In the age of liberated companies, there are different models of governance where an individual as a free actor, is responsible to undertake actions on behalf of his company.
With a participatory decision making process and distributed leadership at its core, sociocratic governance is at odds with the traditional vertical management system.
A sociocratic organization allows the individual to express himself/herself within a group, and allows the group to function in an autonomous and co-responsible manner.
Through collective intelligence, sociocracy works towards a common purpose while maintaining individual opinions and projects.
Applied to the company, this form of managerial approach requires full involvement of the management during its implementation and requires consent of the line managers to delegate making of certain decisions.
It is a “humanizing" approach that empowers all employees.
Origins of Sociocracy
It was in 1970 that Gerard Endenburg, a Dutch engineer, gradually established the foundations of modern sociocracy. He borrowed the term from Auguste Comte, a French philosopher.
This electronics engineer wanted to run his business in a humane way, while maintaining its efficiency and competitiveness.
To do this, Gerard Endenburg incorporated his knowledge of systems theory, cybernetic principles and biofeedback.
Eventually, he developed the Sociocratic Circle-Organization Method that helps small and larger organizations make better decisions through a consent decision making process.
Sociocracy – also referred to as “dynamic governance” – spread in the 2000s and continues to develop to this today.
The Basic Rules of Sociocracy
For the method to work, it is necessary to understand and adhere to four core principles.
Principle #1 – Circle Structure
With sociocracy, an organization associates each of its functional or operational component with a circle. Each circle represents a human group.
The number of circles depends on the size of the organization. For example, a circle may consist of members of the same department or persons performing the same tasks and functions.
The key to the core principle of circles is that the circle members have a common aim. They make decisions that fall within their area of responsibility where they implement and evaluate such decisions.
Each circle includes a leader and a delegate. Leaders and delegates from each department circle together form the general circle. This creates a link that enables information to flow throughout the organization. Generally, the leader informs the circle of the operational plan, actions to take and decisions to make.
Consequently, different circles affect one another and should remain attentive to the requirements expressed by the neighbouring circles around them, regardless of whether such requirements are from higher or lower circles.
Principle #2 – A Two-Way Link, Double Links
To ensure that feedback flows up and down and across the organization, circles are arranged in a hierarchy of overlapping circles. This overlap is called a "double link".
While the higher circle designates a head of operational unit, also called operational leader, the overlapping is formed by the circle’s operational leader and one or more elected delegates who are full members of both linked circles.
The role of the delegate is to ensure that the general circle knows about the decisions and needs of the circle to which he/she belongs. This delegate is free to approve or not approve the proposals made.
Principle #3 – Election Without a Candidate
One of the specificities of the sociocratic method is to select someone by their choice and consent to tasks and functions through a simple agreement: all the members of the circle engage in an open and reasoned discussion in order to choose one of their peers.
Therefore, each member of the circle is eligible and must give his/her consent in order to validate this election.
During the election, each person argues in favour of the person he or she considers the most competent to fill the vacant position.
The advantage of election without a candidate is that no one loses.
There is no loser since there is no candidate and there is consensus that the best possible choice has been made.
Principle #4 – The Consent Principle
Each member of the circle participates fully in the decision.
This is not a consensus where everyone would approve the proposal submitted to them. No: the proposal is approved when no member feels the need to oppose it, by raising a major and reasoned objection.
If someone raises an objection, members discuss it, formulate new proposals and then pass them around the circle again.
Conditions for the Success of Dynamic Governance
Once an organization understands the core principles of sociocracy, it needs to meet certain conditions in order to function.
A goal adhered to by all members
It’s important to clearly define the boundaries of the circle and the intention of each circle member.
In order to avoid any misinterpretation or misunderstanding, it is advisable to ask participants about the possible need to clarify a proposal.
Consideration of objections
When a suggestion is deemed unsuitable, it is important that each objection is well reasoned. Before making a decision, participants must be able to understand why a suggestion is rejected.
This makes it possible for a person to express one's opinion in a constructive way and therefore requires the person to be attentive to his/her own needs as well as those of others.
No voice is ignored.
When someone raises an objection, circle members discuss the initial proposal and build on it until they can come to a decision.
Support the decisions made
Line managers must recognize the autonomy of circles and self-governance. Otherwise, decisions made by the circle lose their meaning.
Evaluation of decisions
The decisions made are dynamic.
Indeed, evaluating a decision is of great importance. Regular feedback loops highlight the proper functioning or malfunctions of the measures taken.
Each circle acts according to the principles of continuous improvement, making changes when necessary.
The empowerment and commitment of circle members is thus maintained before and after each decision is made.
Advantages and Disadvantages of Sociocracy
This mode of governance has more advantages than disadvantages. Let’s start by looking at the negatives.
In order to work, sociocratic governance requires rigorous planning and the training of everyone, not just leadership or operational roles.
If management does not strongly support it, resistance to change may prevail and sociocracy may fail.
In addition, it is necessary for organizations that use sociocracy to have an efficient functional structure and a performance evaluation procedure.
Finally, reaching consensus and agreeing on a decision sometimes takes longer than it would in a traditional organization. That may not be appropriate in case of an emergency.
Thanks to regular feedback and assessments, organizations can identify sources of conflict very early on, often before a conflict even occurs.
Furthermore, team members become more comfortable sharing their views publicly because everyone is encouraged to make proposals and voice objections.
Sociocracy also increases circle meeting efficiency, thanks to a standard organizational structure that includes consent to agenda, subjects of address and project progress updates.
From an HR perspective, involving people in decision making reduces absenteeism and increases employee retention.
The recognition of each individual also contributes to the prevention of psycho-social risks and develops a sense of belonging.
In addition, joint decision making leads to broad acceptance by everyone and encourages self-discipline and accountability.
Adapted to the company, sociocracy reduces costs in the organization as well as improves the assistance provided to customers.
Sociocracy 3.0, a Toolkit for Agile Organizations
Open Access Resources
Bernhard Bockelbrink and James Priest first conceived of Socriocracy 3.0 (or S3) in 2015. They launched it as an open source framework.
In other words, S3 is a framework with an open software structure, which offers many documentary resources to organizations that want to improve, with a collaborative approach.
S3 starts from the foundations of sociocracy and how people can use 70 patterns to respond to various challenges and opportunities in their organizations.
An organization can apply these patterns to various activities, such as conducting effective meetings, administration and coordination of tasks and functions of employees.
These patterns are modular and complementary. They are also flexible and can be combined to make the organization evolve according to its needs.
In this sense, the framework proposed by S3 is less restrictive than the sociocratic circle method since it focuses on where the organization finds itself, without radical change.
It is a real toolbox that makes cooperation and continuous revision possible in agile structures.
A Collaborative Culture with 7 Basic Rules
Sociocracy 3.0 is based on a framework of patterns and practices that promote collaboration.
That collaboration is based on the desire for autonomy, search for meaning, the relational needs of people and their sense of belonging.
It is built on seven principles that shape organizational culture:
- accountability, and
- continuous improvement.
The 70 patterns of Sociocracy 3.0 all reflect these seven principles.
The Sociocracy 3.0 group also provides free resources for learning and practice within any organization.
It uses some of the principles of Lean management, different communication and support techniques that take into account the psychology of individuals.
It enriches methods such as Lean Startup, Scrum, eXtreme Programming, Kanban, SAFe, DAD, LeSS, OpenAgile etc.
Sociocracy 3.0 takes an agile approach on issues of management, mode of administration, organization structure, as well as its evolution.
It is a kind of practical guide that can be applied to any learning organization: start-ups, Very Small Enterprises (VSEs), SMEs, large accounts, families, and communities.