Sociocracy: An Organizational Structure for Distributed Leadership

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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

  • MJ Kaplan

    Distributed leadership is based on a belief that differences can lead to better decisions and participation speeds up implemetation. Loomio is an online platform that enables people affacted by decisions to participate in
    the decision process. Loomio applies a consent approach and encourages all participants to take on facilitative roles to support the group to move toward decision. Loomio is a start-up social enterprise that is being used in 75 countries in communities, organziations, businesses, governments and families. The enterprise itself is a cooperative and we are experiementing with varied approaches to decentralization, currently testing circles, feedback loops and transparency. In our experience, sociocracy makes sense for networks and intact organziations to leverage the value of all stakeholders to make better decisions.

  • William D Kuenning

    This is of course distributive collaboration, leveraging the input and feedback of disparate groups and individuals through an organizational structure, formed around discrete domains of subject and direct relation proximity.

    Problems arise when for the good of the cumulative empowerment of the individual to participate and to feel welcome to do so, too much structural creep occurs, and guidelines and practices take route, such as round-table input, which, while very well intentioned, can actually reduce the free flow of stimulated ideas. These strictures and guidelines can be established, unintentionally, to mesh the least common denominator of the individuals who participate. In other words, for example, a “round the table” sharing can actually force contributions to give input, when they are not ready or useful. This type of sharing can also reduce the spontaneity of thinking required for true dynamic adjustment to challenge or opportunity.

    Sociocracy is a well-intentioned organizational structure of possible great value. Nevertheless, even with “transparency” it risks requiring behaviors, which are at crossed values with simply participating because one has something to contribute. Making input welcome is different from making it required. Sometimes the “requirements” of a new organizational structure, in the name of inclusiveness, actually reduce such. The balance of demonstrating inclusiveness and actually naturally fostering it is an art form.

    Something to consider, which is not taught in school directly, is the need to seek and demand comprehension and that it is not the just the instructors’ responsibility for that quality control. One needs to both manage and learn by true comprehension, and “Sociocracy”, again in my opinion, needs to recognize that as the constant number one goal, before ever attempting to move ahead. One cannot really “structure” an organization into comprehension. One must have that constantly building comprehension as the main foundation for using any tool in the arsenal (like Sociocracy) to participate in, and contribute to, any endeavor. Otherwise, it may be the same dance with different music, and whereas the individual decisions may seem more important, relevant and inclusive, the end products will not be singular or transformational.

    When the process becomes more important than the outcome, it is a school for a process. A paramount part of the process is, through transparency and clear intent for all the stakeholders, to know the difference. -Thank you for all you do. Military Family Voices

  • Dr Grant Robertson, UGM Consulting

    Sarah raises an interesting concept and highlights the difficulty it will face to become adopted. A substantial part of the challenge has to do with entrenched notions of leadership and management.

    A system of distributed leadership represents a radical shift in the status quo, as observed. At this point in time, while many doubtless practice it everyday and it is more widespread than recgonised, they do so without realising it. Instead, most mental models of leadership are firmly tethered to concepts of hero leadership.

    A few key hurdles seem to persist and constrain dissemination of the ideas (and practise) of distributing leadership. I’ll share some here, as my contribution.

    The first major hurdle is entrenchment of the sole leader ideas – particularly in the research, but also in practise. ‘Leadership’ researcher seem to have been extremely blinkered, which may explain why there is great dissatisfaction with explanations of leadership after more than a century of scientific research and thousands of years of interest in the topic.

    A second significant challenge is unwillingness of many commentators to separate the concepts of leadership and management. While individuals often have to do both leading and managing, they are in practise very different (but inextricably linked) functions. Acknowledgement of this is needed to be able to see the functions clearly. For example, our circulatory system transports both oxygen and nutrients, in a virtually inextricable manner. But, to be able to study each more deeply and accurately, health professionals recognise different functions of the bloodstream. They can’t just say “it’s too hard to spearate the functions” and ignore the differences! Thank goodness the medical world hasn’t adopted the same approach to the circulatory system as many scholars and practitioners have about leading and managing.

    Additionally, some researchers have usefully pointed out that most leadership studies are actually studies of appointmentship – he’s the leader (yes, mostly male in the research!) and you’re the followers. That has proved a profound and highly useful insight. Our problem is that the so-called leadership research is actually more about managers and subordinates. In a leader-follower relationship it’s the followers who attribute leadership and this fact is seldom recognised in the literature.

    Finally, although my doctoral research focused on ‘distributed leadership’, I feel substituting the term ‘network leadership’ has far greater potential for traction. Furthermore, comunications technologies have facilitated a much more network (open groups with fluid boundaries) oriented context anyway. I suspect the ‘circles’ that Sarah mentions are hubs in a wider system. Within those hubs, and indeed throughout the network (system), there is a need for the eight influencing (network) leadership behaviours I identified in my grounded-theory research – communication, listening, coordinating, motivating, risking, anchoring, mediating and channelling (for more, see the briefing aechive at UGM Consulting).

    We do need a radical change in approach to leadership. Perhaps the radical changes in the way societies communicate and manage knowledge will see this

    finally occuring?