vendredi 1 février 2013

Work organization : France in logic of honor when USA in logic of contract

In the last post, I've discussed how the French Ancient Regime (period from the wake of last millenary to the French Revolution in 1789) is still shaping the way we're governed. I will pursue with those considerations on a more day-to-day illustration : the way French Ancient Regime society organization is still largely tainting today's french society and mostly work organization. It explains a lot of misunderstandings and failures when a US company manages a french subsidiary and vice-versa. This post is based upon a book that has been written in 1987 : sociologists have studied organization and behavior in 3 plants of the same industrial group (US, France, Netherlands). This was 25 years ago and mostly blue collars, but the lessons learned are curiously similar to what I've personally experienced when my company was taken over by a US company less than 5 years ago,  in a completely different sector (software manufacturer). 

Ancient Regime

France has lived for 6 or 7 centuries under what we're calling the "Ancient Regime". It was a very rigid "class system" with strong barriers to move from one class to another. You had the aristocracy (including kings and queens), not engaged in any business but fighting, forming alliances and marrying amongst themselves to keep power and estates. You had the nobility and gentry, some of them more a sub-aristocracy, some of them doing business which was considered something "dirty" and kept you under aristocracy (a real aristocrat could not make a living conducting business). You had a class of religious (monks, priests), and then you had a class of people that had access to a better class through heroic behavior in battles : cavalry was for example considered as a superior class. You had craft-makers and shop-owners with a perpetuation through master/apprentice relationship (and protection through syndication). And most people were poor farmers working for small gentry. They were not slaves but working on lands that were not their property. They were working for their lord.

Everybody was under a logic of 'honor'. Belonging to a class came with a list of rights and duties. Those lists evolved with time but the system kept on being the very same. When in a class, you cannot do something that is devoted to an inferior class (or stick your nose too much into the inferior class business), that would lead you to dishonor. This is still surviving : in France, a manager cannot dig too much into a team member's work without being considered as "breaking the rank". And the team member being too much controlled will find outrageous that his manager is going too much into his business devoted to 'its class'. Even the lower class was in this logic of honor. They were into domination but were very proud and jealous of their autonomy in some rights and were not in rebellion of the duties they found 'natural' to their rank. The whole society was working well provided everybody stayed 'in his rank', benefited from 'his rights' and ensured he properly respected his 'duties'. A lord had all powers over poor farmers but he was meant to use it with moderation according to his duties. If he did so, the farmers accepted the domination. If not, there was rebellion. Nevertheless, this domination was difficult to endure. That's why, in France, "working for someone" is still seen as a problem because it always refers to a master/servant relationship, not to a contractual relationship as it is in the USA.

French revolution and US model

The French Revolution which started in 1789 was meant to break all of this. The King was beheaded in 1793 and it's true that the whole system was shaken around. The whole "class system" was torn and the aristocracy barely exists today. But the class logic and the 'logic of honor' is still vivid. The classes are far more numerous come in many shades. But each group refers to a system of rights and duties, even if it's not consistent anymore with the current reality. Some strikes are starting just because the 'honor' of a group is endangered.French employees are ready to be utterly committed in their work but don't accept  that their manager is checking on their work too much. Some people say french people are lazy and don't care about their work. That's simply not true. The fact is, people are very disappointed by companies more than most other countries simply because they put too much expectation on work (polls show very clearly the over-commitment of french people in their job). Some also say french are unmanageable. That's more true because each group refers to its own code of honor rather than to orders. And we're still reluctant to management because of the memories of the master/servant relationship. Just like the defiance toward the riches could be interpreted as remains of the time where conducting a business was considered dirty (vs aristocracy).

At the other end, the US system is built on a very different basis. The burden of the past is way thinner. US can be seen as the aggregation of free men, meant to be peers, working together under a "logic of contract". The key word is "fairness". Of course, there are a lot of inequalities in US, much more than in France. But France refers since 1789 to "equality" when US refers to "fairness". It's more acceptable in US to "work for someone" because you're meant to have freely chosen and accepted the situation and it could be reversed one day. Hence the important figure of the "self-made-men". Therefore, the work organization relies much more on procedures (job description, management by objectives, performance review). Each level, from shareholders to blue collars, is giving objective performance expectations to the inferior level which can work, inside those orders, with a fairly good autonomy. And, unlike in France, it's not a dishonor for someone to be 'checked' : in France, it's seen as a lack of trust and defiant gesture. US can also rely on contracts because it's a lot supported by culture which is tainted by community and fairness values. This contract system does not work very well in France when people are still entrenched into honor.


Management and organization models, theories, books, seminar consultancy, it's a big business. Each country, each company, is trying to find best-of-breed models. Hence "copycat effects" and dramatic changes in model popularity. We have always been impressed in France by US economic power so we've always tried to import US management methods. This is still true even if it has a little bit faded away. We've had our "Japanese model" (community and inputs bottom-up) time and now the "German model" is in everybody's mouth (consensus). "Japanese model" was also very popular in the US when Japan automotive manufacturers began to gain huge market shares in the US in the 80s with a productivity that was way superior to the US.

We've been so involved in trying to copy US methods for 4 decades that some management methods very unnatural to the French have now become quite common and seems to have always been around. This is the case for job descriptions and management reviews (for white collars at least). It would seem very unprofessional in my line of business (IT service & software manufacturing) to hire an employee without a proper job description and to not have a yearly or biyearly performance review based on objectives measurements. Still, most of the time, it's just make-up, a travesty of what the reality is about.

I've myself written a bunch of job descriptions. Most of them were never respected (except maybe the core components) because the employee was going over or under its prescription. Most of the time, I did not expect myself employees to respect it and I was expecting them to act autonomously in the company's best interest. It's the same for performance reviews : I conducted a lot of them, having prepared metrics and formal reviews and finally found myself turn the review into an informal talk. That's a real advantage for small companies in France (I've always worked for small business) : you don't need formal procedures, people will do their best and know what they have to do whatever their job desc states. And they will spontaneously help their colleagues if they feel their 'honor' commands them to do so. Problem is what works perfectly in a 30-people company does not work that well in a 10,000-people company. And also explains why we do have in France a lot of "small wonders" that never turn into "huge champions" like Google or Apple.

My personal experience

I was CFO and General Manager for France for a software manufacturer (approx 75 employees). The CEO  was french but had moved to California to develop US business. We'd been acquired by a San Jose, CA based company. It was fairly easy to deal with my new boss (company's CFO) and "indirect bosses" (General Counsel and HR VP). But I experienced a lot of tensions, struggles and misunderstanding with "peers". Finally, after 10 months, I decided to quit. Partly because of those tensions and mostly because my position was making less and less sense as control was centralized in California.

Tensions were largely between me and the VP US controller (may be the wrong title - the person was just "under" the CFO). Let's call him John. John was a real nice guy, very pleasant to deal with outside work when I was on business travel in San Jose or when he was in Paris or Lyon. But I must admit John was bothering me. A lot. And I could easily feet it was reciprocal. So the company CFO was constantly forced to act as a referee, which he was reluctant to do because he was very busy with other things and he did not want to push back nor John nor me. I was feeling that John was stubborn and not dedicated to the company, being in a pattern when he was just doing "his job", no matter what the company needed. It was easy to understand that he was thinking (as well as the CFO, at least for a part) that I was unmanageable, constantly doing things I was not asked to do, challenging things not meant to be challenged and a factor of disorganization. I can't remember us arguing is San Jose. I had a big number in my balance sheet on €/$ conversion risks. In my eyes, it was something to address. In his eyes, it was not to be taken in account because company procedures did not mention it. I was under the impression he was pushing the dirt under the carpet, he was under the impression I was making a world of something not that important while I was not addressing issues I was meant to address.

We were purely in the cultural mismatch I was exposing in the first chapter. I was in a "logic of honor". I had a view of my CFO's job that was not based on my job description but on feelings. So I thought this forced me to address issues I felt were important for the company even out of my scope. I also thought I had not only the right but also the duty to address this issue and couldn't care less about the effects on the company organization or on my peer's feelings. And I really apologize to John (and the CFO) for that. Not addressing those issues would have meant losing honor to my eyes and that was not bearable. The same applies to my peer. John was in a pure 'logic of contract'. He had a job to be done, following his job description and company procedures. He was working hard and very efficiently pursuing this goal. For him, addressing other issues would have bring disorder in organization and less efficiency in 'real issues'.

We were both right, both eager to do the best for the company, willing to interact at best, yet we mostly failed because we were trapped in our cultural vision bias. I can see this now ... 4 years after. This is something to keep in mind for people managing other people on the other side of the Atlantic Ocean. And also for managers or governments. You can't just look at the Japanese, US, Scandics, or German model and copy/paste into your country. That does not work well. Taking good ideas in other countries ? Of course but you have to deal with your history and culture. The 1789 Revolution did not ban the Ancient Regime organization that still survives more than 2 centuries after. A CEO or a Republic President who'd think he can delete History would be foolish and would fail.