An acquaintance in the compliance field sent me a copy of
Seidman's How and I let it sit around for months. (My "To
Read" stack has grown very tall.) I assumed How
was vanity book and would rattle on and on about Seidman's company: LRN. I
recently moved and my "To Read" stack was tumbled around in a plain cardboard
resurfaced in the stack and I noticed the forward was by President Bill
Clinton. That was enough to catch my eye.
Seidman spends the first half of the book talking about
transparency, trust, reputation, and the new inter-connected world. He does a
fine job with these topics, but I've seen them handled better elsewhere. The
second half of the book, which focuses more on Seidman's philosophy of
business, is when the book becomes more valuable.
Seidman highlights an empirical
study about reputation using eBay's seller reputation information. Chrysanthos
Dellarocas used eBay as an experiment. In a study selling the same product,
in the same way, through eBay sellers with different levels in the site's reputation
scores, the researchers found a measurable difference in price. A seller with a
high reputation on average would get a measurable price premium over a seller
who did not.
As you might expect, the book is full of stories as
examples. One that really caught my eye was the description of four factories
as examples of four types of corporate culture. The factories are to be toured
and the measuring stick is the use of hard hats. At the first factory, one of
lawlessness and anarchy, the factory tour guide does not offer hard hats to the
visitors and many workers are seen without hard hats. At the second factory, an
example of blind obedience, all workers wear hard hats and the tour guide says
everyone has to wear one or they get fired. The tour guide admits that he
doesn't know why he needs to wear it or why the boss also makes him wear blue
The third factory is the next step up the corporate
culture ladder as an example of informed acquiescence. Hard hats are there for
everyone with big signs saying everyone must wear one. But when one member of
the tour group asks to be excused from wearing one, the tour guide scampers off
trying to find a higher-up to approve the lack of a hard hat.
At the top of the corporate culture is the fourth
factory, an example of Seidman's self-governance. The tour guide insists that
everyone wears a hard hat and when that same member of the tour group asks to
be excused the tour guide says no. "I take personal responsibility for what
happens to you. I don't want to offend you, and you can call my boss or the
owner if you like, but I believe your safety and the safety of everyone are
The how of culture is broken into five parts: how
we know, how we behave, how we relate, how we recognize, and how we pursue.
One common theme in the book is an indictment of a
rules-based culture. Rules-makers "chase human ingenuity, which races along
generally complying with the rules while blithely creating new behaviors that
exist outside of them." The example that caught my eye was the clerk who
insisted on wearing ties with cartoon characters. His bosses fought him and
finally insisted that he obey the rules on permissible neckwear. The clerk
acquiesced and showed up the next day with Tasmanian Devil suspenders.
Ultimately, a rules-based governance focuses on the
things you can't do, while a values-based governance focuses on what is
This ends up with Seidman's Leadership Framework. I think
that is better left for more to readers of the book.
If this sounds interesting to you, I ended up with a
second copy of How.
Rather than have it sitting on my bookshelf, I want to share it with one of my
readers. If you are interested, leave a comment on this blog post or send an
email to email@example.com.
I'll pick a winner on February 1.
additional commentary on developments in compliance and ethics, visit Compliance Building,
a blog hosted by Doug Cornelius.
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