How - Dov Seidman [131]
Next (and here is where it gets interesting), they established two different types of groups: those that permitted members to penalize other members and those that did not—in other words, groups that had a self-governing system and those in which participants were totally free to do as they liked. Players had to choose a group with which to invest, and after each round they could change groups if they wanted to.
Perhaps not surprisingly (given most people’s misperception of freedom as an absence of restraint), about 65 percent of the players initially chose a group that had no regulatory procedures. By the fifth round, however, things began to change; about half of them switched to self-governed groups. A smaller number migrated in the opposite direction. By round 20, nearly everyone had moved to self-governed communities. The “free” groups were empty. The greatest profits were to be had in groups with self-regulating cultures. Given a choice, it seems, groups without regulatory mechanisms attract exploitative people who tend to undermine cooperation. Early on, those who wanted a free ride to collect profit without risk gravitated toward the unregulated groups. Then people caught on; the threat of penalty by the group tended to draw people not afraid to cooperate. In these groups, more people invested and everyone earned more profit.
It turns out that people in pursuit of something, when given the choice between cultures where they are free to do as they please and cultures that have self-regulating mechanisms, choose those with self-governing principles. “[We found] that when you have people with shared standards, and some that have the moral courage to sanction others, informally,” said Bettina Rockenbach, the study’s senior author, to the New York Times, “then this kind of society manages very successfully.”11
Freedom does not mean anarchy. The freedom to self-govern actually binds people together around stated values and the desire to accomplish common goals. “A financial analyst once asked me if I was afraid of losing control of our organization,” wrote Herb Kelleher, executive chairman and former CEO of Southwest Airlines, a company whose workers thrive on autonomy. “I told him I’ve never had control and I never wanted it. If you create an environment where the people truly participate, you don’t need control. They know what needs to be done, and they do it. And the more that people will devote themselves to your cause on a voluntary basis, a willing basis, the fewer hierarchies and control mechanisms you need. We’re not looking for blind obedience. We’re looking for people who on their own initiative want to be doing what they’re doing because they consider it to be a worthy objective. I have always believed that the best leader is the best server. And if you’re a servant, by definition you’re not controlling.”12
The rationale for centralized, top-down decision making—control, direction, and compliance—melts away when individuals are tightly aligned with the company’s values and goals, accountable for their actions, and self-regulated. Because values-based governance is positive governance—given to what is desirable rather than what is prohibited— it presents a proactive solution to achieving corporate aims. As opposed to the heavy enforcement apparatus of blind obedience cultures or the reactive, make-another-rule solution of informed acquiescence, values-based self-governance provides constitutional principles that can be applied again and again to situations as they arise. It addresses the wide range of possible human conduct more comprehensively and puts the values of the company out in front of behavior.
TAKING CULTURE FOR A TEST-DRIVE
Joe Stallard is the vice president of human resources at Sewell Automotive Companies, which has become