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I’m a big fan of democracy. Giving people a voice and a say in their own affairs is fundamentally right and decent. I’m a big fan of republics as well. You need a strong central set of rules, which protects people and contains government. Democracies and Republics around the world rely mostly on capitalistic principles. It goes without saying that I’m a huge fan of capitalism because it’s the world’s great equalizer. Whether you come from Dharavi (the biggest slum in India) or Rocinha (the biggest favela in Brazil), you can succeed if you do 3 things according to the left-leaning Brookings Institute; stay in school, wait till 21 to get married/have kids, and get a full-time job. 

But what about your capitalistic venture aka your company? Is your company a democracy? Can a company be successful if it is run like a constitutional republic? In my opinion, no.

Although democratic principles are good for organizing governments, truly democratic companies slowly devolve into anarchy and most fail. Employers should value freedom and the rights of the individual but bigger companies that try to institute democratic systems eventually evolve into bloated bureaucracies. Workplace democracies have been tried around the globe, and only a tiny few have succeeded. If you’ve ever worked in “corporate America,” and 51.6% of us have, you’ll immediately understand how inefficient “decision by committee” can be. If you’ve ever heard the soul-crushing phrase “let’s have a meeting about the meeting,” you’re working in a bureaucracy. If you’ve spent any time at a company with more than 5,000 employees, you’ll understand that mediocrity floats to the top layer of the company like instant creamer in a styrofoam cup of lukewarm coffee. 

Successful companies, like Madison+Main, are benevolent dictatorships. Not a monarchy. #WhoMadeMeYourKing? Not an autocracy. #ExaltedRulerForLife Author and former OfficeMax CEO Michael Feuer wrote a book on this. A benevolent dictator, as a boss, has the collective best interest of the company at stake. The benevolent dictator will allow many forms of democracy within the company ranks and does a great job of looking after his or her people. At the end of the day, tough decisions need to be made by the person at the top of the pyramid. Don’t get me wrong, everyone in the organization can have great ideas and should be able to bring any idea or concern to the table, but strategic decisions need to be made by the Chief Executive. 

One year ago, I gave over the titles of President and CEO of Madison+Main to Molly Whitfield. Congrats to el Presidente on her one-year anniversary as M+M’s benevolent dictator! Trust me, the folks at Madison+Main are better off with a leader who is more benevolent than dictator. As always, I’d love to get your thoughts on the subject. What kind of structure works best for your company and why? Simply reply to this email and let me know. I reply to almost everyone, every week…sometimes.