The focus of a not-for-profit is directed outside the organization itself, such as combating climate change or poverty. The fiscal health and sustainability of the organization often come second. Because of this, many organizations fall short or fail. The question is: how do stakeholders link the purpose and the organization to create an intentional, living organization which promotes the empowerment of its members? One answer lies in the implementation of a governance model from The Netherlands called sociocracy, practiced by Kees Boeke in the 1940s, then fully developed in the 1970s by Gerard Endenberg.
Gerard Endenberg and Kees Boeke met while Endenberg was a student at Boeke’s school in The Netherlands. Many years later, Endenberg asked himself this question: “I know how to steer power in mechanical and electrical systems… How can I steer power in human systems?” As an engineer and student of cybernetics, he believed the rewiring of power (as defined in scientific terms: the ability to do work) in organizations would accomplish this task. Endenberg used technical terms taken from systems dynamics, such as “power, tension, tolerance, variance, limits, correction, measurement, resistance, capacity, stress, dynamics” and others to describe the influences on the governance of an organization.
When faced with financial issues at their electronics firm, Endenberg’s parents challenged him to use this new method of governance to turn Endenberg Electronics’ financial statement from a loss to a profit. Endenberg recognized “human behavior as part of an open system, meaning that it is affected by the environment in which it exists”.[1] Within a year the company was profitable, and Endenberg Electronics became the first organization to successfully adopt sociocracy.
is a system of government in which the interests of all members of society are served equally.
Sociocracy is ruled by four governing principles.
The first is the principle of governing by consent. Consent is different from consensus. It means that no one can think of any reason not to proceed with a proposal. “Each organizational unit in a sociocratic organization constitutes a domain and has the responsibility for policy decisions within its defined scope. The people within a domain decide by consent how various operational decisions will be made. Allowing those that do the work, to plan the work means empowering each member to participate meaningfully in the creation and maintenance of an effective organization.
This process continues with the second governing principle, which establishes that a circle is a semi-autonomous and self-organizing unit that has its own aim. that delegates the leading, doing and measuring functions to its own members; maintains its own measuring functions to its own members; maintains its own memory systems and plans its own development. In circles the people who do the work, plan and measure the work.
Another sociocratic governing principle, and the first decision made by a new circle, is the election of officers. 
It is important to note here that the democratic process of voting creates a duality, where there are winners and losers, and the best person for the job is not always the one chosen. The process of election by consent allows leadership to surface from the least expected places, to the benefit of all.
There are four circle officers: the operational leader (elected by the next higher circle), the facilitator, the secretary, and the elected representative. The election of the circle facilitator provides an opportunity for anyone in the circle to serve as facilitator, not necessarily the person who is the operational leader. The election for the secretary and the feed-forward representative follows the election of the facilitator. The feed-forward representative is the voice of the circle to the next higher circle, or to a special project/temporary circle created for a single purpose. This person’s role is to support the flow of innovation and creativity upward hierarchically in a way that is not present in non-sociocratic organizations. The representative is able to participate fully in the decision making of the next higher circle. 
The double-link provides an opportunity for two people from the circle to provide direction (a leading function) and feedback (a measuring function) to the higher circle. An illustration of this final governing principle, called double-linking, is shown in this diagram.
Much of this explanation about dynamic governance, also called sociocracy, is taken directly from the book We the People: Consenting to a Deeper Democracy written by John Buck and Sharon Villines. If you would like to find out more about dynamic governance, you can download this document, CreativeForcesOfSelfOrganization or go to John’s website: GovernanceAlive.com.
Dynamic governance can be very effective in for-profit organizations too!
Cimbria Badenhausen, MBA, ENV SP 