One of the elements of decentralization is localized empowerment. The people closest to an industry and closest to their customers are the ones who should be making decisions for their companies and their teams. This is a fundamental practice within Volaris Group.
Within a given company structure, management style influences how much employees experience that localized empowerment, especially in terms of decision-making and strategy. Participatory management, also known as participative decision making, is a management philosophy that requires that employees (and customers) are included as key stakeholders in all activities related to problem solving, innovation, development, and strategy.
Another way to think about it is a management style where most decisions are made with the most feasible participation from those affected by the decisions.
The Benefits of Participatory Management
For knowledge workers, I would argue, participatory management is necessary for organizations to thrive. There are benefits and improved outcomes for individuals, managers, teams, and companies:
- Better product decisions. In a co-creative enterprise, customers can directly influence product development and/or build their own “stuff” from elements provided by the enterprise. The design process is different – with internal and external stakeholders involved from the start as co-creators, not personas or late-stage reviewers.
- Higher productivity. With ongoing and direct inputs from the people who interact directly with customers and/or with internal processes, teams can move quickly to reduce errors, streamline workflows, and deliver expected outcomes.
- Learning and career development. To take on ownership and responsibility, people will need to develop skills further, or pursue new skills, and also learn how to engage in strategic thinking. With participatory management, there are real-life actions and applications that go with personal development programs. This accelerates growth and leads to more fulfilling careers.
- Employee satisfaction. People who own the decisions and strategies in their work have more satisfaction in general based on great opportunities to do work that makes them proud and keeps them engaged.
- Diversity. Localized empowerment helps to dismantle the potential downside of small centralized decision-making frameworks where it’s easier to end up with hegemonies.
- Resilience. Employees have input and make contributions to decisions while being provided with an overall organizational point of view at the same time. This way, everyone stays informed of upcoming events so they will be aware of potential changes and can be proactive in embracing opportunities.
- Conflict reduction. With participation, teams have a better understanding of other processes and priorities, leading to higher tolerance and patience towards others. It’s likely that people will be more comfortable with following executive-driven changes.
Characteristics of Participatory Management
There are a few common elements that characterize participatory management:
- Transparency. Everyone needs to know how their company is doing against performance metrics (financials), how success is measured (both for the company and themselves), what their company’s challenges are, and what their customers’ challenges are.
- Trust. There needs to be trust in all directions for decentralized ownership & responsibility to work. Employees need to trust their managers. Managers need to trust their employees. And everyone needs to have confidence in a high level of organizational trust. Trust needs to be valued, it needs to be reciprocal, and it should be a guide for how you treat customers as well as employees.
- Delegation. The appropriate people/teams need to be able to make decisions at their level as soon as possible, with ways to get input, escalation, and support from their managers when they need it. Another aspect of delegation is how well managers transfer ownership/activities to someone else as their roles expand or as they move to more senior roles. It’s the opposite of micromanagement.
- Ownership and responsibility. Ownership and responsibility reside with the people who are closest to the people & projects. There needs to be agreement and understanding about guiderails and escalations. It’s not that there is no management, and ultimately, strategy lies with the leader of a company.
- Decision making. Decision making should be in the hands of the people/teams with the most knowledge and those who are most affected by the decisions. Customer intimacy should be included in decisions as a responsibility. This also covers employee participation in setting organizational goals, designing their roles, shaping company policies, and creating development plans.
- Collaboration. Because organizations are likely flatter in this model, collaboration becomes the glue that holds diverse teams together and it’s the only way to ensure that efforts are aligned to the appropriate goals and outcomes.
Participatory Management Isn’t as Common as You Might Think
Some might read about this concept and think that it’s kind of obvious – isn’t this the way that most software companies work? Surprisingly not. Sometimes in subtle ways.
Managers may “cling” to authority based on hierarchy, and to the idea that they need to fully shape employee roles or employee/customer experiences – they see these things as what makes them a “manager.” There are also pressures on managers to engage in resource management practices as way of better predicting and controlling performance.
To be clear, hierarchy is likely necessary. The few “flat org” holacracy experiments that have been followed over time have shown that it’s not really sustainable or a competitive advantage. But there is a continuum of how much command-and-control management structures have/need in an organization:
- Informational. Where a two-way flow of information is established,
- Consultative. Where final decisions are revised in group before implementation,
- Democratic. Where problems are analyzed together, and mutually acceptable solutions are decided on.
- Collective. Where the collective benefit outweighs the needs of the individuals.
Joao Gama describes this spectrum as going from individualism to collectivism. In your company, you may see some variation of these structures in your team and then across the organization. It may even vary based on the project at hand, which Gama calls the “structure”:
- Technical. The areas of domain knowledge of an employee or a group of employees, or potentially customers.
- Social. Work governance such as hours of work, rules and regulations at the workplace, welfare measures, workers’ safety, employee welfare, or health and safety. There are some regional differences for this structure – for example, countries with Workers Councils.
- Financial. Methods of value creation, cost cutting, mergers and acquisitions, and lay-offs. Co-creation can be a good strategy here, especially for value creation or cost cutting.
- Personnel. Recruitment and selection, work distribution, promotions, demotions or transfers, succession planning, grievance handling, settlements, and voluntary retirement. This is where management is more likely to be the primary decider.