Why democracy?
Blake Jones is a longtime student of inequity. While working as an engineer in Nepal, he was appalled at the unfairness of that country's caste system. In Egypt, he squirmed when colleagues chided him for wearing jeans "because it was unbefitting of my status." When he returned to the United States to work at a global engineering firm, Jones concluded that power and status in the workplace were largely a function of access to information. Those denied information grew disengaged and often quit. In 2004, Jones, with Wes Kennedy and Ray Tuomey, laid out the founding principles for their ideal company. Namasté Solar would be flat, employee owned, transparent, and democratically managed. "One person, one vote," says Jones. "It's the best way to make decisions and the right way."

The deal sounded sweet. In 2008, a number of large companies and private equity firms expressed interest in buying Namasté Solar and dramatically amping its growth. It was arguably the biggest decision ever faced by the business, which designs and installs solar-electricity systems. And Namasté would make it the same way it makes all decisions: painstakingly and communally.

And so began the meetings, weeks of them, including two daylong retreats. The company's co-owners (around 40 employees at the time) debated passionately, with some urging "Sell! Sell!" and others recommending caution. To ensure every voice was heard, large conclaves dispersed into small groups, in which more-reserved workers could comfortably speak their minds. Finally, the co-owners crowded into a conference room where, by a show of hands, they rejected the offer.

"We recognized our culture means everything to us," recalls Teri Lema, Namasté's business manager. "We decided we would rather make a go of it and stay small to preserve the way we do business."

Namasté Solar is an employee-owned cooperative in which more than 70 percent of workers hold stock and thus can vote. That stock is priced at $5,000 a share, and each employee can buy a single share. CEO Blake Jones would have liked the price to be higher, but on this as on many issues—whether to expand the company's service offerings, for example, or whether to open a Denver office—he found himself on the losing end of the democratic model that he and his co-founders put in place. "A 22-year-old recent college grad who is an apprentice installing solar panels on rooftops has the same vote as I have," says Jones. "I regularly don't get my way."

Namasté's evolving approach to democracy illustrates how a core cultural value scales with the size of a company's work force. In Namasté's first couple of years, decisions were made by consensus, and everyone voted on everything. At around 15 or 20 employees, Namasté switched to operating by consent. A single thumbs-down would table an issue, but employees could abstain from voting. At 35 employees, the company established a supermajority threshold of 60 percent, with questions attaining the magnitude of a possible sale requiring assent from two-thirds of the staff.

To prevent constant votes from dragging down productivity, the company created committees to decide narrower questions. Membership isn't restricted by role. An installer interested in marketing can sit on the marketing committee. A designer concerned about HR policies can sit on the human-resources committee. Decisions affecting everyone are made in one of the company's bimonthly Big Picture Meetings, usually so packed that people line up along the walls. There, an issue's "driver" (the person shepherding it to resolution) presents pros and cons for as long as 45 minutes, soliciting feedback throughout.

On rare occasions, decisions are made by the board, which is composed of five employees elected by their colleagues for one- or two-year terms. It was the board that voted to initiate the company's first-ever layoffs at the beginning of the year, when changes in Colorado's solar subsidy program suddenly altered the company's outlook. The board also considered options like cutting everyone's pay, "but then you take a hard look at the positions you have during times of feast that are unnecessary in times of famine and realize it's time to cut that job role, not just pay that person less," says Ryan Dulaney, a project manager who plans to run for a board seat in the next election. "I'm really proud of the way we handled it."

Jones says he fields frequent questions from outsiders about inefficiency—specifically, whether Namasté's elaborate decision-making apparatus cranks along too slowly. He argues that the company is, in fact, extremely efficient, because by the time a decision is made, employees are lined up behind it. "It takes our ship longer to change direction, but once we do pick a direction, everyone is rowing with full fervor, and we reach full speed more quickly," says Jones. "Even if people are in the dissent, they feel like their voice was heard."

As for the constant hits to his own authority, Jones doesn't care. "I'd rather people look at me as a peer or a fellow business owner than a boss," he says. "Something I've heard from other CEOs is that they feel very lonely at the top. I don't."