Know Thyself! In Workplace and Community

January 1 st 1995

At first, this essay was titled "In Praise of the Particular," but such a title would have been too abstract, and it would have had no obvious connection with the principal field of interest of this journal—the world of business, employment, and community. In 1995, more than ever before, the success of a business enterprise as a producer of goods or services and employer of people, will depend on the relative uniqueness of both the organization and what it has to offer. When goods and services become "common" they assume the character of commodities, and then the only basis on which a business producing those commodities can compete, is on quantity and price. Such conditions favour the very large companies and even for them profitmaking becomes a struggle. There is very little that is distinctive about price and that cannot be emulated by another competitor.

By contrast, products and services can be distinctive in many ways. The trouble is that modern communications and techniques also make it easy for competitors to copy and reproduce the unique outputs of others, and to do so in short order. For example, predator businesses located in China are flooding markets with video recordings of Western films even before the originators and distributors of those films have got around to producing video versions themselves. It seems that in the longer run, the distinctiveness of the organizations behind those products and services is more important than the (temporary) uniqueness of their offerings. Sometimes this quality is called a "distinctive competence" or a "core competence" but even that notion usually refers to ways of doing things rather than to the more important possession of a distinct organizational character or identity.

Boundaries

In 1995, however, and more than ever before, the ideological environment remains hostile to the essentially Christian notion of the inherent, creaturely uniqueness of persons. That antipathy, in turn, also militates against the idea that particular institutions, organizations, or communities may possess a uniqueness bordering on autonomy. Uniqueness implies the existence of an essential differentiation in character—an inherent character.

Yet, in the domain of public policy and politics, for example, very few among our opinion leaders can subscribe to, let alone understand, the importance of boundaries in the created world order. That government, the church, the school, the family, can each have a sovereign sphere of influence and operation, is a foreign notion. Instead, everything is being politicized, and thus reduced to a single dimension, reminiscent (in an organizational setting) of "one-dimensional man." Few economists will concede, let alone grasp, that the very idea of international trade depends on the preservation of borders and inequalities. An outstanding chief executive of the Deutsche Bank was among the few who recognized this truth (and expressed it, shortly before his assassination by the Bader Meinhof gang).

At the most general level, the fashionably new watchword is globalization. In a globalizing postmodernist world everything is said to be connected with everything else. Networks and networking sustain economic and social life.

Reality itself is a social construct. In such a world there is scant recognition that persons do, and particular organizations may, have an inherent, and indeed antecedent, identity and validity. Instead, personality and identity are derivative. We exist by dint of our relationships. Everyone and everything is a creature, or exists by the grace, of one system or another. In other words, it is the environment that prevails. If there is identity, so derived, it is functional. It has to have a use. It has no value in its own right.

A fundamental distinction

Here we come up against a perpetual, but fundamental, conflict between two very different views of the world. At the macroscopic, mostly general, level, the difference is clearly ideological—giving rise to what C.S. Lewis would call "a great divide." Not so clear are the applications of the same great divide at the microscopic end of human affairs, such as in the world of business and employment, and specifically at the level of the firm.

Field Marshall Jan Christian Smuts, the great South African statesman, philosopher, soldier, lawyer, and botanist, was also the first exponent of the idea of holism. Holism is a description of the interconnectedness and oneness of all things. Smuts's interest had first been triggered by Charles Darwin's theory of evolution, which claimed that new species evolved through a competitive process of natural selection. But Smuts struggled with the conundrum that for a process of natural selection to have operated, there had to have been variety in the first place. This question, the question of the real origin of varieties, Darwin had been unable to resolve, and indeed he had ducked it. In other words, as Smuts remonstrated, entities with unique identities could not have been derived from process—at least not initially.

These are not just philosophical issues. The same debate marks the world of business and employment in 1995. In this regard no better illustration can be found than a recent feature article in the American business magazine Fortune, titled "Why Companies Fail." "By 1992," said Fortune, American business failures "had nearly doubled, to some 97,000." And the biggest contributing reason for these failures, according to Fortune, had been an "identity crisis." The failing businesses had lacked "an essential understanding of what the enterprise is all about." They did not know who they were. They did not know themselves.

A related problem was that such companies could not "offer employees a sense of long-term stability." In other words, those companies were not destroyed by external conditions. The source of their malaise was internal, and its nature was not merely incompetence.

A similar analysis came from the Financial Times of London, England, when it looked at the reasons for the early demise of new corporate ventures. It offered a reminder that statistical studies of such failures "ignore the unique character of every company and every venture." Specifically, the Financial Times denied the effectiveness of socalled "cultural transplants" as a way of making businesses successful (copying someone else's identity). "Instead," it concluded, "they should develop their own unique brand of entrepeneurship by learning from their own past experience with innovation projects—failures as well as successes."

Identity and history

If it is so important that firms learn from their own experience it implies that unique entities are also conscious of and have a clear sense of their own history. That is the reason so many successful enterprises are so mindful of the character, values, and vision of the original founder of the organization. In other words, "first things" are first in two senses—first in priority, but also first in time.

A 1988 study of Cities in a Global Society found the same principle at work in the economic and industrial success of particular urban communities. Apparently, "industrial metropolises that formed around historic cities have an advantage over newly established metropolises because their civic identity was established prior to industrial development....Metropolises with historic core cities such as Milan, Strasbourg, Munich, Florence, and Basel have greater resilience and are becoming stronger while the inner cities of newer industrial metropolises are collapsing." Those communities had gone through a process in which they had established their own unique identities.

In his monumental Competitive Advantage of Nations, Professor Michael Porter of Harvard University sees similar conditions behind the economic viability of particular regions and countries. "In truth," he says, "national differences are at the heart of competitive success." According to Porter, a more open world trading environment "will arguably make national character more decisive." He too makes the point that "every industry is unique and has its own unique structure." Porter argues, over and over, that in the achievement of commercial success, specialized factors (socalled) are far more important than generalized factors, and that those specialized factors are also, and typically, highly local in character. (Porter's authority is demonstrated by the fact that the Canadian government and a Canadian business association have paid him one million dollars to advise on Canadian industrial policy, but it remains to be seen whether, or to what extent, his considered advice has been appreciated, so far from being implemented.)

Local factors, uniqueness, and long-term commercial success seem to be closely linked. For example, it is well-known that most of the really productive venture capital is raised locally. In the industrially vibrant region of Minneapolis-St.Paul, only nine per cent of the high technology establishments are owned by "out of state" firms. Likewise, very little of the economic rejuvenation of the region of Philadelphia is attributed to the attraction of branch plants from other regions or countries. In the matter of procuring technology from others, Michael Porter warns that the foreign sourcing of technology usually puts a company a generation behind its competition. All of these findings seem to bear out the more general claims by authorities like Chandler (the author of a famous book on corporate strategy and structure) that successful multinational enterprises are driven by internal skills and managerial capabilities; and the economist Schumpeter, who held that durable economic development was always driven "from within."

Conclusion

In its origin, "know thyself" was a biblical injunction. It would seem that a clear sense of identity not only distinguishes persons, but that it can also mark the difference between success and failure in the lives of organizations and communities.

 

Dirk de Vos

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