A Democratic Workplace?

I recently learned of an organization called WorldBlu (www.worldblu.com) that publishes an annual list of the nation’s Most Democratic Workplaces. The 2007 list includes businesses (and a few nonprofits) in technology, manufacturing, telecommunications, retail and service industries with combined annual revenue of nearly $3 billion. Some of the organizations on the list are BetterWorld Telecom, GE Aviation—Durham Engine Facility, Motek, and SRC Holdings Corporation. I find WorldBlu’s list interesting because they rank organizations on a variety of factors, including flat organizations, open-book management and employee ownership.

When I ran Science Applications International Corporation (SAIC), these same attributes were very much a part of our organizational culture, and I believe ultimately led to our success. It was no accident that SAIC has grown into the diversified company it is today, with revenues just shy of $9 billion a year. One thing we discovered early on was that there were two things we could do to encourage the full participation of our employees. First, we offered them the opportunity to become owners of the company through a variety of stock purchase programs. Second, we encouraged our employees to participate fully in making decisions that would impact the company’s future. In short, we empowered them to make a difference.
While SAIC had a formal organizational structure—with the usual hierarchy of board of directors, executives, managers, supervisors, and workers—this formal structure was balanced with widespread decision making at all levels of the organization. We never believed that only managers had the best ideas and solutions, and that only managers were uniquely qualified to make decisions that impacted the company and its customers. Encouragement of innovation and creativity originated at all levels of the organization and ideas were more often pushed from the bottom of the organization to the top rather than from the top to the bottom. As a result, SAIC evolved into a diversified and decentralized company where employees believed their opinions were important—and they were right. While we were never all democracy all of the time, we probably were more democratic than many of our competitors.

Numerous studies show that companies that empower their employees by allowing them to participate in the decision-making process can expect a variety of benefits. Along with a heightened sense of responsibility, employees report that they are more committed and more motivated—leading to a direct and positive impact on their performance and on the performance of their companies. Furthermore, the greater the degree of influence granted to employees, the greater the results. More influence and more participation results in increased performance.

It’s no accident that a particular poster—given to me by my wife, Betty—hung over my desk throughout my tenure at the helm of SAIC. This poster read, “None of us is as smart as all of us.” For me, those words ring just as true today as they did when I founded the company more than three decades ago. Democracy in business is a very powerful concept, just as it has been for our nation for more than 200 years. For those businesspeople brave enough to embrace the philosophy of employee participation in decision making, the results will be immediate as well as long lasting.
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Dr. J. Robert Beyster (La Jolla, CA) is the founder of Science Applications International Corporation (SAIC) and author of the book The SAIC Solution: How We Built an $8 Billion Employee-Owned Technology Company (John Wiley & Sons, 2007) with Peter Economy. Dr. Beyster served as CEO and chairman of the company for 35 years, and he promotes innovation and employee ownership through his Foundation for Enterprise Development and the Beyster Institute at the Rady School of Management, University of California San Diego.