A Human Community

One day when I was working at Cummins, word arrived that the mother of one of our colleagues on the president's staff had died, the victim of a hit-and-run driver. The funeral was several days later, in a town hundreds of miles away from our headquarters in Columbus, Indiana, and it conflicted with an important meeting. Of course we extended our condolences. But, in addition, Jim Henderson, the president, said that he would be going to the funeral and invited those of us who wished to attend. I did. It was a sad experience, but it felt good to provide in-person support to our colleague and his family.

There was some quiet contention among the staff about the wisdom of Jim's decision to take the time to attend the funeral in light of the difficult business conditions we were facing and the meeting that was displaced. I spoke about this with Irwin Miller, Cummins' founding father. I'll never forget what Irwin said: "The company is a family, and we put family things first—always." I realized at that moment that Jim Henderson was president of Cummins in part because it was normal and natural for him, and much in line with Irwin's philosophy, to put a family matter first when it arose.

Irwin's view of the company as family was an exceptionally strong version of the idea that a company is a human community. Perhaps it doesn't have currency in much of corporate America today. Lest you dismiss it too quickly, though, let me note that Irwin's assertion was not the first time I'd encountered the idea of company as family. I heard the concept from a great teacher I had at the Harvard Business School, Dr. Harry Levinson. Harry was a rare thing: a psychoanalytically trained psychologist teaching in a business school. Harry taught us that a lot of behavior in companies is best understood by the simple fact that in important ways, organizational structure replicates family structure.

Trouble with the boss? Unresolved conflict with parents. Can't get along with coworkers? Sibling rivalry. Denial of obvious reality? Psychological defense. Bottomless need for approval? Maybe Mom and Dad didn't do their parenting jobs well, or maybe you didn't do your job of growing up.

Are these valid explanations? I don't know; I'm not a psychologist. But I was a leader in large organizations for a long time and I observed that the family metaphor for organizational life has merit. Habits of mind and heart developed in the home certainly play out in the workplace.

I continue today to see the leaders of some companies—especially private, family-owned companies—treat employees as an extension of their own families. This is the case at Gordon Food Service. And employees reciprocate. When Paul Gordon became ill and died several years ago at the age of eighty-five, there was an outpouring of support and affection that had the unmistakable feeling of love for the great father of a very large family.

Why should directors remember that companies are human communities, even families?

First, when the board appoints a CEO, it also appoints the leader of the community and head of the family. Yes, he or she is the senior executive of an economic enterprise and will be judged on financial results. But day-to-day, the leader also needs to tend the community. That means participating in rituals and ceremonies, celebrating and grieving, and recognizing and supporting people.

Second, directors must be attuned to actions or policies that will affect the community—positively or negatively. In the first session of my undergraduate class, I assign a case study on Burt's Bees, a health and beauty aids company that emphasizes natural ingredients. The CEO at the time of the case initiates an aggressive program to reduce waste (the amount of stuff that ends up in a landfill) at Burt's Bees. This is obviously smart business because waste is cost. But the students also note how engaged Burt's Bees's employees are in the initiative. They're proud as a community that the company is being environmentally responsible because this is a value most members share. By contrast, I recall how upset people at Kraft (food) were when Philip Morris (tobacco) acquired the company in 1988. I knew Kraft employees who felt it was a violation of their values to be affiliated with the tobacco industry. Financial considerations drove the deal, of course, and today, after a variety of acquisitions and mergers, Kraft is unrelated to the tobacco business.

A third reason directors should recognize the community nature of a company is that doing so can strengthen bonds between employees and the company and save the shareholders money. If a company is seen only through an economic lens, then incentives are all about money. But employees, including executives, are human. Chris Argyris, a Yale professor, helped popularize the term psychological contract to describe important dimensions of the relationship between a company and its employees. The psychological contract includes mutual commitments and expectations, some of which are non-economic, such as being part of a company in which you can take pride; being treated fairly; having opportunities to learn, grow and develop; and having your achievements recognized. These are powerful things with people, yet most of them cost little or nothing.

To illustrate, I've had a lifelong affection for Cummins even though I only worked there for six years. As I was finishing my MBA, I interviewed with the company despite being close to deciding to continue my education in a PhD program. The interview went well. I told Ted Marson, the vice president for personnel, that I really liked Cummins but thought I wanted to be a professor and so was considering doing a PhD. I subsequently received an offer to join the company. I was torn. A few days later, Ted called and said something extraordinary: "Joe, we'd love to have you join Cummins. But I think faculty work is your calling. So do the PhD. Cummins will be around, and this won't be our last encounter."

I couldn't believe that the representative of a big company whose job was recruiting would put my interest first.

Ted turned out to be right on all counts. Faculty work was my calling. The PhD was the right path, and Cummins turned out to be part of my life for a long time: as a site for my dissertation research, as a consulting and executive education client, and ultimately as my employer for six eventful years where, for a while, Ted was my boss. More than thirty years after leaving Cummins' employment, I still feel loyal and bonded to the company!