Sociocracy: An Organizational Structure for Distributed Leadership

 

Rock pile

Many organizations are governed by top-down, or “command and control,” management. This management approach (also called “Theory X” by psychologist Douglas McGregor) is based on the notion that the boss has all the answers and that employees will be slackers if not kept in line. By contrast, Theory Y depicts employees as intrinsically motivated by a participatory approach to solving problems.

Although the latter may sound like a good idea—helping to bring out the best in employees—it is difficult to implement on a factory floor or in an office setting. It requires a cultural shift that isn’t prevalent in schools, government or organizations. Sociocracy, or Dynamic Governance, is an organizational structure developed by Gerard Endenburg, a Quaker born in the Netherlands who was the CEO of Endenburg Elektrotechniek during a downturn. Sociocracy provides a non-authoritarian organizational structure that empowers people to make decisions within their domains and fosters trust and effective decision-making.

Sociocracy organizes participants in circles, has feedback loops, and uses consent rather than consensus for decision-making. These guiding principles provide the structure for sociocracy, but transparency is the last necessary ingredient.

Consent: Many hierarchical organizations have a decision-making body that creates policy but relies on other employees below them to enforce that policy, regardless of buy-in. In sociocracy, consent is reached when there are no “paramount objections” to a proposal. Such objections come up when a proposal conflicts with the organization’s aims or mission.

“Everything is done with an aim,” explained Jerry Koch-Gonzalez while leading a sociocracy workshop for Belfast Ecovillage. “The greater the divergence of the group [regarding the aim], the harder it is to work together.”

Circles: Circles are semi-autonomous entities given freedom within defined parameters. Individuals make decision in matters that directly affect their work and leadership is distributed. The group determines by election which individuals have specific roles or functions, such as delegates or facilitators, and for what length of time. Circles use consent decision-making within a given domain.

Circles aren’t isolated bodies; rather, they elect delegates to represent their circle as members of a higher circle. Two members of each circle participate in that higher circle (double-linking) and the circles are connected in a non-hierarchical manner. The top circle in a corporation would include the CEO, the board, and at least two members from the general management circle, with all members participating fully in decision-making. The organizational structure assumes that all participants have “a piece of the answer” or a special contribution, thus encouraging all voices to be heard.

Feedback loops: Policies are in effect for a specific period of time and will be evaluated at or before the end of a given time period. The policy can then be ended, revised, or continued, depending on the feedback. This practice allows of reflection and continuous improvement over time. According to Koch-Gonzales, “Feedback loops allow people to keep learning.”

Transparency: For sociocracy to thrive, all members of the organization need access to information like meeting agendas, minutes and organizational policy. (Exceptions to this would be proprietary knowledge or information that presents a security threat to individuals or clients.) All members of circles must feel empowered to raise concerns for sociocracy to function. One tool in achieving this is “rounds” at a meeting, where all participants have the opportunity to speak about a proposal, ask clarifying questions, give quick reactions, or suggest amendments to a proposal.

“All these things support everyone having a voice,” explains Koch-Gonzalez. “Nobody can be ignored.”

Beyond the walls of a single corporation, the application of sociocracy can link a variety of stakeholders. For example, small farmers could form a cooperative business to negotiate contracts with retailers or shipping rates with transportation companies. Woodbury University uses sociocracy to foster trust and collaboration between departments. Nonprofit organizations are using sociocracy to boost participation and incubate innovative ideas. Mondriaan, a large mental health facility in the Netherlands, is creating distributed leadership while cohousing communities like Belfast Ecovillage and Pioneer Valley are attempting to reduce the time spent in meetings for all members by delegating tasks to small groups.


 

The original version of this article was published on Wednesday, May 21st, 2014 at TriplePundit.com.