Business as a Means of Promoting Democracy
by Jeffrey S. Nielsen

Over the past several years we have all been inundated with news about the corruption of some business leaders and the criminal activity that seems so easily to infect business practices. Along with these negative images is the justifiable belief that most businesses are very hierarchical and undemocratic in design. Many of our most idealistic young people avoid business careers for these reasons. This is unfortunate. I believe today business is where the most inspiring ideas for improving human life will be both explored and realized. I also believe that the best hope of teaching democracy and building stronger democratic governments - through greater participation - may be found in a new paradigm in organizational thinking that we could call, "peer thinking." In this essay I want to briefly present the hope that peer-based businesses can play a large role in creating stronger democracies.

Peer vs. Rank Thinking

In my forthcoming book, The Myth of Leadership: Creating Leaderless Organizations (May 2004), I present this new paradigm in management thinking and contrast it with rank thinking. The book is based on my experience over many years traveling across several countries working to make organizational life more meaningful, joyful, and prosperous. I was surprised to discover that a frequent obstacle to improving organizations was our common concept of leader and practice of leadership. Sadly, most of us make assumptions about our place and role in organizations that limit our genuine opportunities for growth. In general, these assumptions involve the significance we place on our concept of leadership, and the privileges we bestow upon our leaders - frequently to the detriment of others in our organizations. I have called these assumptions the myth of leadership, and they rationalize the rank thinking that makes so much of organizational life unfulfilling and undemocratic.

I define rank thinking as the belief that only a few in any organization (generally the designated leaders) should be given special privilege to monopolize information, control decision-making, and command obedience from the vast majority either through coercive or manipulative power. Peer thinking, on the other hand, I define as the belief that everyone in the organization should have equal privilege to share in information, participate in the decision-making process, and choose to follow through persuasive means.

I have learned through much good and bad experience that genuine communication tends to occur only between peers, and secrecy more often than not breeds corruption and abuse of power. It should not be unexpected when organizations, or governments for that matter, that practice the rank thinking of the myth of leadership find poor communication the norm, discover a growing gap between reality and the mindset of the top executives, and perhaps even wind up in court facing criminal charges. Peer thinking, on the other hand, is necessary for a successful democracy. It aptly expresses the values of liberty, equality, autonomy, and self-determination that are fundamental to democratic beliefs. In fact, countries where rank thinking dominates will find democratic rhetoric is merely a cover for more oligarchic special interests.


Democracy has become almost universally recognized and celebrated as the best and most legitimate form of government, and it is desired by the vast majority of the world's inhabitants. Indeed, Freedom House has called the twentieth century the "Century of Democracy." They report that in 1900 there were no countries with universal suffrage, but monarchies and empires ruled the world, and even the United States withheld voting rights from women. But by 2000, 120 of the 192 United Nations recognized countries had fully franchised all their citizens - representing 62.5 percent of the world's population. Yet there is a paradox masked by these numbers. Namely, even though democracy is nearly universally valued and desired, in democratic countries there is a stunning apathy and lack of participation in the democratic process.

IDEA (Institute for Democratic and Electoral Assistance) reports voter participation rates globally over the past ten years at around 64 percent. In the US those rates drop to 50 percent, and this only in presidential election years. In off years, voter turnout dropped significantly. In Canada, the voting rate is about 68 percent. In my own region of the U.S., voter turnout in a recent local election barely made it to 20 percent. Yet low voter turnout is just one indication of citizen apathy. There is even less participation in important democratic processes like attending political meetings, town councils, corresponding with elected representatives, etc. Such pathetic participation in self-government raises questions. Why and what, if anything, should be done about it?

M. I. Finley, in his excellent book, Democracy Ancient and Modern, blames this apathy of citizens in democratic countries, and explains such little participation, as an unhealthy response to the perception of imbalance in the access to political power by special interests. Many citizens assume that money can buy access to political decision makers and corrupt government policy formation. This is a reasonable assumption given a decision-making process in democratically elected governments that is too often closed rather than open and opaque rather than transparent. Such lack of full disclosure and closed meetings are not surprising since those special interests and the political leaders for the most part accept the rank-based myth of leadership as reality.

Finley suggests that these elitist practitioners of democracy are not unhappy with low participation rates, but favor such minimalist approaches that give citizens the opportunity to vote in more or less fair elections every few years, but discourages greater deliberative participation. We recognize that these political leaders base their governance on the assumptions that I have identified as the myth of leadership. The rank-based thinking described in the Myth of Leadership creates the powerful belief that only a relatively few "gifted" individuals can be anointed leaders and so trusted to make the decisions and do the commanding and controlling of everyone else. Such rank-based thinking must be challenged. A healthy democracy, like a healthy workplace organization, requires peer thinking where openness and transparency are the norms.

Peer Competencies

A way is needed to both inspire greater participation in democratic processes and to develop certain peer competencies among citizens. Competencies like consensus decision making, open communication, and listening to differences. Yet few people today ever have the experience of peer practices and so never have had the opportunity to develop these competencies, especially working in mostly rank-based organizations. So where will they get this experience? Business can be the primary vehicle to promote democracy when we begin to create peer-based organizations that challenge this myth of leadership and the rank-thinking that dominates organizational life. Peer-based organizations can promote greater participation in our political systems and strengthen our democracies by giving them concrete experience in these competencies.

People desire greater autonomy and self-determination but acquiesce to rank-based authority out of insecurity and ignorance of other possibilities. My experience has been that when people have the opportunity for greater control over their life by having open access to information and being active participants in making the decisions affecting their own well-being, they not only rise to the challenge, but excel. When people have some measure of control over their own destinies, productivity and joy increase. Since we spend the majority of our waking life in workplace organizations, it seems our organizational life is a leverage point to develop and practice the core competencies of peer thinking so essential to a healthy democracy. Our workplaces will also improve as we gain the productivity unleashed by treating one another as peers, and nowhere is there greater incentive and motivation to succeed than in business. A brief look at the key values of peer-based organizations will be helpful.

Peer-Based Organizations

The governing values of a peer-based organization are:

  • Openness

  • Transparency

  • Competence

  • Alignment

Openness is the value of full disclosure of information to all individuals in the organization. It is a prima facie assumption against secrets. Of course, there are exceptions to full disclosure, but such exceptions must be justified and infrequent. Openness is also the value of communication that flows without barriers between all members of the organization.

Transparency is the value of full participation in the decision making process by every member of the organization to the level and degree of their sense of comfort and desire. It is opposed to any and all hidden agendas that corrupt genuine community within the organization.

Competence is the value of continuous learning by every individual in the organization. There are certain intellectual skills required that everyone has the ability to develop, but not everyone has had the opportunity to develop. Things like decision-making, problem-solving, strategic thinking, and active listening to others. All members of the organization need to develop these skills so they can fully contribute.

Alignment is the value of engaging the entire organization around common interests. A constant struggle in every rank-based organization is ameliorating the conflict between an individual's self-interest and the best interest of the whole organization. In the absence of openness and transparency, this conflict is exacerbated. Through full disclosure of information, open communication, and the opportunity to participate in decision making, an individual's sense of self-interest is enlarged to include the interest of all others in the organization.

Business as a Means of Promoting Democracy

Peer thinking assumes that we each have equal privilege to speak and an obligation to listen. Peer-based organizations create a space - an arena - where individuals can develop the competencies of peer thinking required for a healthy democracy. They learn enlightened deliberation as peers, where all have equal standing to enjoy access to information and participate in the decision-making process. Once a person has experienced this he or she will begin to demand openness and transparency from all political leaders and will be motivated to participate more in community life. Once a person has experienced the satisfaction of peer thinking in one area of life, he or she will seek it in all areas of life. So begins a life-time pursuit of learning and developing the competencies of democratic-peer deliberation. That is the thesis anyway - that the best hope of teaching democracy and building stronger democratic governments may be found in this new paradigm in organizational thinking.

We should acknowledge the occasional nastiness of business. But we should remember to celebrate its wonderful expression of human possibilities. The noble purpose of learning peer competencies for the possibility of greater democratic participation will appeal to all of our desire to make a meaningful difference. I believe that creating more peer-based organizations in business will promote greater participation in our public life and so healthier democracies. We are co-creators with one another of our future. It should be a future we accomplish, not through coercion and rank-based power, but through the subtle influence of persuasion and the power of peer thinking.

Jeffrey Nielsen is the founder of Intellectual Capital Development. Jeff is passionate about working with organizations to develop robust strategic business models that help them be creative, solve problems, and optimally adapt to their environment to create success. He specializes in strategic consulting and training so that all individuals in an organization act strategically, acquire knowledge-based skills that will not become obsolete, and begin to think like owners. To this end, he has created strategy, training, and organizational design models that give organizations the ability to transform challenges and crises in the environment for their gain and growth. He can be reached at or .

The Myth of Leadership:
Creating Leaderless Organizations

by Jeffrey S. Nielsen
Consulting Psychologists Press, Inc.
May 2004

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Copyright 2004 by Jeffrey S. Nielsen. All rights reserved.

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