How - Dov Seidman [129]
SELF-GOVERNANCE ON THE SHOP FLOOR
We have three compelling reasons to embrace the idea of governing through culture: We can, we must, and we should do so.
We Can
The evolution in transparency and communication, the breakdown of the fortress, and everything else we have discussed about the new conditions in the twenty-first century enable us to see and affect culture on every level. We can identify, quantify, and systematize the dimensions of culture as never before, allowing us a unique opportunity to unleash its power and efficiency.
We Must
When I was asked to testify before the U.S. Federal Sentencing Commission when the committee was considering revisions to the Federal Sentencing Guidelines, I made a passionate argument about the centrality of culture to business governance.1 The committee heard from many other experts as well, and they incorporated these ideas into their new recommendations to judges dealing with corporate malfeasance. 2 The newest guidelines direct judges determining a company’s culpability for wrongdoing to evaluate an organization’s commitment to “promote an organizational culture that encourages ethical conduct and a commitment to compliance with the law.”3 The U.S. Department of Justice, interpreting the committee’s findings, made it even more clear, saying, “A corporation is directed by its management and management is responsible for a corporate culture in which criminal conduct is either discouraged or tacitly encouraged.”4 [italics added]
“Our work on the commission was nothing less than a battle for the hearts and minds of the people who work at companies,” Judge Ruben Castillo told me when we visited with each other in his chambers in Chicago.5 Castillo is vice chair of the commission and has served as a U.S. district judge for the Northern District of Illinois since 1994. “The guidelines became more than just a way to reduce [incidents calling for] fines and punishment; they aspire to induce higher values and bring the business community to higher levels of conduct.” As we move forward into an ever more transparent world, culture—the character of an organization—is now everyone’s responsibility.
We Should
Culture can’t be copied. The collective experience of any group of people forms a unique narrative, a story that lives and breathes in the halls, offices, and factories of that enterprise. The way people connect, spark against one another to create new ideas or refine old ones, solve problems, and overcome adversity builds the synapses that make an organization thrive or die, and no two groups conglomerate these experiences alike. Each is as unique as any family; the number of children can be the same but the ties that bind them will always be unique. Because of this singularity, culture, as an expression of the collective HOWs of a group or enterprise, gives us our greatest opportunity for differentiation. Many of the people I spoke to agreed. “Culture is a competitive advantage that’s very, very hard to imitate,” Charles Hampden-Turner told me. “If you have a particular culture, another company can come along and seize your patent and try to imitate your product, but your culture has the huge advantage of both being real to the people who understand it and of being almost impossible to emulate. It doesn’t ‘scale up,’ as people like to say, because it is a process rather than a product.”6
Just like we all know that one family can’t copy another, one company can’t copy another’s culture. I put this precise question to Massimo Ferragamo, chairman of Ferragamo USA, Inc., a subsidiary of Salvatore Ferragamo Italia, which controls sales and distribution of Ferragamo high-fashion products in North America. “Families cannot copy one another and companies cannot copy each other,” he told me.7 Massimo is the youngest of six children of Salvatore and Wanda Ferragamo. 8 It was Salvatore Ferragamo who started the family shoemaking business at age 15 in Italy.