The 5 Advantages of a Democratic Workplace

In my last article I talked about the 7 Trends Making Businesses More Democratic including the Internet, expectations of Generations X and Y, new business standards in a Post-Enron age, political transitions, humanity’s search for meaning, corporate social responsibility, and the birth of what I call “lifestyle democracy.”

These trends are making democracy in the workplace inevitable, but what about the benefits? Can democracy – rather than a traditional top-down model of business – really be more advantageous? Here are five reasons why I believe it can:

Democratic Companies are a Talent Magnet

Where would you rather work – a stifling, fear-driven workplace that may look great on a resume but makes your life miserable or one where you’re valued and your voice is heard?

When given a choice, smart, creative, self-motivated people – the ideal employee – will choose the latter. Regardless of pay or prestige, people want to work where they feel appreciated and heard. Business owners and executives should look beyond motivational gimmicks and instead use democracy to attract the people needed to propel their businesses forward – and win the talent war in the process.

Democratic Companies Come Up With Smarter Ideas

Every business owner knows the maxim, “Innovate or die.”  But coming up with ideas and acting on them isn’t enough. You need smart ideas. How to get them?  As James Surowiecki writes, tap the wisdom of your crowd. Chances are the employees developing your products or services, fielding customer service calls or selling to clients have some great insights for your Next Big Idea – if only someone would listen.  

Democratic Companies Work Fast

It may seem paradoxical to say that democratic companies know how to work fast but it’s true.  Sure, the decision-making process, if it involves reaching a consensus, can take time. But the time and attention paid to everyone’s point of view only makes the execution phase faster once the decision is made.

Typically, top-down decisions leave employees thinking, “Why are they doing that? Why didn’t they consult me? This will never work.”  Most company’s best-laid plans fall apart in the execution phase because they didn’t have the democratic buy-in of the employees who would be executing on the decision.

When employees have a say and understand the “why” behind a decision the execution is faster, more efficient and devoid of resistance.

Democratic Companies Have Happier Employees

The Gallup Organization recently reported that approximately three-fourths of the US workforce is disengaged at work, costing $300 billion annually.  Employees report that not being engaged also impacts their emotional and physical health. Conversely employees who do feel engaged feel the opposite. A democratic system by definition is an engaging one, contributing to the physical and mental health of employees each day. Being engaged, having a say, and being treated as an intelligent human being makes people happy – and creates a happier place to work as well.

Democratic Companies Use Democracy to Boost the Bottom Line

Democracy impacts the bottom line because it attracts great talent, keeps turnover and absenteeism low and produces a more innovative workforce that executes on ideas quickly. A workplace with fewer layers of management due to a flatter, more decentralized system means that money can be used to hire great people — rather than manage underperformers.  Democracy means a leaner, faster, happier and more innovative company –factors which give the bottom line a boost.

So there you have it, five great reasons to become a democratic company. In my last article, I’ll explain exactly how to become a democratic workplace with real-work examples as well.

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