Sociocracy: The Worker Co-op Operating System

Over the last couple of years, I have had the incredible opportunity to work with Sociocracy For All (SoFA). This organization has worked diligently to bring the concepts of sociocracy out of the “best kept secret” category and into the mainstream of organizational culture. I sit on the Co-op Circle for SoFA which meets about every four weeks to discuss the aspects of building sociocratic practices in the co-op community.

Sociocracy offers a form of governance and management that operates on the fundamentals of inclusion, transparency, and consent of the governed. In the US, it has been referred to as Dynamic Governance due to the tradition of red-baiting in the US. The method, however, seems like a perfect model for worker-owned and operated businesses.

If this is the first time that you have heard the term, I would invite you to visit SoFA’s website and watch a few of the intro videos. Essentially, it was a system of interlinked work groups (called circles) that are based on the primary aim of the circle. For instance the board of directors might be called the “mission circle” and it job would be that of any board: create policies that enhance the mission and review other circles in terms of their ability to enhance the mission.

In this sense, Sociocracy offers a different form of hierarchy. The format is often considered a “hierarchy of work, not a hierarchy of power.” It turns out, that worker co-ops create this concept even if they don’t follow all the standard formats. Two large co-ops, Union Cab of Madison and Rainbow Grocery Co-op both use a systems of autonomous management groups linked to a steering committee or team. Again, Rainbow and Union don’t use “Sociocracy”, but one can easily see the connection between these organic co-op structures and the official format of Sociocracy.

There are better posts and video about the ins-and-outs of sociocracy. The aspect of Sociocracy hat doesn’t always get discussed or understood is that it challenges the notion that “governance” and “management” are separate things. In a worker co-op, in my opinion, they simply aren’t separate. The same people making governance decisions make management decisions and often the line between the two is fuzzy. In a traditional organization based on the capitalist mode, Governance is designed to protect the equity of the owners against labor while management is designed to control labor in the furtherance of protecting that equity. When worker co-ops adopt this model, they fundamentally undermine their missions. The very aspect of a traditional hierarchy privileges capital over labor (see Kathy Ferguson’s Feminist Case Against Bureaucracy).

Worker co-ops need a different governance model. The Collective/Consensus model works as long as the co-op is small, but it can also be difficult to change once the organization gets too big to effectively manage as a collective and can also be rife with informal hierarchy and soft power. Sociocracy allows small co-ops to learn strong transparent governance/management practices in a system that grows with the organization.

Sociocracy, of course, doesn’t automatically remove soft power and informal hierarchies, but it does create a place where those aspects can be contained, exposed, and reduced in power. When I first learned about it, I realized that Union Cab effectively stumbled its way into a sociocracy-like model. It seems to be an Operating System for cooperation in general, but for worker co-ops in particular.

About John McNamara

John spent 26 years with Union Cab of Madison Cooperative and currently helps develop co-op in the Pacific Northwest. He holds a Ph.D. in Business Administration and Masters in Management: Co-operatives and Credit Unions from Saint Mary's University. He has served on the board of the US Federation of Worker Cooperatives and the Board of Governors for the late, great Democracy at Work Network. He currently sits on the Co-op Circle for Sociocracy for All. He has taught on worker co-operatives and democratic management in the summer at The Evergreen State College and Presidio Graduate School.
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