A Democracy to Come? Investigating Change in Alternative Organisations, 2015-2019

Following the 2008 financial crash, politicians from across the political spectrum responded to a ‘crisis in capitalism’ by calling for a fairer and more resilient economy. A government bill in 2012 ostensibly supporting the development of co-operatives, efforts to mutualise public sector organizations and calls for a ‘John Lewis society’ echoed the rhetoric of a ‘moral’ or ‘responsible’ capitalism. Despite this rare political consensus on increasing workplace participation and mounting evidence of the resilience of organizations using alternative, co-operative methods during the economic downturn, key structural challenges remained, which held back many organizations from making the transition. In short, there was – and there remains – not enough research being conducted in to: a) how organizations can make the transition from top-down hierarchical workplaces to adopt more democratic structures with increased employee power; and b) the opportunities and challenges that organizations face once they have made the transition and are attempting to initiate and pursue change with less hierarchy and more employee freedom and control. This lack of evidence about change makes it a much riskier and unpredictable process for those considering whether to embrace different models of organization in the workplace, and holds back progress leaving the economy unbalanced. In an effort to create the needed evidence, this research project will capture and document the experience of self-proclaimed ‘alternative’ organizations, their members and coaches as they initiate and pursue change within the workplace. In doing so, it will provide a radical exploration of the opportunities and challenges faced by employees, elected leaders, coaches and HR professionals whilst adopting and sustaining democratic organizations. Building upon previous work conducted by Griffin previously the study understands democracy in the workplace broadly as a model of organizational decision-making that upholds freedom as non-domination. In this sense, workplace democracy reduces (and ideally eliminates) the possibility of arbitrary interference by managers, either by decreasing the power and authority of managers or by removing them altogether. The study explores five types of ‘alternative’ organizations which take such an approach – a typology which reflects how different democratic workplaces identify themselves but recognises there are significant overlaps. Briefly stated these are (i) worker co-operative organizations – in which workers have a stake within a company and they (rather than what would conventionally called “the management”) make decisions for mutual benefit on a one member, one vote basis; (ii) employee owned organizations – in which some or most employees have a stake in the organization, and can influence management decisions whilst accruing annual benefits; (iii) Holacratic organizations – in which authority and decision making are distributed throughout the workplace and the CEO’s power is ceded to a constitution; (iv) sociocratic organizations – in which equal employees use a consent based form of governance to participate and make decisions in the organization; and (v) broadly democratic organizations – in which formal and informal participatory decision making procedures are used to distribute power away from traditional management structures.

The economic instability and uncertainty created by the 2008 financial crisis has encouraged many individuals and groups to re-evaluate the type of society that they wish to live and work within. Evidence increasingly shows that workplaces with less hierarchy, more democracy and greater employee empowerment can not only ensure a more balanced and sustainable economy but can lead to a healthier and happier workforce. The opportunity to work in organizations with fair rates of pay, rights to participate in decision making and the freedom to craft your own job without managers interfering should no longer be seen as a remote possibility. Numerous employee owned companies including Accord and Tullis Russell, and co-operatives such as Suma and Infinity, operate in a way that claim to make these things a reality. Many more companies are going yet further, embracing radical decision making procedures that re-distribute power away from managers ensuring that employees are treated, remunerated and rewarded in a fair manner. However, for those traditional organizations tempted to make the transition to operate in a more democratic way, it is not a simple and straightforward path to take. Transformational change is notoriously risky and unpredictable and new companies feel particularly vulnerable, perhaps convincing them to stick with the familiar. Despite a government bill in 2012 supporting the development of co-operatives and calls for a 'John Lewis society' reflecting a more moral and responsible capitalism, various obstacles stand in the way of companies wishing to make the change. One of the main problems is that here is a lack of information available to firms about what to expect when initiating the transition to become alternative organizations. In short, there was - and there remains - not enough research being conducted in to: a) how organizations can make the transition from top-down hierarchical workplaces to adopt more democratic structures with increased employee power; and b) the opportunities and challenges that organizations face once they have made the transition and are attempting to initiate and pursue change with less hierarchy and more employee freedom and control. This lack of evidence about change makes it a much riskier and unpredictable process for those considering whether to embrace different models of organization in the workplace, and holds back progress leaving the economy unbalanced. This research project will provide this much needed research across a wide range of democratic companies. It will capture and document the experience of 'alternative' organizations and their members as they initiate, and pursue change within the workplace. In doing so, it will provide a radical exploration of the opportunities and challenges faced by employees, elected leaders, coaches and HR professionals whilst adopting and sustaining a democratic organization. Interviews, observation and action research will be used to go inside 24 democratic workplaces and consider how elected leaders facilitate change in contrast to conventional organizations; to what extent employees are free to initiate and pursue change and what constraints they experience in these types of organizations; and how these organizations increase and decrease freedom and accountability in various ways for individuals and groups. By working closely and co-producing research with practitioners in alternative organizations, this project will extend knowledge about change in democratic workplaces. It will broaden the evidence base for workplaces wishing to make the transition away from traditional top-down, hierarchical modes of operation by ensuring that they are fully aware of the challenges and opportunities they are likely to encounter and are better placed to deal with them in innovative and beneficial ways.