Quickstart Guide to New Governance Models

This guide is intended for people wishing to improve the way their organization is structured and governed.

September 2020

---

Introduction: Why change your model?

Organizational governance is a discipline that is highly institutionalized. Driving change can seem daunting and it is very tempting to avoid internal conflicts by either reinforcing top-down decision-making processes or sticking to skin-deep consensus (consensus that is reached without a diversity of opinions).

However, top-down and consensus governance models only work in specific contexts. The environment and characteristics of your organization are constantly evolving. Its structure, leadership style and culture need to adapt to these changes. Here are few drivers of organizational change:

• Your values: people and organizations realize more than ever that diversity and inclusion are values worth fighting for. And these values might not be embedded in your current way of doing things.
• Your ecosystem: your customers, partners and suppliers are increasingly diverse, your decision-making process needs to be more inclusive in order to stay competitive.
• Your growth: some organizational models can work very effectively for small organizations and lead to disaster in larger ones. The bigger the organization, the more it needs to let “the Other” in and internalize the multiple facets of the ecosystem it operates in. 

The good news is that a wide array of organizational tools and frameworks have been developed over recent decades to meet these challenges. Some are based on radically new governance models, others make small but substantial changes to existing management practices. I have tried to classify them in easy-to-grasp sections so that readers can quickly find the most relevant tools for their organization. Please feel free to contact me if you have any other experience, tool or framework to share!

Familiarise yourself with alternative organizational theories 

Take 30 minutes or so to read our series of interviews with academics, ethicists and practitioners. Learn about the following overlapping concepts:

Books recommendations (some opposing viewpoints):

• Postmodern Management and Organization Theory: the text gives an overview of issues as they relate to management and organization theory and its history and assembles in one volume a variety of important works on postmodern philosophy–including feminist, cultural, and environmental philosophies.

• Organization Theory: Modern, Symbolic, and Postmodern Perspectives: in today’s organizations, stakeholders are of extreme importance. Postmodernists believe that organizations that satisfy the needs of all stakeholders perform better than those who don’t.
• Reinventing Organizations: the way we manage organizations seems increasingly out of date. We need more enlightened leaders, but we need something more: enlightened organizational structures and practices. Reinventing Organizations describes in practical detail how organizations large and small can operate in this new paradigm.
• Freedom, Inc.: Freedom, Inc.: by listening to employees instead of telling them what to do, by treating them as equals and not limiting information through a trickle-down hierarchy, and by encouraging a culture in which employees have commitments (something chosen) as opposed to jobs (something imposed), these companies liberated their workers, enabling them to fulfil their individual potential, which has led to more productive, loyal, and engaged workers, as well as significant measurable profits and growth.
• The Fortune at the Bottom of the Pyramid: typical images of poverty mask the fact that the very poor represent resilient entrepreneurs and value-conscious consumers. What is needed is a better approach to help the poor, an approach that involves partnering with them to innovate and achieve sustainable win–win scenarios.
• ’80s feminist organizational theory

Avoid the 4 Decision-Making Tyrannies

Decisions can be taken in four different ways, based on who makes decisions:

• Total freedom (structurelessness): each member of the organization can do everything they want.
• Consensus: members can only do what everybody in the organization agrees with (including themselves).
• Partial autonomy (decentralization): members of the organization can make decisions under certain conditions.
• No autonomy: all decisions are centralized.

Each of these four models is legitimate but can also develop into a form of tyranny.

The 4 Decision-Making Tyrannies

• Tyranny of structurelessness: lack of structure can provide the freedom needed for early stage grassroot movements but will leave their members exposed to external influences, pre-existing discriminations and power imbalances.
• Tyranny of consensus: what can work in small groups of like-minded people is likely to paralyze bigger organizations; everyone has a voice, but nothing gets done. Furthermore, a culture of consensus can discourage organizations from adding members with divergent views.
• Tyranny of the division of labor: the division of labour (and decision-making) allows an organization to be more productive, but the expertise and the specialization of each member can serve to limit their choices and prevent them from getting the global picture and making informed decisions.
• Tyranny of top-down decisions: the desire of an entrepreneur to lead and innovate is a positive quality in young organizations, but it can become a weakness in larger organizations where collaboration and members’ empowerment is key to sustainable growth.

Tyranny doesn’t come from any specific decision-making process, but from its blind and systematic application. Postmodernism is less about defining the right process than understanding the limitations of a given model and process (see the digressive approach for a broader theoretical foundation). The best you can do is to understand your dominant decision-making process and mitigate its tyranny through the use of other parallel mechanisms.

Structurelessness, consensus and top-down models all focus on the who: the validity of a decision is based solely on who makes it, whatever the scope and their motivation.

Decentralization is a model that not only looks at the who but also the why, what and how: a member of an organization might be entitled or not to make a decision based on:

• Their motivation and what they want to achieve (the why)
• Their duties and responsibilities (the what)
• The process followed to make their decision (the how)

Compared to other governance models, decentralization thus offers more opportunities to adopt a nuanced decision-making process. This doesn’t mean it cannot become tyrannical, but rather that more techniques exist to mitigate that risk (these techniques are typically adopted through a decision-making process that is not decentralized):

4 Steps to Bring the Other In

Whether your organization is decentralized, makes top-down decisions or seeks consensus, many of its decisions won’t fundamentally change if it doesn’t allow a diverse range of people to participate in its decision-making process. Here are suggested steps to bring the Other in:

Change by Doing (Break Old Patterns)

Often, adopting simple habits can have a bigger impact than complex reorganizations. Below are some initiatives to promote pluralism and postmodernism in your organization.