Could an Enterprise be a Republic?

The current year is a good example of circumstances in which agile practices are beneficial. Our world is volatile, uncertain, complex and ambiguous. The quantity and quality of customers’ purchases have varied greatly. Forecasts for the future are uncertain because the facts needed to make decisions are not known. The situation is so complex and new that our traditional ways of planning our activities are not possible.

Sitra has renewed its mega-trends for 2020. Population growth is declining. We are getting older. However, technological development continues to be strong. A long period of peace has enriched humanity. The result is a shortage of demand, as a large proportion of people already have almost everything necessary. Being overweight is a bigger problem than hunger.

As the economy changes, so does the world of work. Employment in a permanent employment relationship is declining because employers are no longer able to protect their employees from changes and fluctuations in customer purchases. We want to get rid of fixed costs, which increases the amount of variable costs. There will be outsourcing. Employment relationships become short-term, part-time and flexible. Businesses are looking for cheap labour and networking with other organizations.

We then end up in a situation where the leader has no subordinates but partners. New ways of leading are needed to lead equal partners.

Authoritarian leadership

Authoritarian leadership is a current reality in companies, at the state level, and in various other organizations. It has many different forms, but the hierarchical organizational structure is its most typical manifestation. In a class society, the king and the nobility have privileges in terms of both decision-making and income distribution. Corporate management, on the other hand, emphasizes its work to maximize shareholder value.

Centralized decision-making is at its best when quick and holistic decisions are needed. Warfare is an example of a situation where there is no time to discuss different decision options. However, a manager can become a bottleneck and the quality of decisions depends on the manager and the information available to him/her.

The execution of the leader’s orders is difficult without the involvement of subordinates. Compliance must be monitored. Rebels are punished and supporters are rewarded. Civil liberties such as freedom of expression and sources of livelihood are restricted. Media control and propaganda are management tools to stay in power, even as the number of lower-level leaders grows.

Ultimately, stifling citizen initiative and innovation will erode authoritarian societies. The palace revolution is a more likely option for them than a popular uprising.

In the corporate world, a subordinate is rewarded for obedience with pay, bonuses, employee benefits, and career advancement. Rebels and dangerous competitors, on the other hand, are fired or excluded from the networks.

Republic

The republic is a form of government that, throughout history, has proved to be a model in which nations have prospered with the ingenuity and entrepreneurship of large masses of people. Also on the business side, innovations largely take place in small business networks.

The republic is ruled by law, not by a ruler or a ruling elite. All people are born equal. The law is the same for everyone, and no one has privileges based on their identity. In the authoritarian model, typical ways to define a privileged class are descent, race, religion, language, gender, caste, age, party, and so on.

In the republics, decision-making is decentralized. Municipalities and provinces have self-government and decision-makers are fixed-term representatives of the people and elected by them. Major issues are decided by referendum. Organizations are low and decisions are made at the lowest possible level.

The constitutions of the republics define civil rights, which guarantee citizens e.g. the right to pursue a trade, to express one’s views and to be safe from unjustified arrests and penalties. They include safeguards to limit the potential for abuse of power.

As a consumer, a person makes his/her own purchasing decisions and companies adapt to consumer demand and its consequences.

An agile leader in a republican network?

So the world is changing as we get richer and get older. In a world of abundance, you don’t have to do everything yourself. For example, the music in Apple’s music store is not Apple’s own.

In the company, the manager finds that he/she no longer has subordinates, penalties and rewards. The people to whom he/she leads come from customers, several partners representing different suppliers and other stakeholders. There is no direct authority to command and influence must be earned. Still, together they form a team. Let’s think about leading a Utuber team.

It all starts with a change of attitude. The purpose of work, autonomy and self-development are of great importance to individuals. The team is based on trust, fairness, reciprocity, openness and respect. Our partners are professionals, not subcontractors or employees. They have other options.

Because our cooperation is based on the desire of equal partners to work together, we write cooperation agreements instead of an organizational chart. The Constitution of the Republic is equivalent to the shareholders’ agreement of the company’s founders. In projects, the participants have to get WIN-WIN-solution where each party’s responsibilities and rights are defined. The salary model is connected to the income stream received from the customer.

Of course, the agreement is only the starting point. An agile leader needs to be present, participate, listen, and serve his/her team. So what can he do for his team? Facilitation, counselling, mentoring, training and coaching are a key set of services, but on a case-by-case basis, there are a whole lot of more. Decisions are made by those who are best placed to do so. Openness, honesty, fairness and respect are crucial in interactions. The free rider problem will not be eliminated by mere agreements, despite security mechanisms. Everyone must grow in the responsibility and reciprocity required for cooperation.

Summary

The Republic model teaches companies how a large number of people can work effectively as a loosely networked community to solve complex, changing, and ambiguous problems. In addition to the laws, the parties need a strong belief that life can give more than a zero-sum game.

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