Participative Management & The Bottom Line

Participative management is known by many names: affiliative, democratic, or consultative management. Whatever you call it, this type of leadership is the antithesis of traditional forms of autocratic and unilateral styles of management. In participative management, all employees have a say in the policies and decisions at their place of work.

With human motivation as its underlying impetus, democratic management can apply to any organization or business across industries.

If you’re in a company that isn’t using participative management, you may wish to reconsider. The approach increases employee engagement, helps in better decision-making, and is good for the bottom line.

Collaboration is where it’s at

Company culture is proven to be important to a company’s success—and company culture and management style are intimately intertwined. The problem is there’s a disconnect between how company leaders and their employees view their organization’s culture. Most C-suite and board members (63 percent) think their company culture is strong, but 41 percent of employees disagree, according to research by the Katzenbach Center. In fact, a full 80 percent of survey respondents say their workplace culture needs to change.

The many pros and few cons of participative management

Now that you see that a change in your approach to management might be beneficial, will a participative style fit your needs?

Probably the biggest advantage to participative management is that employees get a sense of ownership in the company. Empowered to think collaboratively, employees communicate with different levels and departments throughout the company, which allows them to acquire a deeper understanding of the organization itself as well as the industry.

Empowerment leads to higher engagement and increases motivation, all of which leads to better productivity and more effective use of resources. With everyone having a say in how a company is run, there’s an unending source of ideas to consider that might benefit the business, plus the relationship between management and employees is stronger and supported by trust.

According to the American Management Association, there are also softer benefits when a company works together as a team. These include:

    When employees aren’t engaged at work, organizations experience increased absenteeism and turnover along with poorer quality of work. Those factors lead to lower productivity and reduced profitability.

    That said, participatory-style management is time-consuming and can cause conflicts when proposals are not acted on or when they’re disagreed with. Managers may at first be opposed to the management style because it can seem to undermine their own role in the company. And it does place added responsibility on the shoulders of employees who may not want to be involved and could resist participating.

    Participative management in practice

    Management consultants and co-founders of The Corporate Rebels, Joose Minnaar and Pim de Morree, tell the story of Semco, a traditional factory in São Paulo, Brazil, that transformed employee motivation and participation simply by changing its management style. The move from autocratic to participatory management started with asking employees how to make the cafeteria food better and what color the company’s uniforms should be.

    As changes suggested by employees were put into practice, including flexible working hours and setting their own production targets and salaries, employee engagement, morale, and motivation grew and workers came up with even more ideas. The company prospered, growing from 90 to 5,000 employees at its peak.

    How can someone develop participative management skills?

    Effective communication is the most crucial aspect of an open, consultative management style. A manager or company leader needs to actively seek out and encourage contributions from employees, and then carefully consider those suggestions in order to make fully informed decisions.

    It’s important to be transparent when soliciting input. “Good leaders…tend to seek diverse opinions and do not try to silence dissenting voices or those that offer a less popular point of view,” explains educational consultant Kendra Cherry.

    Another part of a democratic leadership is being involved in every aspect of the business. “Don’t believe for one second that you’re above a certain task, and never hesitate to get in the trenches with your employees to get the little things done when you see the need,” writes John Piester, president of brand engagement agency RedPeg Marketing. When you assist with a menial task on a client project or help an intern with a small job, you demonstrate to your employees that you’re willing to do whatever it takes to succeed, he explains. And they’ll follow your example.

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