Electing Business Leaders

Ideas that scare you are sometimes the very best ideas. This one might scare some business leaders.

I said in an earlier article about voting that: “I have often thought that business should harness the power of this type of accountability and allow employees to elect their management. If the employees lost faith in their management, they could call a vote of confidence.  If voted out, you are demoted or fired automatically. Perhaps that is a topic for a future article?”

Ever since the days of theory x vs. theory y, we have been looking for a leadership model that works best.  It was countered with theory z.  Then, in 1973 Robert Greenleaf introduced servant leadership.  Today, we see the ongoing repercussions in conscious leadership, enlightened leadership, conscious capitalism and / or multi stakeholder business trends.  The bright spots are highlighted in the business literature, and we wait for the revolution and the promised results and…  nothing much happens.  It turns out the bright spots are so interesting because they are still so rare.  Under stress, we tend to revert to the leadership that mimics our parent’s parenting style.  

What if the issue is not with the model, but instead with the approach and the reinforcing mechanisms?  That is why voting for our leaders in business might provide the answer.

Let me expand on what an experiment like this might look like.

Potential Benefits:

• It would lead to a higher degree of leadership accountability. We win as a team / business or you have to go.
• Absolute power cannot manifest, and, therefore, it cannot “corrupt absolutely” as the saying goes.  If you can be removed tomorrow by your team, then you must generate results for the team today to avoid going away.
• Servant leadership becomes the de facto way forward.  You cannot count on employee support if you are not enabling them for success.
• There would be a shorter path to dealing with incompetence in leadership positions.  If management ignores poor leadership the team can act on their own behalf.

A Potential Drawback:  “Nice” is not necessarily great leadership; Lesser leaders will not thrive in this system if that interpretation is made.  However, I think that employees would self correct, because no one wants to go down with the ship if the captain is incompetent but a nice person. 

Conditions for Success

A company that would try this experiment:

• Must have specific management/leadership philosophies in place.  For instance:
  • A servant leadership model that recognizes that a leader’s job is to enable the team’s success.  It is a paradoxical relationship where the leader works for them as much as they work for the leader.
  • Open book management similar to the Jack Stack example in the “Great Game of Business”.  Employees need to have clear, accessible, transparent scorecards, so they can see whether the team is succeeding. 
• Must have a carefully architected and implemented culture in place.  A strong / clear culture is necessary to fill in all of the gaps between policies, procedures, work instructions, and processes.  Without it, lesser leaders / employees will find a way to exploit those cracks.
• Must have an employee base selected, rewarded and developed for high engagement.  If we are going to trust one another to make wise decisions about the team makeup, they must have been selected and developed to make wise decisions.

Likely types of companies

• Employee owned companies have already taken a step in this direction.  It may suit them really well.
• In privately owned companies, the owner must be enthusiastic and the specifics around the owner’s role must be clearly defined in a way that makes them comfortable.  They may exclude themselves from the program or choose specific caveats. 
• A company that had done holacracy experiments would fit nicely (organically built teams with no formal leadership).  I think that the flaw of holocracy for most businesses is that people crave good leadership.
• Publicly held companies might fit the voting model the least.  A board of directors would never give up CEO selection, nor would the stock market be comfortable not knowing who the CEO is that they are betting upon.

How would it work?

I would implement one department at a time.  The implementation would happen at a time when there is current leadership stability.

At any time, a member of the team could call for a vote of confidence in any member of their chain of command anonymously.  That would trigger an anonymous vote of all employees in the chain of command.

If the leader carries a simple majority, they keep their job.  The presence and number of “No” votes would be used by the leader, their management, mentors and coaches as feedback for leadership development purposes.

If they do not carry a simple majority, they lose their current job and one of three options is possible:

1) They are demoted into an open position elsewhere in the company, but they would be subject to the rules of the program.  In practice, demotions tend not to work, so the appropriate caution should be put into the program to watch for results.

2) They are terminated.

3) They resign from the company.

Should there be an appeals process for leaders that lose a vote?  

• Food for thought:
  • Think of the terror of employees that vote “no” that there suboptimal boss may stay in their position / seek revenge
  • Would they ever vote honestly again?
  • Still there is wisdom in an independent review.  These are tough calls.
• How could the appeals process be scripted to be simple, practical and fast?
  • One day
  • An independent body could Interview all parties
  • Make a quick, but informed, decision regarding the path forward
• Could there be an independent body that reviews appeals?  Yes, they would have to be neutral, impartial, wise, and biased to upholding the vote

Note: This program would not eliminate the need for management to make decisions to deal with incompetent leadership independently through leadership development, corrective action, or termination.

Given the potential instability caused by a vote of confidence, a company should consider a period of stability after a vote of confidence.  For instance, “after a vote of confidence, there may not be another vote of confidence called for x months for that position.”

If there are open leadership positions on the team at any time, because of termination, company growth, retirement, resignation etc:

The management of that position would nominate as many qualified candidates as possible for consideration by the team of future direct reports.  The candidates could be from promotions, transfers or from outside the company.  In this case, qualified constitutes:

• They must have the skills, talents and attitudes to do the job effectively.
• They are someone that the leader would hire if they carried a simple majority of “yes” vote from the team on the question:  Would you hire / want to work for this person?

The management of the future leader would put together and give clear documentation to the team regarding what the requirements and “nice to haves” are for the position.

The team of future direct reports would participate in scrutiny of the candidate’s qualifications, in interviews, and be given any documentation helpful i.e. job descriptions, CVs, reference checks, the results of background checks etc.

For each candidate, the team of future direct reports would take an anonymous vote.  Any candidate that gets a simple majority of “yes” votes could be hired.  Note:  If multiple candidates have a majority yes votes, the management of the future leader makes the hiring decision.  Any candidate that gets a simple majority of “no” votes is eliminated from consideration.

Job Scorecard

• A job scorecard would be a useful tool in the hiring process.  It can help the hiring team assess the candidate’s potential.  It can also help with a possible vote of confidence in the future.
• If the team wants to oust the manager they must show that the manager is not meeting the job scorecard requirements. Objectiveness is key.  The process should leave room for missing job requirements on the scorecard.
• The scorecard should also include cultural and emotional/social intelligence scores.

Feedback would be given to any candidates that are declined to help them prepare for a more successful candidacy in the future.

Why does a call for a vote of confidence have to be anonymous / why does the vote have to be anonymous?  Remember, you are asking for employees to speak truth to power.  If you want them to do that, they cannot live in fear of poking a bees nest that backfires on them. 

Employees who wish to be nominated for future positions would spend their time in between openings to develop themselves as candidates through training, seeking experience, education, coaching, mentoring, and volunteering to lead projects.

The structure of the program would have to have safeguards for desperate times.  For instance, if an economic downturn necessitates austerity measures, tough decisions have to be made by competent leaders.  I suspect that a system could be drawn up by a team of wise employees that would implement a stand down period around certain types of events.  Think about something similar to when stock trading is suspended in a potential market crash so that cooler heads can prevail. 

Fatal flaw: How could we overcome the propensity of weak / scared leaders that might:

• Fire out dissent on their team? Potential answers:
  • Why wouldn’t the manager be subject to some sort of justification criteria?
  • They would need to provide evidence that the termination is justified.
• Select weak / “yes” men to hire or for promotion?  Potential answers:
  • We combat against that by having clear scorecards for performance. As well as cultural indicators that might suggest the leader is violating values.
  • An interesting criteria is how many of his direct reports have been promoted. This would be evidence that the leader is doing a good job developing employees.
• How could we protect innovative rebels?  Potential answers:
  • They would be hired with a clear mandate
  • The hiring process and the vote by the direct reports should also provide some protection.
  • The team should expect some “rebellious innovation”.  It is possible to be an innovative rebel and treat people well.  
  • We should have some clear guidelines/scorecards around innovation.

This is an idea at this point.  Help make it better.  What other flaws do you see?  What solutions to the flaws in the program as outlined might you suggest?  Let’s crowdsource this into a great experiment.  Put your ideas in the comments.

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