Democracy and business don't mix
Article Date: Dec 04 2008Big companies usually have a hierarchy with layers of execs between the boardroom and the customer.
Committees and project teams abound, but as the marketing senior VP at Mitsubishi said: ‘Change isn’t a time for democracy. No one follows a committee into battle. You need one empowered leader.’
Legendary ad man David Ogilvy did everything to discourage that signature of democracy: the committee. Famously, he pointed out that no one ever erected a statue of a committee. It’s true: you don’t want to go “over the top” into battle with one of your squad questioning whether you are wearing the right boots or carrying the right rifle.
As I’ve said before, I’m a firm believer that democracy doesn’t work, certainly not in business. It has to be absolutely clear who is boss. I haven’t changed my view one iota on that, but the dictatorship part does come at the end of a longer, deliberative process that requires a degree of consultation. This demands that you start with an enquiring mind and listen to ideas for improving your business wherever they come from: senior or junior, young or old. (So you'd better create a climate where they're not afraid to tell you.)
When you have finished the consultation phase and it’s time for you – and you alone – to decide what happens next.
Even with the popularity of “social democracy” in Europe and a charismatic new Democrat US president about to be installed, I have no doubts that “consultative dictatorship” is the only way to build a company quickly and effectively.
Few realise that this approach has been adopted quietly by the Chinese. The West has seen the swing from communism to capitalism, but assumed that the common strand is a single-minded dictatorship behind it. Well, the comeback to that is ‘yes’ and ‘no’.
In Mark Leonard’s fascinating book What Does China Think?, he describes how ‘public consultations, expert meetings and surveys are becoming a central part of Chinese decision-making’. A group of smart academics are encouraged to debate and question the way forward. In the city of Chongqing where the population is around 30 million, they are running a giant experiment in participation. I sense the cynical smile on your lips, but where in the West would you have a public hearing on the price of train fares and, as a result, reduce the fares by 85 per cent?
It is a living laboratory based on strengthening the rule of law, but consulting the public over major decisions. Leonard neatly describes this process as deliberative dictatorship.
The West has arrogantly assumed that capitalism and democracy are inseparable and, particularly following the collapse of the Soviet Union, it is the only system that can work. Given our efforts to bring democracy to Iraq and the implosion of the West’s financial sector, it just might be time to allow that there could be an alternative way.
I don’t know if it will work for 1.3 billion people, but I’m sure it’s worth a try. However, what I do know is that deliberative dictatorship works for business.
