We typically think about enterprise where bosses manage by telling people what to do. However, there is growing evidence that when everyone in an organization has more voice, choice and shared responsibility, the enterprise achieves better outcomes than through top-down management and decision-making.
Participatory Decision-making
Morning Star, the world’s largest tomato processing company, which handles forty percent of America’s tomato product, has taken the most radical approach to decentralizing authority—employees have no bosses.
The company’s centrally located administration relies on staff at every facility to make their own decisions, including hiring people, buying new equipment and dealing with problems.
There are no middle managers.
Reinventing Organizations, a book by Frederic Laloux, a former management consultant, explain key concepts related to Morning Star and similar organizations, which function with “no bosses.” Laloux highlights the fact that in today’s economy, high levels of trust and decentralized organizational decision-making are advantageous.
Fair process, an evidence-based concept first articulated in Harvard Business Review, supports the idea that traditional hierarchies in business decision-making are obsolete.
The three key three elements of Fair Process are “engagement” which encourages everyone’s involvement in decision-making, “explanation” which provides participants with an understanding of why decisions were made, and “expectation clarity” which requires that everyone should understand the implications of the decision and what it means in the future.
While Fair Process challenges the traditional, top-down management approach to running organizations, it still represents a less radical approach to decentralizing authority than in companies without bosses.
Authority with Grace is the International Institute for Restorative Practices’ training program that teaches fair process and participatory decision-making in management and governance.
Business as a Force for Good
We too often assume that the primary goal of enterprise is simply to make as much money as possible. That narrow goal has been challenged by B Lab, a non-profit corporation, and the related concept of benefit corporations, key elements in “a global movement of people using business as a force for good.™”
Ben and Jerry’s Ice Cream, whose approach to business combines the profit-making of a traditional corporation with the social concerns of a non-profit corporation, was one of the inspirations for B Lab’s founders.
Since 1985, Ben and Jerry’s has donated 7.5 percent of its profits to charities and provides its employees with good salaries, profit-sharing, health club memberships, day-care service, and college tuition aid.
The company seeks organic suppliers, uses environmentally friendly packaging and creates opportunities for economically depressed areas and disadvantaged people.
Enterprise in a new reality represents a kinder, gentler capitalism—a free enterprise system in which everyone employed by a company may be engaged in decision-making and where business decisions balance the allure of making money with the need for social good.
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