Most Democratic Workplaces of 2011

New to the list this year are American Support, Bucket Brigade, Bump.com, Greenleaf Book Group, Groupon, Hulu, Integritive, Learn Quebec, Mojo Interactive, Podio, Productivity Associates, Rabbit, Total Debt Freedom, Valtech, Happy at Work, and WD-40.

Other well known companies on WorldBlu's list include Zappos, Guayaki, Great Harvest, DaVita, and 1-800-GOT-JUNK.

Men Can Govern Themselves without a Master

" I have no fear that the result of our American experiment will be that men may be trusted to govern themselves without a master." -- Thomas Jefferson

I have no fear that the result of the democratic-business experiment  will be that men may be trusted to govern themselves without a master.

How Do You Define Democracy?

Every day I talk to at least one person about democratic business, usually for the first time, and most everyone I talk to has the first impression that democratic business means that employees vote. While voting may be involved, it does not define a democracy. A truly democratic business is defined by these four elements:

(1) The company is proactively transparent. If the average employee is expected to make critical decisions for the company the average employee must have access to the most critical information. Examples of transparency include (a) the manager's cubicle is placed in the middle of the action like at GE/Durham (b) every employee has access to daily company financials like at Linden Lab (c) employees switch jobs for a day like at Southwest airlines (d) everyone knows how much everyone else makes in the organization like at Semco (e) each employee sits down for a weekly one-on-one meeting with his/her manager like at IPM Co.

(2) Everyone has ownership in the company. I am referring to literal ownership of shares in the company and also ownership of work and tasks. Examples of ownership of work include (a) each team is given a due date for when their work is to be finished and the team decides how they will get it done like at GE/Durham.

(3) The companies management is limited. This means that there are few layers of management and that power is decentralized. Examples of limited management include (a) the company only has one, two, or three layers of management even though there are hundreds or thousands of employees like at GE/Durham (b) Employees, not managers, hire and fire employees like at Semco.

(4) The company's purpose inspires a euphoric feeling. In all democratic businesses there is a sense among everyone in the company that they are all contributing to something bigger than themselves and bigger than profits.

If I were to give a definition of a democratic business, it would be this...

A democratic business is a business that encourages an ownership mentality from bottom to top.

Democracy Is Common Sense, Not Political

True democracy is not a political platform. Democracy is still just as much common sense as when Thomas Payne wrote the historic pamphlet, Common Sense, that inspired the American Revolution.

Let's imagine, for all intensive purposes, that it became known that you can make money by running long distances. Now suppose that to make this money you organized two groups.

The first group was told to come in at 6:00 AM and leave at 9:00 AM and they had to ask when they wanted to go to the bathroom. In addition, they were told that all of the profit would be managed by someone that would be brought in. He would keep track of the money and pay everyone exactly the same (so that everything was fair) and he would keep the rest of the money for himself. Also, he would make sure that they clocked in at exactly 6:00 AM and left no earlier than 9:00 AM. He would also make sure they were all running fast enough and not cutting corners. You can probably see where this is going.

The second group decided they would run 3 hours a day. Together they decided to run in groups of at least 7 to encourage team work and safety. Group leaders, hirings, and firings were all decided by secret votes of the group members. In addition, each person chose his/her own salary based on needs and desires and obviously...peer pressure.

Which group do you think would create the biggest profits? Which group would have the happiest runners? Which group would be more creative and innovative?

You may also be thinking what I thought the first time I heard of the idea...If everyone chooses their own salary, wouldn't everyone choose the highest salary they could get and work the least they can? The truth is, a company called Semco, which has over 5,000 employees, revenues of more than $1 Billion, and is one of the fastest growing companies in Brazil does exactly this. Ricardo Semler's (CEO of Semco) employees choose their own wages and work whenever they want to. Wouldn't you like to have that kind of boss? What is his secret? The secret is that he doesn't act like a boss. Ricardo Semler doesn't even have the power to fire an employee. There are only three levels of management and he treats his employees like adults and not adolescents. Novel idea? No...common sense.

Democratic business translates to saving lives!

The following is an evaluation of two companies in the same town in one of the most dangerous industries in the U.S.--sewer and water pipe manufacturing.

Guess which one is run democratically and which one is not:

J.R. McWane founded McWane Co. in 1921. John Eagan founded ACIPCO in 1905. McWane's employee turn-over rate is near 100% per year. ACIPCOs turn-over is less than half a percent per year. To deal with high turnover rates, McWane hires ex-convicts. Contrastingly, 10,000 people recently applied for 100 positions at ACIPCO. McWane's management style is called "disciplined management practices". ACIPCOs management style is simply stated, "What if it applied to me? Is it fair?" Over the past seven years, nine McWane employees have been killed and atleast 4,600 have been injured. ACIPCO ranks sixth on Fortune's 100 best companies to work for. McWane's production philosophy is "REDUCE MAN HOURS PER TON". ACIPCOs production philosophy is, "If we can't do it safely, we don't do it." McWane was sited for more than 400 safety violations between 1995 & 2000. ACIPCO was sited 10 times. The McWane family is one of the richest and most secretive families in the South. Collectively the employees of ACIPCO own the entire ACIPCO company.

In 1920, when John Eagan announced that ACIPCO would operate on "The Golden Rule", the president of the company quit--his name was J.R. McWane.

(Statistics taken from PBS Frontline: Dangerous Business)

Do You Work in a Democratic Company?

(Taken from "The Democratic Company" by Traci Fenton)

A $6 Billion U.S. Company Turns Democratic!

Take DaVita. Today, the El Segundo, Calif., company is the largest independent provider of dialysis services in the United States, with more than 30,000 employees and annual sales of nearly $6 billion.

But back in 1999, the situation was bleak: the company was functionally bankrupt, under investigation by the U.S. Securities and Exchange Commission, being sued by shareholders, and the majority of senior executives had left. Its new CEO, Kent Thiry, understood that changing course meant embracing a fresh, democratic approach. So he and his team implemented the following:

“Town Hall” meetings to share information about new programs, spotlight achievements, and answer questions. Quarterly “Voice of the Village” meetings allow “teammates” the opportunity to ask the CEO and senior leadership any questions they want.

Opportunities for all employees to engage in democratic decision-making through voting on a range of issues including the renaming of the company, its core values, job titles, logos, and new initiatives.

Annual forums at which DaVita’s CEO and COO publicly share their personal successes and failures in front of more than 2,000 colleagues.

Decentralization that lets each of its 1,300 clinics be its own “boss.”

As a result, DaVita dramatically reduced its turnover rate, stimulated organic growth above the industry average, and became the industry leader. Net operating revenue grew from $1.45 billion in 1999 to $5.26 billion in 2007. And over the past five years, DaVita’s stock has soared 279 percent, while the S&P 500 Index has returned 52 percent.

“We feel our approach adds more value to the American health system, not just in savings but also in transparency and accountability,” says Mr. Thiry. “I firmly believe that every company can be a democratic community. And I know it’s worth it!”

His statement underscores the potential of democracy to transform not only corporations but the millions of lives they affect. That, in turn, raises a pressing question: Do big businesses have a responsibility to be organized democratically because of the power they wield?

(Taken From: Even Big Companies Are Embracing a Democratic Style -- Traci Fenton)

My Email to President Obama

President Obama is taking emails from everyone and anyone who has an idea. I sent him an email about democratic businesses. Here is what I said...

President Obama,

I have to say. I feel a renewed sense of energy and motivation since you have been elected that we, the people, might be listened to a bit more than in recent years.

I have an idea that I have developed from hundreds of hours of research. Please tell me what you think...

I believe that a tax cut should be given to "Democratic Businesses". Companies like Great Harvest, Da Vita, Southwest, and Linden Labs--to name a few. A tax cut will inspire more democratic businesses to be started or made from currently non-democratic companies. Democratic companies are designed to benefit all the employees and not just employees at the top.

A tax cut for democratic companies would save and make the government billions of dollars.

Employees of democratic businesses have more of a say concerning compensation, which means they get better retirement plans. An expert in a PBS Frontline Documentary called "Inside United's Bankruptcy" stated that corporations are currently underpaying their employee's pension plans by $450 Billion. As you may know the P.B.G.C. is already currently in a $23 Billion debt. The government can't afford to guarantee all these and future pension plans.

Employees of democratic businesses are able to afford health care. Wal-Mart and other non-democratic companies have cost the government billions of dollars by encouraging employees to apply for government health care instead of making it affordable to their employees.

Employees of democratic businesses are more engaged and productive. In 2006, Gallup estimated that disengaged employees cost the American economy $350 Billion per year. When employees feel a sense of ownership in their companies they are more engaged. Employees in democratic businesses are engaged because employees feel valued and motivated instead of coerced and fearful.

While democratic businesses expand into other countries, they never outsource jobs to other countries. Billions of dollars are lost to our economy when jobs are outsourced. In a democratic business, every single employee is valued and jobs are not sent overseas.

During the hundreds of hours of my own research on democratic organizations, I have discovered the website of an organization called WorldBlu. WorldBlu may be able to help you determine which companies get a democratic tax cut and which ones do not. Over the last ten years, they have developed a "score card to evaluate an organization based on ten principles of organizational democracy such as the level of transparency, accountability, decentralization, and choice practiced throughout the organization." (http://www.worldblu.com/scorecard/question1.php). I have never even talked to or emailed this organization before, so I don't know if they can help. Still, it is good to know that you don't have to start from scratch to develop a way to determine which companies qualify for a democratic tax cut.

Thank you for listening to me and everyone else who emails you.

May God bless you in your presidency,

David Sheffield