How does an organization manage activities and make decisions in a more collaborative economy? As the sharing economy grows, we will all likely be involved in more organizations that are designed to provide for our personal and community needs. Stakeholder participation is critical to ensure that the organization can take into account everyone’s needs.

In addition, a well-thought-out decision-making process is crucial to ensuring that a group can respond effectively to participating stakeholders. Leaving decisions to a small governing board will not necessarily be enough, even if that board is elected by stakeholders. Nor will it always be appropriate to allow decisions to be made by majority rule, which can sometimes result in alienation of a minority within the group.

Governance in the sharing economy is highly participatory and inclusive and requires that all actions of a group are adequately considered and adapted to meet multiple needs. The new economy therefore demands that we all become fluent in participatory governance models.

How My Organization Will Make Decisions

This website provides a great deal of information about how organizations consider or even involve multiple stakeholders in decision-making. The composition and selection of an organization’s governing body is a key consideration in ensuring that decisions are truly representative of the needs of stakeholders. In addition, here are some other questions to consider in relation to organizational governance:

1.  In what way will stakeholders participate in decisions?

There is a broad spectrum of options for involving stakeholders in decision-making. In small worker-owned collectives, every worker-owner serves on the board of directors. In very large cooperatives where members are geographically spread out, the primary way that members participate in governance is by electing the board of directors. In that respect, participation in governance is minimal. The middle ground holds many promising options. Through governance and operational models like dynamic self governance (described below) and holacracy, ¹ governance of an organization is often dispersed into multiple semi-autonomous spheres, which allows for high levels of participation even in large organizations.

2.  What are the spheres of authority and management?

Even in cooperatives that are collectively governed by their members, innumerable decisions are delegated to individuals, committees, and management teams. How does an organization structure multiple spheres of authority and operations, and how do those spheres interact and remain accountable to the organization as a whole? This is where we feel that models like dynamic self governance and holacracy can be especially helpful.

3.  How are meetings conducted and proposals considered?

The ways in which meetings are conducted and proposals considered can greatly impact the extent to which an organization is meaningfully able to listen to the needs of stakeholders and respond to tensions that arise. Many organizations adopt specific procedures for ensuring that proposals and issues are adequately discussed. Traditional organizations often use Robert’s Rules of Order to ensure that there is consistency in how a meeting is held and how items are discussed. Groups that require consensus to make decisions generally adopt a very different set of procedures, which are described below. Dynamic self-governance and holacracy models both tend to use carefully structured procedures for meetings and the consideration of proposals.

4.  What is the process for arriving at a decision?

Can a majority vote carry a decision? Would a two-thirds vote be more representative? Should the group seek consensus? How will the group handle disagreement and formal blocks to consensus?

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Consensus Decision-making

By Tree Bressen

Every group makes decisions. A group of friends may decide what movie to watch, a car-sharing group decides how long someone can use a shared vehicle, a credit union decides what interest rate to offer its depositors. The larger and more formal the organization, the more formal their decision-making procedure is likely to be.

Every group faces a variety of decisions, sorted into categories that are handled differently. For example, in a group of friends, how to dress is probably a personal decision, whereas for employees at the credit union, how to dress is likely an organizational decision. Just because something is an organizational decision does not mean that everyone in the organization necessarily participates in the making of that decision; at the credit union, for example, the branch manager may have authority to set that policy, and then the tellers are expected to follow it. For any type of decision, the power to decide it may be given:

(a)  to one person (may be someone in a leadership or managerial role, or may be any member acting autonomously);

(b) to a subgroup (for example, the board of a food co-op, or the media committee of an activist collective); or

(c)  to the group as a whole.

The more clear a group is on which decisions get made by whom, the more easily their self-governance runs.

When a decision is being made by more than one person (either a subgroup or the group as a whole), then the group needs to have a way to do that. The two most well-known “decision rules” are

(1) Consensus (meaning all members must consent for a decision to move forward); and

(2) Majority vote (meaning agreement by a set majority of participants is sufficient to make a decision official).

In reality there is a spectrum of options, ranging from 51 percent vote through attempts at consensus with a super-majority voting fallback (typically 75 percent to 90 percent), through “consensus minus one,” on to full consensus required. While voting may be faster, consensus offers a few key advantages:

•  More effective implementation: When people’s ideas and concerns are taken into account, then they are much more likely to actively participate in making something happen. If a participant with a minority position is overruled, they are naturally unlikely to help carry out the decision with enthusiasm.

•  Building connection among the members: Using consensus as a decision rule means taking the time to find unity on how to proceed before moving forward. It is a synthesizing process. Voting creates winners and losers, thus it has an inherent polarizing effect.

•  Higher quality decisions: Integrating the wisdom of more people into the decision generally results in better, smarter, more “co-intelligent” decisions that serve a group well into the future.

Humans have been making decisions together by consensus for millennia and carry innate knowledge of how to do that. At the same time, because English-speaking societies are currently immersed in a culture of separation, we need support, training, and models to help us. Every group’s process is a little different according to its own organic development. In order for your group to write its own consensus policy, some questions you’ll need to answer include the following.

If meeting agendas are formed in advance (usually a good idea), how does that happen, when, and by whom?

The planner role includes figuring out what items will be on the agenda, for how long, and in what order. If the agenda planner is not the facilitator of the meeting, they’ll both need to work together to ensure that the agenda is realistic for the time available and that each person presenting an item is fully prepared, and to select formats. While our dominant image of a meeting is one person speaking at a time to an assembled group, many meetings can be improved by the creative use of alternative formats such as small group break-outs, fishbowls (where a subset of the group talks in the middle while others silently witness), spectrum line-ups (asking people to stand along a line that represents a spectrum of opinion on the issue at hand), and others.

Often people want to bring items to the meeting agenda that don’t actually require full group involvement or should start first with a committee discussion—so the planner role includes aspects of gate-keeping (reserving full group time for the things that most need substantive interaction) and education (helping newer or forgetful members learn how to move items forward through appropriate means).

What process happens outside the official full-group meetings?

Every group has informal conversations on topics of mutual interest that naturally arise in the course of working together. Some groups deliberately acknowledge this as part of their process. If someone has strong feelings on an issue, seeking him/her out to talk it over outside the meeting may lead to a more effective conversation later in the official discussion.

Some groups use a log or decision board to decide smaller items that probably don’t need full-group discussion. For example, new procedures proposed by an area manager or team may be announced or even discussed in writing, and unless someone says it needs to come to a meeting, then the written version is considered accepted. Be wary, obviously, of discussing anything emotionally charged in writing or via email, as those are generally not the most suitable venues for handling upsets.

Some groups hold separate gatherings in order to have time to discuss issues without any pressure to make a decision. For example, a committee may host a salon or “distillery” in order to get input from others on a matter of interest to the group. These kinds of sessions are often very useful, especially if those who disagree the most commit to being there.

For more complex proposals, there will almost certainly be some detailed work on them by one person or a committee, rather than hashing out every word on the fly in plenary (whole-group meeting). There is commonly an iterative back-and-forth between plenary and committee work, where ideas and drafts are brought forth, receive feedback, are revised and brought forth again. For example, a member or team broaches a subject by putting it onto the meeting agenda; then possible responses are discussed, and the team writes a specific proposal based on that discussion, which the plenary then considers.

What signals, if any, are used to let the facilitator and the group know participants’ input?

The most common signal in any meeting is, of course, raising one’s hand to indicate desire to speak. Larger groups often find it helpful to have additional visual cues, in order to help manage the speaking order and to let people know where others in the room are at. Some groups use hand signals, while others use colored cards. There are often two sets, depending on whether the meeting is in a discussion phase or a decision phase. A typical signal set might include a discussion phase and a decision phase.

Discussion Phase

1.   Process point: Something in the process is off or can be improved.

2.   Question: I have a question to help me understand or evaluate the proposal.

3.   Point of information: I have an answer to a question that’s been asked, or factual correction only.

4.   Comment: I want to offer an idea/opinion/feeling/concern.

5.   Vibes: I have an emotional response to the topic that I need to share. (Groups that use this signal normally have a procedure that happens following it, for example, someone automatically offers to reflect back what the speaker just said, before proceeding further.)

Decision Phase

1.   Agreement

2.   Consent with Reservations

3.   Stand Aside

4.   Block

5.   Abstain (usually signified by not using any of the signals)

While in some groups silence might signify consent, this approach is not generally recommended. Having some active sign for consent (saying “yes,” thumbs up, nodding head, etc.) prevents anyone from later ducking responsibility for the decision by saying, “I was in the room, but did not really agree, I just didn’t speak up in time.”

How will our group respond robustly to inappropriate blocks?

As explained below, the consensus process gives substantial power to individuals to make their own discernment as to whether a proposal is in the best interest of the group. That power needs to be balanced with limits and responsibilities. In other words, there needs to be some way to deal with a member who is blocking inappropriately. The most effective groups have both cultural and procedural means of doing this.

Cultural methods include

•  Genuinely honoring dissenting viewpoints, including staying in relationship with those who disagree and not isolating them;

•  Avoiding use of the word “block” prematurely by using the framing of “concerns” until after a thorough discussion has taken place and you are actually at the call for consensus; and

•  Spreading the idea that if you’ve blocked an emerging consensus half a dozen times in your lifetime (for all the groups you are part of), you’ve used up your quota.

Procedural methods include

•  Requiring anyone who is blocking to convene extra meetings in an effort to work out an alternative, within a time limit, or else their block is automatically lifted;

•  Requiring group validation of a block in some form; for example, saying that a block does not count unless at least one other member agrees it is valid, or 75 percent of the group, or the executive team or steering council of the organization; and

•  Using a fallback vote, as explained below.

Is there a voting fallback, and if so, how does it operate?

Many groups using consensus choose to have a voting fallback in place in case there is an urgent need for a decision and no consensus has been found. Typically these fallbacks are not invoked frequently, but their existence serves as a reassurance and as a guard against tyranny of the minority. If you are going to have a fallback, you need to be clear on the circumstances under which it is invoked and what its procedures are. Often such a vote has a super-majority threshold, such as 75 percent or 90 percent rather than 51 percent, to avoid a complete split of the group.

There are also some non-policy questions worth considering, such as:

1.   Are we clear on the purpose of our group and its meetings?

2.   Aside from having a clear policy, what will the group do to make meetings fun and fulfilling, nurturing a positive spirit?

3.   Groups run better when the people involved get along well together. How will our group’s interpersonal relationships be nourished? What will help members feel appreciated?

4.   How will incoming members get trained in the decision-making process?

5.   How will facilitators (and minute-takers, agenda planners, etc.) be trained and supported?

Resources:

• Here is a SAMPLE CONSENSUS POLICY

•  Tree Bressen’s website, filled with free articles, handouts, and pointers to yet more resources; available at www.treegroup.info.

•  Group Works deck, published by the Group Pattern Language Project. Distills the core wisdom of good meetings into an excellent hands-on tool; available at www.groupworksdeck.org.

•  Seeds for Change (UK) has a wonderful website on consensus decision-making: their writing is straightforward, thorough, values-based, and includes a historical and multicultural perspective; available at www.seedsforchange.org.uk/free/res#grp.

•  Starhawks’s “Five-Fold Path of Productive Meetings,” a free bonus chapter from her book The Empowerment Manual: A Guide for Collaborative Groups; available at www.starhawk.org/Empowerment_Five-Fold-Path.pdf.

•  Training for Change has a great collection of tools and exercises on topics such as diversity, strategy, and team-building; available at www.trainingforchange.org.

•  Vernal Project. Randy Schutt, long-time activist, has a dozen short papers on cooperative decision-making. See, for example, “Getting Unstuck: Common Problems in Meetings and Some Solutions”; available at www.vernalproject.org/papers/Process.html.

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Dynamic Self Governance and Sociocracy

By Gaya Erlandson, PhD

Sharing is a vital aspect of community building. By uniting isolated neighbors into caring networks, sharing has the capacity to create communities of people who understand that their greatest source of abundance is in their shared, human assets. Parents who struggle alone to provide for their families, for example, can collaborate with neighbors for reliable, quality childcare, teen mentoring with local seniors, and meal and ride sharing.

Key to community building, however, is good governance and decision-making processes. Being a long-committed community-builder, I am excited to describe a highly effective governance system that enables communities to be thriving contexts of caring, collaborative relationships.

What is Dynamic Self Governance or Sociocracy?

Dynamic Self Governance (DSG) is an innovative approach to governance that

•  Streamlines decision-making while reducing tension around power;

•  Maximizes decision-making effectiveness and efficiency;

•  Kindles creativity, innovation, and entrepreneurial spirit;

•  Decreases number of meetings and heightens productivity of meetings;

•  Increases individual engagement, productivity, and commitment;

•  Builds relationships and community belonging; and

•  Provides a structure that assures ongoing progress, learning, and improvement.

In much of the world, Dynamic Self Governance is called “sociocracy” based on the Latin and Greek words socius meaning “social familiarity” and kratei meaning “governance.” With roots dating back to 1851 when Auguste Comte coined the term, sociocracy has been developed extensively by Gerard Endenburg in the Netherlands, starting in 1970 when he began applying its principles to his electrical engineering corporation.

Sociocracy was brought to the United States by business consultant John Buck, who has studied with Endenburg since the 1980s. To date, sociocracy has been implemented in hundreds of organizations around the world—private and public schools and universities, professional groups, large and small businesses, government agencies, and intentional communities. In the United States, sociocracy is largely referred to as Dynamic Self Governance (DSG).

Structure and Principles

DSG can be pictured as a hierarchy of circles reflecting different levels of work, not control. Circles are groups of 2 to 40 people who know each other and who have a particular aim or job within a business or community organization. A simple three-tiered hierarchy includes the Top Circle, made up of those heading the organization (Board of Directors, CEO, CFO, etc.) and a representative from the next circle down called the General Circle. The General Circle is made up of representatives from the circles at the third level (sometimes referred to as departments, committees, etc.) and also has its own representative in each of the lowest level circles as well as in the Top Circle (see double-linking below).

The four principles of Dynamic Governance are simple, but have dramatic effects.

1.   Consent: Policy decisions are made by consent. Consent means members must offer a well-reasoned “paramount objection” (relevant to stated aims) so it can be addressed. Rather than generating a negative turning point, paramount objections often result in the opposite. Discord and chaos are embraced as opportunities to improve the proposal—and as opportunities for the group to build trust and understanding. In articulating objections, for example, members learn about the needs, gifts, and ideas of the others. They also gain clarity on their own motivation, goals, and ideas.

2.   Circles of Equivalence: Members within each circle are highly involved in determining meeting agendas, engaging in transparent elections, co-creating proposals for policies or projects, making decisions, etc. Decisions that are implemented are monitored and the outcomes are measured by members of the circle to further the group’s learning and effectiveness.

3.   Double-Linking: All the circles are “double-linked.” Two people within each circle also are elected members of the next-higher circle. Because of this, ideas from the “lowest” circles can link upward and become implemented at any higher-level, or move laterally through the representatives. With a comprehensive feedback system that ensures communication up and down the organization, DSG’s double-linking optimizes an organization’s ability to respond to internal and external pressures. This self-optimization allows a business or community organization to be very resilient.

4.   Elections: Although some people are elected for specific tasks and functions over time, everyone within each circle has an equal vote and can be elected for any function. The election process assures both that the elected person is accepted by the group as the best available one to do the task, and that s/he understands what the task requires.

DSG and Sharing Economy Law

Writing DSG governing documents into a new or existing legal structure can be done rather easily. In Appendix E of the book We The People, Buck and Villines offer an example of DSG operating agreements and bylaws for a limited liability company (LLC).

•  Article 1 includes three sections entitled Organizational Model (describes the four principles), Structure (describes Top Circle, General Circle, Department Circles, etc.), and Investing and Working Partners.

•  Article 2, entitled “Top Circle,” gives details on its composition, roles, terms, meeting requirements, how to handle vacancies, etc.

•  Article 3 focuses on “Executive Officers of the Top Circle.” Significantly, the Board of Directors is part of the Top Circle and shall not meet separately from the Top Circle.

•  Article 4, entitled “Circle Management,” has several subsections. It is stated here, for example, that each circle shall be a separate organ of the LLC and shall be empowered to draft its own regulations (in agreement with Top Circle’s vision, etc.); that the next-higher circle, through its representative, is responsible for ensuring that decision-making in a circle below functions according to the operating agreement; that recording circle minutes be done properly, etc.

•  Article 5, entitled “Compensation and Profit Sharing,” offers an ingenious way to compensate investing and working partners (workers), with both fixed and variable payments, depending on profitability.

Living Well Care Home

An excellent example of an organization that implemented DSG is Living Well, an award-winning, level III, residential care and assisted-living facility in Bristol, Vermont. Under John Buck’s guidance in 2004, they adapted existing 501(c)(3) bylaws and other governing documents to implement the DSG principles and procedures described above.

Living Well is the first elder care facility in the United States to implement DSG. The Resident Circle, for example, meets regularly and actively discusses whatever is important to them—whether it be the menu, how services are provided, what activities to pursue, or how to measure outcomes. This circle also elects one of their members to represent them in the Staff Circle, and that person regularly checks in with all of the elders. Per Top Circle vision, Living Well removed toxic cleaning supplies as well as refined and artificial sugar. They started a community garden and hired a naturopathologist to see residents (in addition to the required medical staff). Within just six months, many residents showed noticeable improvements—physically, mentally, and socially. One woman thought to have severe dementia picked up the phone one day and had a lucid conversation with her family for the first time in years. Another who had previously just sat in her room started playing the piano in the living room. No one knew she had been a piano teacher. For further information on the Living Well Care Home, see http://LivingWellCareHome.org.

Implementing DSG from the Ground Up

DSG can also be implemented over time, from the ground up. For example, in a neighborhood with a Homeowners Association, a group of neighbors can begin with shared projects such as a garden. After experiencing success in sharing and making decisions together, members of this initial circle might seed new circles, such as one that creates a playground in a shared area or a food co-op. When several of these third-level circles exist, they could create a General Circle made up of representatives from each circle to better coordinate efforts. Eventually the Homeowners Association (or some other group) may adopt DSG and become the Top Circle and thus create a completely integrated (double-linked) DSG hierarchy. For an example of a cohousing community that has implemented DSG, see http://www.champlainvalleycohousing.org.

In short, DSG is a scalable, decision-making structure (from a few to countless, interlinked small groups) that guarantees the opportunity of self-directed contribution and optimal development for all within a sharing, caring context.

For a longer version of this article, along with a second article giving more of a description of the challenges and benefits of implementing DSG at Living Well, please go to http://www.livingnewstories.com.

References

•  Buck, John & Sharon Villines, We The People: Consenting to a Deeper Democracy, A Guide to Sociocratic Principles and Methods (Sociocracy.info, 2007), available at http://GovernanceAlive.com/.

•  Gerard Endenburg, Sociocracy as Social Design: Its Characteristics and Course of Development, as Theoretical Design and Practical Project (Translated, Eburon, 1997) (1998).

•  Gerard Endenburg. 1981. Sociocracy: The Organization of Decision-Making “No Objection” as the Principle of Sociocracy (Translated, Eburon, 1998) (1981).

•  John McKnight & Peter Block. The Abundant Community (Berrett-Koehler Publishers, 2010), available at http://ABCDinstitute.org/.

•  John P. Kretzmann & John L. McKnight Building Communities From the Inside Out: A Path Toward Finding and Mobilizing a Community’s Assets (ACTA Publications, 1993).