Thus far, we have argued that different forms of organizational culture are appropriate to different business environments. We have also described how you can analyze where your team, division, or whole organization is, in terms of the Double S Cube, and suggest ways in which you can change culture if the environment calls for it.
But there must be more. We are not merely passive victims of the business environments in which we work. Work is too important for that; it is too much of our lives. As Studs Terkel memorably puts it in his book Working , "Work is about daily meaning as well as daily bread; for recognition as well as cash, in short, for a sort of life rather than a Monday-through-Friday sort of dying. . .. We have a right to ask of work that it include meaning, recognition, astonishment and life." 1
Choices about work, about how you work and where you work, are not just about money, career, security—they are about how you want to live your life. They are ultimately about the central themes of ethics: truth, goodness, and beauty.
In this chapter, we want to explore the ethical questions you face within the culture in which you find yourself and the personal dilemmas you must confront whether you hold it constant
or try to change it. For pulling the levers of sociability and solidarity are not just mechanical tasks; they are centrally concerned with the values you place on self-knowledge, human relationships, and the place of work in your life. 2
For example, if you face the choice of moving from an organization with a positively fragmented culture to one that is networked, it must help to know how comfortable you are, in your heart and mind, to sacrifice personal freedom. You must also ask yourself—and answer—questions of how comfortable you are partaking in open-ended relationships with others and revealing more about yourself at work.
As for your values around human relationships, imagine the implications of moving your organization from a networked to a mercenary culture. How do you feel about firing friends and taking actions that could reduce personal loyalty, as you allow the market to dictate who stays and goes? How do you feel about creating a workplace that is less fun for you and others? Don't forget that every time you unravel the complex ties of sociability you risk spiraling into the fragmented culture, whether you want to or not.
PERSONAL CHOICES, PERSONAL QUESTIONS
The place of work in your life surfaces as an issue in every quadrant of the Double S Cube. Even moving into the communal quadrant with its apparent attraction of high sociability and high solidarity involves personal choices. If, for example, you move from fragmented or mercenary to this culture, you are implicitly committing to give more of your "private" life to work. From the networked, you are tacitly agreeing to make work more important than your friendships as the organization becomes all-encompassing.
What we would like to do now is put to you five overarching ethical questions surfaced by our framework for culture. You
may not have answers to all of them—you may not immediately have answers to any of them—for answering ethical questions is not a destination but a journey
Anyone who manages other people has the opportunity, and even the responsibility, to make decisions that will inflict personal discomfort or even suffering for the sake of the collective good. We talked in the chapter on networked organizations about that form's tolerance for poor performance. Managers often allow the organization to "carry" weak members rather than fire them. In the long run, however, the result of this dynamic is often damaging to the collective good. Organizational performance may soften, hurting shareholders of course, but ultimately it might affect good employees who have to be laid off to reduce costs. In other cases, the strong performers doing the bulk of "carrying" burn out. They feel tired; they feel used. Some of them leave to work for organizations where they will be more valued. The poor performer has been spared the rod, but the organization has paid the price.
How do you, as an individual, feel about this scenario? Your answer says something about what you are prepared to do for the organization's sake. If you read it and said, "I get it—I'd rather cover for a friend than fire one; the organization will survive," that suggests you are not prepared to sacrifice individuals for a group. If the scenario made your blood boil and you thought, "Sometimes people just need to be fired, they will survive," that suggests you have a far higher comfort level with putting the collective good first. This is not to say one response is better than the other, only to highlight that there is a wide range of what people are willing, eager, and able to do for their organizations. Part of confronting the ethical issues raised by culture is determining where you yourself fall in that range.
Together with trying to understand what you are willing to do
for the organization is what you are willing to give up in its name. In his book The Great Good Place , Ray Oldenburg argues that a healthy and balanced social identity relies on three factors—work, family, and a "third place." 3 This place, such as a church, a local bar or restaurant, a garden club, or a charity where you regularly volunteer, is a neutral ground where rank is forgotten. It offers conversation among friends as the main form of entertainment, fosters playful exchange, and provides novelty, a fresh perspective on life, a spiritual tonic, and friends by the set (that is, not by the individual—the group is open and inclusive).
If you are prepared to do a great amount of work for work— log long hours, go in on weekends, think about it when you're not there—then you inevitably give up something of your third place. This is what happens to people in communal organizations. They continue to have social lives outside the office, they just happen to do most of their socializing with people from the office. The territory is not neutral, rank is not forgotten, and new or fresh perspectives on life are not being passed around in playful exchange. The same dynamic also happens to people in networked organizations, but naturally much less to those in the mercenary and fragmented. No one alternative of how much you preserve your third place is right or wrong by definition, but they are choices. And underlying that choice is "What do you value?" The answer is an ethical, even moral, decision.
How do you define the term stakeholder? A fierce debate has been launched in recent years over which groups should be considered an organization's stakeholders: Are they the shareholders, employees, customers, the community, or some or all of them, and in what order of importance? 4
Each of the cultures in the Double S Cube answers these questions differently due to their different values and underlying assumptions. In the networked, employees are the primary stake-
holders, as the key implicit values are the survival and maintenance of social relationships. In the mercenary, stakeholders are first and foremost the shareholders, as the organization strongly values bottom-line results. For this reason, however, the mercenary culture also defines stakeholders as employees who can make a difference—its top performers. This assumption, in fact, is the whole idea behind the stock options used so frequently as a reward in mercenary companies. The options turn strong performers into shareholders—into owners. People within the fragmented organization, not surprisingly, believe the stakeholders are the individuals who comprise it. Those individuals are, after all, what the organization is in business for. And finally, in the communal, the stakeholder becomes the world. With its high levels of sociability and solidarity, these cultures see their mission as helping (even saving) humankind. Think of the old Apple, with its embedded value of "extending human freedom," or of Glaxo- Wellcome's mission to "eradicate illness." These missions are not to satisfy or benefit mere shareholders, employees, customers, or local communities. They are for everyone, everywhere.
If each culture has a definition of stakeholder embedded in it, the question for the individual becomes, "What do I believe?" This question is especially relevant when picking an organization in which to work and deciding whether to stay in it when other opportunities arise. It is also particularly meaningful when you, as a business leader, are thinking about adjusting or changing your organization's culture. The move may make sense for competitive reasons, but do you endorse what the change will mean as to how stakeholders are defined?
Again, there is no clear-cut answer to the stakeholder question, only opinions, really. A woman who attended Flarvard Business School tells a story from her first-year finance class. One case study presented the matter of a struggling manufacturing company that had two choices: to close a plant or stop paying dividends to its shareholders. A student who had worked in the advertising industry for several years raised her hand and pas-
sionately advocated for keeping the plant open and saving the jobs of its workers. She used the stakeholders argument: "These workers have given their lives to the company," she said. "The company can't just fire them all. That would be wrong." The professor nearly exploded with exasperation. "The stakeholders are the shareholders!" he cried. "The owners come first!" Around the room, as many heads were shaking as nodding, and in the hour that followed, there were perhaps as many opinions about the meaning of the word stakeholder as there were students. The point is: how you define stakeholder is a personal matter, drawing on your own economic model of the world, your experiences, and perhaps most profoundly, your values.
How close do you want to get to people? At first reading, this may seem like a question about how many friends you want to have. It is not. Rather, it is a question about your comfort with personal risk-taking, with your preparedness to reveal your weaknesses to others. For when it comes to the nature of social relations, there are really only two options available. If you withhold yourself from others, you are less likely to get hurt, but you also will be less likely to be loved. Nor will people reveal themselves to you. On the other hand, if you allow yourself to become close to others, you are much more likely to be hurt, but you are also more likely to be loved and hated. You are also more likely to understand others, as they reveal themselves back to you, and to have people understand you. Which path you take is again a choice . 5
The four cultures of the Double S Cube require more or less of people in terms of social distance and personal risk-taking. The networked allows its members to reveal their personal selves. Indeed, it encourages it, but if you don't, you are usually left alone. The group wants to know about you, but it won't probe— that would be unfriendly. Because of its low levels of sociability, the mercenary culture also does not require people to take the
personal risk of revealing themselves, nor does it particularly want them to. It is not necessary for people to understand each other's innermost needs, wants, and drives. All that matters is how well you do your work. And when you are done, you can go home. What you do there, by the way, does not matter to the mercenary culture—as long as it doesn't impact your performance. To contrast the concept of social distance in these two cultures, think back to Andy Collins. When he was at the networked EmChem, he assumed that underperformers had personal problems. He sought to understand those problems and to help the employee through them. At mercenary Tystar, Andy Collins fired two people in his first week without being allowed to ask why their work was subpar. The organization, with its low interest in social relations, didn't really want to know if personal matters were involved, nor did it care.
In the fragmented culture, social distance is the preferred mode of operation. The organization, after all, comprises people who have chosen not to take the risk of revealing themselves or have adjusted to the fact that the organization does not involve social closeness. Of course, there may be individuals who like each other in fragmented organizations and who open up to each other in intimate ways, but this would be an accident of the form. In general, the fragmented is low—very low—on personal risk-taking, for it does not value its outcomes.
Finally, it is the communal that demands the most personal risk-taking. Unlike the networked, where people choose to reveal themselves, in the communal it is required that members show themselves, warts and all. If you don't want to, other members of the organization will relentlessly pursue you to reveal your flaws and acknowledge them, so that your performance can be improved. This is, of course, a function of the form's high solidarity. You must give yourself to the organization—every part of you—because the organization is king and master.
Every person has different feelings about how much personal
risk they want to take within their organizations. Indeed, the conflict between this comfort level and what is required by the organization is sometimes why people are unhappy where they work, or even why they leave. A private person may feel, in a communal organization, that they are being asked to open their hearts up to strangers. Or someone in a fragmented organization may long for that kind of intimacy; they leave on account of loneliness. The ethical decision here involves understanding what you value in social relationships: getting hurt or getting love. This is, once more, a choice driven by your experiences, hopes, and beliefs—your philosophy of life.
What value do you place on justice? No one wants to admit they don't value justice, and in fact, most people do value justice. It's just that people define justice differently. Another way of putting this is that people have different perceptions of fairness . 6 And, as above, each culture in the Double S Cube distinguishes itself within this range of perceptions. In each one is embedded a distinct view of what behaviors and beliefs constitute equity.
In the networked, with its high levels of sociability, fairness is quite nearly synonymous with kindness. When an organization is being fair, people are not getting hurt; they're looked after. To return to the example of the poor performer: If he was fired in a networked organization, the response might well be: "But that's not fair!" What is really meant is: "But that's not kind!"
This definition of justice is a two-edged sword in terms of outcomes. On the one hand, looking after each other promotes trust and loyalty to the organization. On the other, looking after each other can lead to collusion—to cover-ups. Say a member of a networked organization discovers one of his colleagues is responsible for a plant that pollutes a river. He will inform the colleague of the problem and then cover for him until the problem is corrected. No one will have learned from the mistake, nor will
anyone have taken responsibility But no one—personally—was damaged in the process. That would have been unfair.
In organizations, perceptions of justice can be seen in high relief in compensation systems. How people are paid and why they are paid that way says a lot about how the organization defines fairness—that is, equitable treatment. Networked organizations often reward seniority and popularity, especially with the right people. It is only fair that Joe gets more money than Tom, he's been here twice as long, and plus, Joe always helps out. (Add to that, by the way, that he's the boss's tennis partner.) The pay differential between the two men may well be smaller because of Tom's superior performance, but not enough to close the gap.
Compare this to the compensation philosophy in a mercenary culture, where outcomes are rewarded. These organizations are meritocracies. That's their form of justice, and it's pretty stark. People are paid for hitting targets and meeting objectives. They are also paid according to their market value—how much would their skills be worth to a competitor? At the end of the day, salary doesn't depend on whether a person has worked at the organization for six months or twenty years. It's all in their results.
Interestingly, this code of justice is perhaps the most beneficial for women, minorities, and gay people—people who often pay the price economically for reasons out of their control, for reasons of discrimination. In a setting where all that matters is performance, people are paid for what they do, not how they look or live their lives. This is another form of justice from the networked indeed.
In the fragmented organization, justice is an individual matter. Just actions and decisions are those that promote your own interests. This is not selfishness necessarily—after all, in the positively fragmented form, an underlying assumption is that the collective good is a sum of individual goods. If your interests prevail, so too will the organization's.
How are people paid in the fragmented organization? According to their reputation within their peer group. A professor of mathematics may not have published a paper for years—and he may be a lousy classroom teacher too—but he may earn more than a professor who has published frequently and receives rave reviews from students. The reason: Fifteen years previous, the first professor invented the formula on which advanced calculus is based, or some such. His contributions to the field of mathematics are profound and long term, and the university "lucky" enough to employ him basks in his reflected glory. That glory allows it to recruit other promising scholars and garner millions more in donations from alumni. And for that significant ripple- down effect, the professor is highly compensated. Who is to say this is not justice?
The communal too has its own definition of justice: adherence to the vision. The "HP Way" and the Johnson & Johnson credo are both codes of justice. Live by them, you're doing right. Deny them, you're not. This code of justice in communal organizations very typically extends beyond the walls of the office: Members apply it to suppliers, customers, and the community. They should all follow its instructions for living—because it's the just thing to do.
It is no surprise, then, that communal organizations compensate people for how well they meet company objectives and how well they live the credo; they're intermingled. It's not just what you do, it's how you do it. Think of the consultant at Bain & Co. who was chastised for not being "at cause" with one of her clients. She had once made a derogatory comment about the client's intelligence and lost a portion of her bonus because of it. Her behavior had contradicted the precepts of the company's "legal" system.
Which form of justice makes sense to you? Would you feel most comfortable with that of the networked, where the hours you put in mean as much, if not more, than the measurable qual-
ity of your output? Does that sound fair to you? Or does the mercenary form resonate with your own moral philosophy: that equity is being judged for what you do, not who you are and whom you know? The fragmented culture's definition of justice may appeal to your own—that personal contributions can only be assessed over a lifetime of work and for how they impact the institution in many indirect ways. Or perhaps the communal fits with your own sense of what fairness means: everyone living according to a prescribed and explicit code of values.
The ethical choice here is not a matter of right or wrong but of alignment. Finding yourself in an organization that defines justice differently than you do is a recipe for conflict. And moving your organization toward a culture where people will struggle with new meanings of justice is something to consider deeply— and for which to prepare carefully.
How much are you willing to fit in? Everybody conforms to convention to some degree when they go to work—otherwise you would see people wearing their pajamas on the subway and hear them yawning during meetings. Society lays out for all of us norms and rules of behavior to which most people simply sigh and surrender. That's part of living in civilized communities.
The organizations to which we belong also place a layer of norms and rules upon us. They ask us to conform in different ways. They require us to leave, in varying degrees, parts of our authentic selves outside the office door.
Fitting in means something different in each of the cultures of the Double S Cube—different types of behavior are "allowed," different types of people considered "outliers." Thus the ethical question becomes: Do I fit within my culture, and if not, how much am I willing to compromise my true identity in order to reap the rewards of my company? These rewards, by the way, are not always financial. Sometimes they are personal—some-
one who loves and values social interaction may make herself "fit in" in a fragmented organization in order to win the freedom to work at home most of the time. Another person might so love and value social interaction that she would trade working at home for the fulfillment of a job in a networked culture, even one that requires a great deal of travel. In other words, the dilemma here is not how much you fit into your culture but how much you are willing to do so.
Even though it often proactively seeks to hire people with like sensibilities, the networked culture is remarkably tolerant of differences in how people look and act and in what they believe. The reason is the form's high sociability, which leads people to value individuals for their whole selves. Members of networked organizations care about their colleagues' families, hobbies, and personal histories. Inherent in that caring is a certain open- mindedness. If you start off assuming that your co-workers will be your friends, as is the case in networked organizations, then you are inclined to accept people who come from different countries and traditions and hold different perspectives on life. Indeed, these differences are even thought to enrich the group and make social interaction more interesting. This is why Unilever's off-site managerial retreat of Four Acres is so popular. British and Indians sit down for drinks with Dutch and Japanese, and they all walk away thinking, "What a lovely time we had together, learning about our different approaches to life and work—but mostly how alike we are underneath it all." Indeed, in many networked organizations, the tie that binds people is this propensity for open-mindedness.
It does happen, of course, that networked organizations do get to be, if you will, a collection of clones. Everyone has attended the same schools, lives in the same towns, sends their children to the same camps. They all begin to approach work the same way too. A groupthink develops. This is the underside of high sociability, and it occurs in the negative form of the culture.
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In this kind of situation, fitting in requires greater effort for people who don't "track" with the group. It requires greater personal sacrifice.
Who are the outliers in the networked organization—the "misfits"? They are the people who adamantly don't want to socialize—who don't attend company events, rituals, celebrations. It would be all right in the networked form to show up at these occasions and not throw yourself into them with zeal. But to not show up at all is another thing entirely. And for people who choose this route, few options exist. Their work may be good, but eventually the fact that they don't partake in the network will become an issue. These people are not fired—this is the networked culture, after all. But sometimes they are subtly forced out. They just don't feel welcome anymore.
In the mercenary organization, anyone who hits their targets fits in. At a large mercenary bank in Seattle, the most respected secretary is an openly gay man given to wearing bright pink shirts and tight, flowered bell-bottom pants. On the weekends, he performs as a female impersonator at a local club; this fact is well known. No one cares because, as his boss once said, "He gets everything done perfectly, and on time. The company runs more smoothly because of him, and because of that, we all perform better."
But the mercenary organization does have constraints that it puts upon its members. People are discouraged from talking about process, or worse, challenging it. This means there is a certain conformity enforced about procedure and rules. There is one way to run a meeting, for example, and only one. Pity the person who interrupts the meeting to question the way it is being done. Imagine if Andy Collins had done so at Tystar. You can be sure he would have never lasted long enough to make it to CEO. (Interestingly, that aspect of the mercenary culture never felt right to him, and it was adjusted as part of the cultural change process.) But Andy Collins conformed to it while he had
to—that is, until he ran the organization—because it was a worthwhile trade-off to him.
Thus, in the mercenary culture, misfits are people who find the means more important or interesting than the ends. For them, there are no options but to select to exit. If they don't, the organization will likely arrange it for them.
There can be no doubt: The fragmented culture is the one that most allows its members to bring every part of themselves to the office, whenever they choose to go. People can be as unconventional as they want—as long as their work continues to bring respect and success to the organization. And because so many fragmented organizations have their people working at home or otherwise off-site, it doesn't really matter at all how they look, what they wear, and when they work. No one knows the difference.
The only way not to fit in the fragmented culture is to challenge or break with the codes of practice of your profession. A pediatrician who advises a mother to let her baby "suffer through" an ear infection rather than treat it with antibiotics— and thus risk building an immunity to them—is operating enough outside the accepted protocols of medicine that other doctors might make their objections known. A lawyer who routinely compromises lawyer-client privilege would likely be censured by his peers and lose his license. A realtor who failed to tell a home buyer that his new center-entrance colonial had asbestos in the basement would feel the wrath of his peers in the industry—because such behavior would reflect badly on all of them.
But if you have high standards of practice, the fragmented form doesn't care if you do wear pajamas to work or yawn in meetings. It doesn't care if men wear skirts and women dye their hair pink. Oh, people may roll their eyes or comment snidely to one another, but no one is going to call for the nonconforming individuals to be fired.
Somewhat poignantly, the only real misfits in a fragmented culture are those who openly long for social interaction—who say things like, "Why don't we all have a party Saturday night? Won't that be fun!" They are greeted with disdain or, in better cases, bemusement. But they are not greeted with nodding heads. These outliers have two choices: to leave or to form a rogue cell of like minds. Indeed, fragmented organizations are often sprinkled with these small groups of highly social or even highly solidaristic individuals who cling together so that they can feel as if they too fit in.
The communal, in contrast to the fragmented, is the least accepting of individual differences and diversity. Paradoxically, people within these cultures often believe the opposite to be true—that the organization takes people as they are. Indeed it does, if you buy into the organization's goals and values. In that case, you are fully embraced. But people who disagree with the company's objectives or values are fully rejected, and sometimes even cast out. The communal culture is like a very orthodox religion when it comes to fitting in: Either you believe or you don't belong.
In its positive form, it should be noted, the communal organization does allow its objectives and values to be challenged, as long as the challenger is known to be strongly committed. He is challenging because he cares—he wants the organization to improve. It is not allowed, however, for a person—such as a new hire—to appear uncommitted and to challenge.
In its negative form, it should be noted, the communal doesn't even allow committed members to challenge objectives and values. And in either form, no one is allowed to break with the credo—that is, to live and work in a way that contradicts the company code. These individuals are outliers of the communal culture and they have no options. They must leave.
214 • THE CHARACTER OF A CORPORATION