'We ought to be more like the Japanese.'
'Ah, but they're not doing so well at the moment.'
There are only two useful forms of international business comparison. One is at the level of transferable practices - Honda teaching Rover about supplier relationships, for example. The other helps us to see ourselves differently by understanding the things that we find strange and that others take for granted. It may not be applicable this morning, but it opens our minds to new ways of approaching business issues.
It is this second benefit that is on offer in The Seven Cultures of Capitalism. The book is like a Brueghel painting - a big scene from afar and intriguing detail close up.
First the big scene. Economics, by which the English-speaking world sets so much store, has been 'an academic discipline, describing the creation of wealth after such creation has been accomplished by persons not employing the discipline . . . Economics is so concerned with counting and itemising that it has lost sight of the one component, almost unmeasurable, that makes all economic activity possible: human relationships. Behind every economic transaction are people making choices, acting on their values, giving one thing high priority, another one low.'
Now for the detail. In constructing their World Cup of business cultures, the authors conducted surveys with managers in Britain, France, the US, Japan, Germany, Sweden and the Netherlands. (As in the 1994 World Cup, there seems to be a preponderance of European sides in the contest.) The method is unusual. The authors identify seven fundamental 'valuing processes' by which wealth-creating organisations make judgements. These include 'Making rules and discovering exceptions', 'Managing communities of individuals', 'Internalising the Outside World' and 'Synchronising fast processes'.
They then create a penalty shoot-out of dilemmas, and ask survey recipients how they would deal with them. If you were sharing a beer at work with a friend who was on duty and had safety responsibilities and an accident occurred, how would you give evidence to the investigating safety commission? Would you tell them what happened, or side with your friend?
Japanese managers were most upset by the dilemma, and returned the verdict: 'Both alternatives are wrong.' Their answer was to promise the friend loyalty but to plead with him, as a friend, to tell the truth. The sense of intimacy and trust between individuals is the moral cement of society - the wider social value of safety cannot be upheld in a way that undermines this individual trust.
One of the most revealing insights is about attitudes to time. The managers were asked to think of the past, the present and the future as being in the shape of circles. The results show UK managers taking a 'sequential view', drawing three separate circles with a slight intersection of the past and the present, while US managers see the past as unconnected with the present and the present just touching the future. By contrast, the Japanese took a 'synchronous' view, seeing past, present and future as largely overlapping circles.
But this is not an East/West divide. Both German and French managers saw some overlap between past, present, and future.
Instead of asking, 'Why can't we be like Japan?' - to which the simple answer is, 'because we're not Japanese' - this prompts us to think about competitive handicap that may be inherent in our norms. Concepts such as 'time is money' or 'net present value' are not universal truths.
In a recent lecture at the RSA, Lester Thurow said that if as parents we applied the concept of net present value, we would never bother to educate our children because the returns are so distant. This book has helped me and, indeed, the Tomorrow's Company inquiry to re-examine the usefulness of our own mindsets.
Phrases like 'the bottom line' 'net present value', 'my shareholders demand' and 'fiduciary duty' are flourished in business life with all the authority of the referee's final whistle. Hampden-Turner and Trompenaars help us to see that, judged globally, our cherished yardsticks may have no more importance than whistles from the crowd.
Each of us has to decide for ourselves which whistles matter.
The author is programme director of the RSA and of its business-led inquiry, 'Tomorrow's Company'.Reuse content