The manager as a partner
If the manager is also a shareholder, his status as co-proprietor of the company may generate a degree of pride and sense of ownership that would have been unnimaginable in the past
Another question, this time referring to the family organization. What does a couple try to do when the figures on the expense and income sides of the family budget do not match? In the short term, and only exceptionally, they can borrow. But if our family is serious-minded and abides by its principles, the financial leverage technique is unlikely to become a long-term mechanism. Huge standing deficits and financial holes are privileges that are only within the reach of the State, public enterprises and certain large private corporations whose sheer mass enables them, with veiled threats concerning the social impact of their crises, to claim aid that is invariably denied to the small and modest.
So, having ruled out the possibility of living on borr-owed money, the family in my example will seek to increase revenues. &laqno;When will you get paid for your last assignment? Do you have any other offers in the pipeline? How much money will they bring?" she would ask him. And he would ask her, assuming that both work. &laqno;And what about you, how much will they raise your salary? Only by the cost of living index? And what about the bonus they promised you?" If the answers to these questions fail to bring any hope, our dear couple does not despair, there still remains one last recourse. They will examine the family budget item by item in search of superfluous expenses. &laqno;Let's see, we're paying a lot of money to be members of a social club that we never go to. Cross it out. Do we need two cars and a motorbike when the children are young and we're living in a city center? So sell the bike or the small car, keep the family car. Couldn't we arrange our summer vacation differently? The last one cost us an arm and a leg! And so our couple continues, shedding un-necessary loads, plugging the leaks in the family economy, without affecting the fundamentals of their lifestyle healthy food, sound education, respectable home, etc. And in the end, with adding and sub-stracting, writing in and crossing out, lo and behold, it works! The accounts balance. There even appears a small surplus on the horizon of our troubled but ever so likable and more united than ever couple.
What is the principle underlying these two examples? With these examples, I have sought to illustrate the sense of ownership, generously and splendidly disseminated throughout the social fabric. I seek to defend private ownership, hampered by some in their short-sighted egotism and lack of solidarity, attacked by others in their utopian, unrealistic collectivism. For humans to coexist in society, we must nurture and protect that which is routine, personal and immediate; that is where man's basic realities nest. It is man's misfortune that he wanders and founders with frightening ease in that which is abstract, potential and ethereal.
Private ownership must be encouraged, not just for reasons of justice (on which there is a social debt still pending, as the authoritative voice of John Paul II continually reminds us) but also for reasons of pure common sense. What did Germany do after World War II? What task did its leaders set themselves as the best antidote to the madness and tragedy of the first half of the century? To build and consolidate a society of small-scale private owners with the capacity to control their own destiny. &laqno;The regimes that combat both freedom and private ownership, either because they advocate the abolition of private ownership or because they seek to restrict it to the point that it is unable to sustain freedom, bear witness in their own particular way to the existence of a necessary connection between these two terms."(1)
The delicate scalpel of a morally and intellectually unchallenged author like Maritain confirms for us that private ownership and liberty incontestably go hand in hand. Enabling large sectors of the population to gain access to private ownership has considerable strategic importance. Private ownership usually does not travel alone. Private owner-ship encourages responsibility and frugality a far cry from the recklessness and extravagance with which some people handle public funds, and the sense of responsibility: &laqno;this is ours and we must administer it wisely». Ultimately, it encourages and protects the value of individual freedom and initiative. Freedom grows and tempers in the committed first person singular. It dies and atrophies in the depersonalizing abstract (humanity, the system, the world...) or in the expedient, overused plural which dilutes responsibilities that should be personal. If the exercise of freedom and responsibility can bring into being the solidarity that induces me to include my fellow person's reality in my mental and spiritual map I cannot keep my eyes turned away for ever from so much poverty and misery we will have created the foundations for a strong society that believes in its own future.
Well, drawing from the above examples and reflections, these are precisely this article's basic postulates regarding the modern manager. The modern company is at a historic crossroads. After discrediting a totalitarian system that has consistently denied human beings their freedom and dignity, we must rethink what kind of company, as a social and economic institution, we want to have for the 21st Century. A substantial part of the debate on the nature and philosophy of the company, without losing sight of the necessary balance with other stakeholders shareholders, customers, suppliers, the community revolves around the place we want to give the professionals who commit their talent, effort and time.
Do we want the company's so-called human capital to sit in the heart of the organization, to set up shop in the warmest parts of the corporate estate? Or would we rather that it camp outside, numb with cold, needy, destitute and, hence, always available and submissive?
Limiting my analysis to the organization's executive structure, will the company's relationship with its managers and their relationship with it be bare-facedly mercantile, selfish, and limited to the task in hand (trust needs several ingredients and time is one of them) or will it be governed by mutual commitment and honesty? Will the company confer upon the modern manager his natural rank of partner, with the rights that naturally arise from such a condition, to be able to then demand that he also fulfil his obligations? Will it give him the resources and freedom that are part and parcel of his function, so that he can then be held answerable for his contribution to the results? Or will it be a cold, purely instrumental and mistrustful relationship? I am sure the reader will see where my questions are heading. What does the status of associate imply, that is so different from the irritating and suspicious expression "human resources"? What does it mean, to borrow the fortunate expression of Charles Handy(2), "to be a citizen and not a mercenary" of that economic community of people we call the company?
First and foremost, it means being able to take part in the decisions that will affect the organization's development and will have a decisive influence on one's own career. "The active, personal involvement of professionals in the government of organizations commits them and forces them to accept responsibility for the consequences of their decisions. If his management is successful, the manager should have a share in the profits, together with the other stakeholders. If error and inexperience predominate, and with that, the numbers slip into the red, the manager must be prepared to learn to correct his course and put them back in the black. In the meantime, the manager will have to live within the limits imposed by the numbers, like any other hard-up family. How I wish that many lived above their means! What they are doing is living above their realities!"(3).
Finally, in line with their partnership status, if the manager is also a shareholder, improving and refining the levels of management control precisely thanks to his access to the bodies on which the Institution's sovereignty rests, his status as co-proprietor of the company may generate a degree of pride and sense of ownership that would have been unthinkable in the past.
The strength and potential of the idea we have briefly sketched here was hinted at some time ago by Cooper Procter, the founder president of the world-famous Procter & Gamble. &laqno;The main problem facing the modern employer is to devise a policy that enables each employee to feel that he is a vital and empowered part of the success of the company he works for and that he is entitled to share in the benefits of this success» (4). Tom Peters, drawing from a phrase by Gordon Forward, Chaparral Steel's President, synthesizes the message's essence: "We want them to act as if they were the owners". One could ask what is meant by "as if they were the owners". Are they or are they not? Are we dealing with a subtle exercise of simulating an involvement that is more psychological than real? Can this nuance be sustained in the medium and long term without overstraining the ties of identification and unity?
These questions have been clarified in companies such as Hewlett Packard, John Lewis, Levi Strauss, Procter & Gamble, Herman-Miller, Semco, Johnson & Johnson, and closer to home Grupo Mondragón, Grupo BBV ... companies where the idea of associate has taken root and sprouted.
Some of them, Herman Miller, for example, acknowledge it specifically in their mission statement: "We believe that the concept of ownership is consubstantial with participation" (5).
The corporate experiment initiated by Albert Koopman in the delicate enclave of his native South Africa, which he himself relates in this book Transcultural Management (6), follows the same lines. Koopman has put into practice in his distribution company, Cashbuild, the idea of an organization whose employees are also its partners. Another advocate of the management professional-cum-partner is Michael Poole. In his book The Impact of Economic Democracy (7) he weighs the benefits that can be expected from the dual employee-shareholder figure, much more open to assimilating corporate profit and return criteria than the more traditional employed professional who tends to demand prerogatives as a matter of course.
Without fear of overstating the argument, one can deduce that business excellence has certain common features (sensitivity to the milieu, financial conservativism, tolerance, original, creative thought, a strong sense of identity, clear information...), among others, the involvement of its professionals in the management and economy of the organizations they work for.
How different such behaviors and attitudes are from those that one can see in certain executive lounges! Is it inevitable that a manager's career should evolve without reference to his real contribution to the organization where he works? Is it sustainable that salary increases, promotions, cars, credit cards, and such other paraphernalia of power and status should come mysteriously to executives who are eternally at odds with professionalism and a job well done? Do million-dollar fixed salaries really form part of a motivating salary structure in companies that are teetering dangerously on the brink of bankruptcy? Is it not a policy such as that which I have advocated a higher variable component in a performance-linked remuneration, risk-taking, flexibility and responsiveness to crises totally incompatible with the armor-plating behind which some shield themselves? "Your risk, my security" would be their unconfessable slogan. Are we not seeing appear among us and worryingly so a profile of a nomad, rootless, solitary manager who seeks only the short term, who does not see beyond his own interests and ambitions, perhaps caught up in his own fears and incompetence? Perhaps they are the minority but they're there.
Please do not misunderstand me. I am not asking the manager for a degree of lifelong loyalty and commitment that really belongs to other spheres of life. We marry our spouses, not the organizations where we are tearing our existence to shreds. Because that is something else that must be said, now that some organizations have confused corporate culture with a stifling brainwashing that seeks to turn their executives into an interminable series of clones and fanatics. In life, one must know when the time has come to conclude certain projects and start others.
In the course of a fruitful career, sometimes we must make haste to conclude a chapter that is dragging on too long; or even close the book, learn from it and write another one on a completely different subject. Variety is the spice of life, so long as the different stages are fully explored, experienced and digested. We should not turn over the pages without finding out what they are telling us.
During the time one is in an organization, one must plunge in, live the present as if it was going to last for ever; life will send its messages and hints to tell us whether it is time to change and evolve. And while we wait for the new winds that we must learn to read and interpret, it would be to everyone's advantage if the company-manager relationship were to be distinguished by a reciprocal loyalty and professionalism that can and must be asked of faithful partners. If these values cannot withstand the test, we will all suffer. If they come out strengthened from the trial, a grateful society will pay back the favor many times over.
1· Maritain, J., &laqno;Para una filosofía de la persona humana», Club de Lectores, Buenos Aires, 1984.
2· Handy, C., "The hungry spirit", Broadway Books, New York, 1998.
3· Álvarez de Mon, S., "La empresa del siglo XXI: ¿Darwinismo corporativo o comunidad de personas?", Harvard Deusto Business Review, Bilbao, April, 1998.
4 Peters, T., "Thriving on chaos", Hardcover, Los Angeles, 1987.
5 Murphy, P., "Eighty exemplary ethics statements", University of Notre Dame Press, Indiana, 1998.
6· Koopman, A., "Transcultural Management", Basil Blackwell, Cambridge, 1991.
7 Poole, M., "The impact of economic democracy", Routledge, London, 1990.
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