Self-governance, an oft-used word in management literature, may not be as popular as it is made out to be. A recent global study found that less than one in 15 Indian companies practice self-governance, while the global scenario is even bleaker with less than one in 30 firms putting it into practice.
The report, developed by LRN and conducted by the Boston Research Group along with Research Data Technology and The Center for Effective Organizations at the University of Southern California, has found that self-governing organisations outperform competition on every one of the 14 performance outcomes in the study — including higher employee loyalty, customer satisfaction and lower misconduct.
Over 36,000 employees from 18 countries, including 3,000 from India, were surveyed for the study.
“That self-governance is rare in companies across the world would not be so significant a finding if it weren’t for our next most important take-away from this research: that self-governance companies outperform their peers on every important measure of desired outcomes and performance,” the report noted.
The study identifies three business models — blind obedience, informed acquiescence and self-governance. In India, about 68 per cent companies fall in the informed acquiescence bracket, while 26 per cent are in the blind obedience category. Globally, 43 per cent fall in the blind obedience category and 54 per cent in the informed acquiescence faction.
According to the study, 93 per cent employees in self-governing companies feel their company’s financial performance is better than the competition.
Also, the study found that globally only 11 per cent of organisations foster high-trust environments where employees are encouraged to take risks, make decisions, and innovate.
Further, only five per cent of the people surveyed said they were inspired to perform to their highest potential whereas, while 95 per cent said they were motivated by ‘carrot and stick’ methods or coerced through fear.
“It is important to note that the positive business outcomes associated with Self-Governance were found in every one of the 18 countries, with no exceptions. This would indicate that the aspirations of people are growing more homogeneous as distances among them shrink through advanced technologies, the trend toward transparency, and our increased economic interdependence,” the study said.