracy based on majority rule also had the failings of power brokering, it still held more potential than sysems making autocratic decisions.
The creation of a real sociocracy required both inclusive decision-making and a non-autocratic structure. In 1926, Kees Boeke (1884–1966), an internationally known Dutch peace-activist and educator, began developing a set of principles that did just that -- created an organization based on the equivalence of all particpants and consensus decision-making. Just before WW II, Boeke started a school in The Netherlands where he began experimenting with consensus in what soon became a community of 400 students and teachers. Boeke’s sociocracy was based on three fundamental rules:
"First, the interests of all members must be considered, the individual bowing to the interests of the whole.
Second, no action can be taken if there are no solutions found that everyone can accept.
Third, all members must be ready to act according to these unanimous decisions."
Boeke pointed out that there were many groups functioning by soliciting common agreement rather than voting and that if such a group voted, it would be an indication that the group was not functioning well. Many communities today still function using these same principles. Intentional communities use consensus almost exclusively. But most are small, religiously devoted, or purely social organizations. Consensus as Boeke used it, requires a high level of trust and frequent meetings to discuss and share concerns and solutions. Most organizations are much too diverse to depend on unanimity as a basis for agreement. All their members do not meet together on a regular basis and many never have personal contact. As a broadly applicable method of governing, sociocracy needed further development.
In the 1970s, Boeke’s fundamental rules were refined and expanded by one of his students, Gerard Endenburg. Endenburg finished his high school education in Boeke’s school and became an engineer. When he assumed leadership of his parents’ electronics company one of his goals was to prove that sociocratic principles could work in a corporation. He wanted to create the same kind of harmonious and effective environment that he had experienced in Boeke’s school and missed when he attended the university and served in the Dutch armed forces.
In a complex legal structure like a corporation, sociocracy had to ensure protection of all the stakeholders’ interests, including the investors. It had to be able to guarantee that the corporation would meet all its financial and production goals. It could not be dependent on trusting relationships between all its employees to produce unanimous agreements. Ensuring inclusiveness, productivity, and financial stability in a competitive corporate environment, all at the same time, was a tall order.
Endenburg the engineer was now confronted with the task of organizing people. He knew how to analyze problems and create solutions in the technical language of mathematics and physics. Both the technical sciences and the social sciences used similar words: tension, tolerance, variance, limits, stress, resistance, capacity, dynamics, etc. While he could define these terms precisely as an engineer, he couldn’t define them as a manager. He knew how to steer mechanical and electrical systems, but how could he steer human systems?
Endenburg had studied cybernetics, the science of communications and control first formulated by mathematician and MIT professor Norbert Weiner. Cybernetics taught him to think by analogy: take a solution from a working system and apply the principles on which it functions to develop a new one. How could he use the same process to develop a new basis for decision-making that functioned as well in business as unanimous agreement functioned in Boeke's school?
Endenburg's first challenge was to create a structure that encouraged people to trust their individual sense of rightness, to self-organize, and to take responsibility for the success of the corporation. In Boeke’s school, students took responsibility for their own learning. Instead of power struggles or passive compliance, this created a strong spirit of collaboration and leadership amongst the students. For workers to have a similar meaningful voice in their work, they needed to be able to assume responsibility. They needed to be able to both make decisions and to feel the effects of those decisions. But how could groups reach agreement within the tight schedule required of a high performance production line?
On a personal retreat Endenburg wrestled with this problem, going over and over everything he knew about the cybernetic principles on which he had based other difficult engineering problems. None of the familiar forms of decision-making—autocratic, majority vote, supra-majority vote, nor consensus—protected the interests of all stakeholders, investors as well as workers, and all were vulnerable to manipulation. Both production and financial responsibility had to be guaranteed.
After three weeks of thinking and testing, he finally gave up. He packed his bags and was loading his car when the answer hit him: No objections! In the technical sciences, all elements of an operational system work together in the absence of objections, in other words, by consent. Each part, as a member of the whole, makes an individual decision about whether it can function optimally, or at all, in current or proposed decisions. The radiator can function well under a range of conditions. If that range is exceeded it objects by breaking down. When it stops working, the system stops working.
All parts of a system must be able to function in order for a system to function. Unless the objections of each part are expressed, consent exists and all goes well. The principle of consent fulfilled all of Boeke’s conditions for fair and inclusive self-governance and, most importantly, it allowed people to make decisions together without requiring them to feel love and trust as a prerequisite.
Once Endenburg had his first organizing principle, he went on to develop the structure that would govern the making of decisions. Other governance structures are designed to support either autocratic rule (typical management hierarchies) or majority rule (parliamentary procedure). The governance structure is thus limited. In order to include everyone in the goveranance structure, Endenburg needed to develop a structure that extended throughout the organization -- enfranchising the mail room at the same time it enfranchised the board room. To do this he formulated three additional principles, consent being the first:
1. Consent governs policy decision-making. Consent means there are no argued and paramount objections to a proposed decision.
2. Circles are the primary governance unit. Circles are semi-autonomous and self-organizing. Within their domain, they make policy decisions; set aims; delegate the functions of leading, doing, and measuring to their own members; and maintain their own memory system and program of ongoing development.
3. Circles are connected by a double-link consisting of the functional leader elected by the next higher circle, and two or more representatives elected by the circle, all of whom participate fully in both circles.
4. People are elected to functions and tasks by consent after open discussion.
In a sociocratic organization, these four principles are used to form a governance structure that all its members. Everyone has a direct voice, within their domain of responsibility, guaranteed by the principle of consent, in the determining the policies that affect their role in the organization. To understand how this works, sociocratic consent and objections need more explanation.
As individuals we become a group when we decide to do something, to reach a goal, together: play golf, start a business, eliminate land mines, or build a community. When we join an existing group we agree to support the aims of the group and to act in accordance with the group's decisions. We agree to follow the rules, to be governed by the rule-makers.
If it is a sociocratic organization, we become one of the rule-makers. We participate in determining the aims of the organization and of the circle in which we work, or live, or socialize. In sociocracy the definition of the aim of the organization is directly related to decision-making. Decisions are easier to make when we understand what aims they are intended to fulfill. And if we raise objections, withdraw our consent, this must also be done within the context of the aim of our circle or the organization and our ability to support that aim.
That sociocracy is based on consent is profound. It affects every aspect of the sociocratic organization because it means that the group cannot move forward if one if its members objects. But objections must be "paramount and reasoned.""Paramount" means that the objection must be directly related to the person's ability to work effectively within the group. "Reasoned" means the person must be able to explain the objection to other members of the group. Unless they can understand the objection they cannot resolve it.
Objections are important in sociocracy because they help the group find better solutions -- solutions that help everyone work more effectively toward the group's aims. An objection is not a veto; it is a valid reason why a particular decision will prevent a member of the group from doing their job or otherwise supporting the aims of the group.Not all decisions in a sociocratic organization must be made by consent. The group can decide by consent to use majority vote for some decisions (when to hold the next meeting) or autocratic decisions for others (letting the shop supervisor assign daily tasks). But everyone must consent before another decision-making method is used and everyone must consent to the policies that determine the parameters for such decisions (who must be included in meetings and how daily tasks are defined).
Self-Organization and Governance
"To govern" means to steer. Everyone wants an organization with lots of energy but an energetic organization needs good steering so its energy is directed and not dissipated. The analogy used to describe how to design and manage a sociocratic organization is to "steer chaos." To steer, not stifle, energy.Most of us think of chaos as a negative state, but chaos is a very powerful and energetic condition, not to be confused with random or purposeless activity. In chaos, each element is full of energy and freely pursuing its aim without restraint. Free, uninhibited energy creates good conditions for self-organization. In a sociocratic organization, each person and each cluster of persons is encouraged, even required, to self organize and to steer their energy toward their shared aims as energetically as possible. By establishing shared aims, and steering everyone toward them, the sociocratic structure uses all the available energy to move forward quickly and efficiently.
There are many other concepts and methods that are important in governing sociocratically but the beauty of the method is that the basic structure is simple. If the four governing principles are observed, the structure will be stable and preserve the ability of all members to participate fully.