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Five Strategic Reasons Why Democratic Leadership is The Future of Work

When people discuss changing their organizations and incorporating democratic leadership styles, they talk about it like it’s a goal in itself. But, in reality, it isn’t a goal, but the means to achieving something else.

The world is constantly evolving and so are the kind of businesses that thrive in today’s highly tech-infused world. If your business needs to survive well into the future, old fashioned management ideas won’t work anymore.

There are strategic advantages to choosing to lead your company and your employees in a democratic way. And I’d like to share with you five of the most important reasons why you should embrace this style of leadership.

STRATEGIC REASON #1: COPING WITH DISRUPTION


What most big companies are afraid of is this: Being disrupted. Startups like Uber, AirBnB, Netflix or Cool Blue in the Netherlands, have shown it’s possible to grow exponentially within a very short period of time.

These companies have not only grown incredibly, but in doing so, they’ve turned entire markets on their head. And, that’s the definition of disruption.

All these companies have a work culture that is so different from traditional companies. In other words, they have a democratic style of leadership which puts people first. By giving their employees the freedom to be innovative and to make their own decisions, these companies have grown incredibly fast.

What we, at Semco Style Institute, have noticed is that traditional, big companies are quite worried about such disruption. Banks, for example, are afraid that soon a company like Uber will come around and disrupt all financial industries. And that’s now pushing them to become more lean, agile and democratic because that’s the way to cope with this kind of disruption.

They need to try and be more innovative and that’s possible only if they’re agile as a company.


STRATEGIC REASON #2: APPEALING TO A MILLENNIAL WORKFORCE

Millennials - young people- don’t really like having bosses. They crave more freedom and want to actively play a role in the strategic development of the companies they work for. In short, they want to be part of the bigger movement and that’s an important reason why companies of the future need to be more democratic.

The Millennial workforce isn’t thrilled about working in a very hierarchical organization. In fact, there’s a joke that goes, ‘If you build pyramids, you get mummies,’ and that applies very much to businesses of today.

It’s essential that companies have a democratic leadership style which empowers these young people and facilitates their craftsmanship.

STRATEGIC REASON #3: JOBS OF THE FUTURE BELONG TO THE CREATIVES


This reason sort of ties in with the second reason: There’s no denying that society is increasingly getting mechanized.

In Netherlands, five of the biggest companies have lost 68 percent of all their jobs to automation. The kind of jobs that have been lost to automation are mainly administrative jobs and other routine jobs. And to be honest, we’re just entering the age of artificial intelligence, which means there will be even more jobs that will be automated and performed by robots.

And the only jobs that survive will be the creative, craftsmanship and service-oriented jobs - in other words, the people-centric jobs.

The thing about such jobs is that they don’t go very well with old fashioned management because you cannot tell a craftsman or a creative person how to do their job. You simply cannot control creativity.

In the future, jobs will need lesser management and more democracy.

STRATEGIC REASON #4: AUTONOMY BREEDS GOOD HEALTH & THE REVERSE IS TRUE TOO

In a lot of European countries, people are working longer nowadays. We are healthier, live longer and so we have to work longer before we can retire. Otherwise, we cannot afford to pay for all the people in our countries anymore.

To stay fit longer, it’s important that people enjoy more work-life balance. And that’s good for not just happiness at work, but for strategic reasons as well: Healthy people tend to have more autonomy and find it easier to last at work until it’s time to retire, when compared to unhealthy people.

On the flipside, feeling autonomy at work is crucial to staying healthy, which is why managers fall sick less often than people who don’t have managerial responsibilities. Managers feel more autonomy and that’s a reason why they don’t fall sick that often. It’s like a vicious circle.

So, autonomy is crucial for people to stay vital and perform better not only in the present, but until they retire much later in life. It helps because being autonomous makes people feel good about their work on the long run and it’s important that all of us feel that way.

After all, our national economies need us to work longer to keep the lives of our older citizens affordable.

STRATEGIC REASON #5: CUT TO THE CHASE FOR BETTER PERFORMANCE


Most businesses today have to perform better because their customers are more critical; they’re less loyal and with increasing transparency, they know exactly how one company is performing in comparison to the competition.

In such climate, democratic organizations simply perform better. Besides being able to disrupt industries at high speed, these companies perform better because of their employees.

Their employees are people who have more freedom and are hence faster with innovation; have better work relations; are better at communicating. Most importantly, they are more agile, skipping unnecessary processes so that they can capitalize on their strengths to get more done.

And those are the ingredients for a high performance organization and they fall into place when you begin organizing more democratically.

TRUST TO GROW EXPONENTIALLY

There are many preconceived notions about democratic leadership: Many conventional leaders believe that if they give autonomy to their employees, there will be complete chaos and that people cannot be trusted to take responsibility.

But we have proven, through companies that follow the Semco Style, as well as other companies with similar democratic styles of leadership, that it’s possible for people to be autonomous.

People who can make decisions in their private lives can also make them in their professional lives. But as leaders, we need to facilitate them and enable their decision making. We need to give them all the information, trust and the confidence required to make the right decisions.

And the beauty of trust is that it augments itself- if I give you my trust, then you give me yours in return and it always works like that. If a leader in a company trusts 20 of his people, then they will, in turn, earn the trust of 20 people.

Trust breeds trust and it can speed up the growth of an organization and it perfectly fits an exponential business strategy.

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