Dictatorship Vs Democracy In Business (and a new solution)

Democracy or Dictatorship in Business

Democracy is often hailed as the solution to the perils of dictatorship, but it is far from perfect. This is true for governments, organizations, and of course, businesses. But there could be a new interesting solution to solving many of democracies inherent issues, and bring some of the benefits that a dictatorship offers.

Before I explain, it is important to understand the pros and cons to the two most common models of leadership…

In a dictatorship there is one person in command. Despite the negative association to the term dictator, this is actually how many businesses operate. And often quite successfully (though this does not necessarily mean optimally).

A dictatorship benefits from the clear vision of a single individual. This individual will often seek advice from others, but ultimately they call the shots. This avoids conflict of ideas or opinion, and allows for fast, decisive action. There is no likelihood of a change in leadership either, which enables long term thinking and strategic planning.

As was pointed out by one Chinese professor, China’s government has been able to think and act in a way that will benefit the country in the long term. (Their plan to move to renewable energy and clean up the country, once they had increased their economic strength, is now just being put into play. But it has been part of their strategy for years). Western governments however are always fighting to fix short term issues to keep them in power for the next 4 years.

In times where the monarchy held power, they too were in essence a dictatorship. When a ruler was wise, caring, and listened to the people things went well. But when any form of dictator is self centered, lacking in compassion, or unintelligent, then things can go downhill fast. The main issue though, is that a dictatorship disempowers the majority.

So a democracy must be the solution then? Well, no, not really. At least not as we know it now.

The problem with democracy is, that in truth, true democracies do not actually exist. Choosing between two political parties, or voting the members of a board from a limited selection of candidates, hardly constitutes as collective control. And the more we do expand the collective control, we begin to face bigger problems…

Firstly most people are opinionated, but rarely well informed on those opinions. Giving power to those who do not have access to the necessary information, or who have been manipulated to think in a certain way, is hardly the solution for effective decision making.

Secondly, and this is perhaps the biggest issue of all, when enough people become involved in making a decision, decision making virtually grinds to a halt. This is something that is found all too often amongst activist groups and smaller organizations, who try to be idealistic by attempting to run with collective equal power.

The current reality is, that to make real progress, you need to give power to a small group of individuals within any group structure. However, a company from New Zealand are, at least to some degree, out to change this paradigm.

Loomio is a cloud based software platform that is being used by government departments, charities, activist groups, communities, and businesses to make collective decisions. It allows for rapid decision making amongst members, and does so without lengthy meetings, a mess of email communication, or expensive voting systems.

Related links and documents required to cast an informed vote can be loaded by members into a central thread. Members of a group can vote yes, no, or abstain. The concept is simple, yet profound.

All manner of decisions can be made this way, and can be done with virtually the same efficiency as a dictator, but allows for the ideals and collective intelligence of a democracy. It decentralizes power too, so decisions are not made based on furthering the career or desires of a single individual, but provides progress for the overall good of the community involved.

I met up with Michael Elwood-Smith, one of Loomio’s directors, and self confessed social entrepreneur. He explained how Loomio developed from the ideals of the Occupy Wall Street movement, and as such its social mission is hardwired into their DNA.

The company has been formed as a workers co-operative, and all the code they develop is open source. And yes, they use their own platform to help make their business decisions.

This is a great example of a business putting the social into socialpreneur!

If you are looking for a way to speed up your group decisions, give more power to staff, or want to draw on the collective intelligence, then I suggest you head over to loomio.org and create an account. You can get started with a free trial, and if you like it, the basic plan just asks that you make a donation.

Now if only we could get governments to use this to help run countries, and listen to what people actually want!

Leon Jay

Leon is author of several books on the topic of business, an international speaker, and consultant. He has worked as Director of Marketing for an online personal development company, co-founded a variety projects that have each generated multiple 6 and 7 figures, and is the founder of SocialpreneurTV. He is passionate about helping businesses find creative solutions to operate in more environmentally, socially, and financially sustainable ways.

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