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By Root 1686 0

Massimo followed in his father’s footsteps and began working in the family company at age 12, putting shoes into boxes. Today, he, his mother, his siblings, their children, and a slew of other relatives preside over a luxury fashion empire with more than 200 retail locations around the world. As they embark on the journey to take the company public, Massimo has had ample opportunity to think about what will make the family business endure in the new millennium. And for him, it boils down to culture. “It is the culture that is not copiable. It is values and deep things that are very hard to duplicate. Those values are established by someone naturally in the life of the company, often without them even knowing it, and then gets carried through the threads of people who embrace those values and culture. I would venture to say this: Our U.S. company and our Japanese company and our Italian company, in three different parts of the world, stand a much greater chance of having a similar culture that two unrelated companies that occupy the same building in Florence.”

Organizations can win through culture, by getting their HOWs right and setting off Waves of creativity and purpose throughout their workforce. Winning today requires surpassing expectation because great companies don’t just fulfill contracts; they exceed them. They outbehave the competition. “It means giving an experience that no one else can do,” Ferragamo told me, “and it is very, very challenging. It means excellence to the nth degree.”

I asked Massimo for an example of how he thinks he can outbehave his competition. “I was talking to a lovely lady who works in our company,” he said. “She was on holiday and passed by one of our stores that was extremely busy. She doesn’t work in our retail stores, but she went in and said, ‘Let me give you a hand.’ It was 10:30 in the morning and she didn’t leave until 5:30 that evening, and this was her vacation. During the day, a customer came in and said to her, ‘I have my Christmas shopping to do and I do not know what to do, and I am in a hurry.’ She said, ‘Look, do you have a list?’ He gave it to her. To make a long story short, he sat down with a drink and she just brought over things. He left with a six- or seven-thousand-dollar purchase, and I am sure she made his day. The challenge for me is how do I duplicate that commitment, not as a happenstance, but as a standard? How do I create a culture where we can play a great game and keep on scoring so that everyone can still be that excited by the game? That is how you outbehave competition.”

In an informed acquiescence culture, you could do everything that the carrots and sticks require, play by the rules, and still never delight or surprise anyone. Self-governance is about giving people the freedom to act individually and creatively, to uncork their ability to surprise people and create delight. In a world where your HOWs matter most, governing through culture puts the opportunity to exceed expectations in the hands of those who can make the difference.

FREEDOM IS JUST ANOTHER WORD

When most people first think of self-governance in the abstract, it seems all well and good. But when they think about it concretely, fear creeps in. How can an organization function, they ask, when workers are free to do what they want?

But what is freedom? Some people think that freedom is an absence of constraint. “If I could just do exactly what I want,” they think, “I could really get something done.” Danish philosopher Soren Kierkegaard had a different thought: “Anxiety is the dizziness of freedom,” he said.9

Researchers at the University of Erfurt in Germany set up an investment game to discover exactly what freedom means to people—in dollars and cents. They recruited 84 players and gave them 20 tokens each. To make it interesting, and to ensure a real profit motive, they told the players they could redeem their tokens for real money at the end of the game. In each of a number of rounds, players could choose whether to invest some or none of their tokens in a fund. The fund had