We don’t need carrots and sticks to incentivise people. We need those with a deep understanding of our values - that is what guides us. And if we’ve got people who are not living the values, they might have to work elsewhere.

I came to see, in my time at IBM, that culture isn’t just one aspect of the game—it is the game. In the end, an organization is nothing more than the collective capacity of its people to create value. Vision, strategy, marketing, financial management—any management system, in fact—can set you on the right path and can carry you for a while. But no enterprise—whether in business, government, education, health care, or any area of human endeavor—will succeed over the long haul if those elements aren’t part of its DNA.

When executives deliver that routine cliché of modern management – ‘Our people are our greatest asset’ – the commercial value of the collective intelligence developed within the corporation is probably what they have in mind. The asset is the capability of individuals and teams within the business to solve problems, to devise and deliver new products and to win

the commitment of suppliers and the trust of customers. Collective intelligence is the basis of the competitive advantage of most successful corporations, and it is enshrined in its people.

The focus on the firm as a collection of capabilities gives a different and more illuminating perspective for understanding the extraordinary diversity of business organisations and of businesspeople over geographies and over time. The core ideas in this book – collective intelligence, radical uncertainty, disciplined pluralism, relational contracts and the mediating hierarchy – have been extensively developed and discussed by earlier writers, though much of that work has been outside the context of business organisation. The relevance of each to the argument of this book arises from a belief that in the modern world successful commercial relationships are not simply instrumental and transactional; they are social and are embedded in a wider framework of communities and teams. That transactional view was both incorrect and unattractive. This book is written in the hope that a better account of how business and its stakeholders flourish will point the way not just to a better understanding of business but to the better conduct of business itself. In a successor volume I will try to explain some of the implications of that understanding for both business policy and public

Policy.

As I worked on this book, I puzzled where core values fit into the research findings. To be clear, there is no single unified set of core values across all the people in this study. That said, each person developed a set of values somewhere along the way, some more explicitly than others. These values might have come from family, or mentors, or teachers, or military service, or the ethics of their field, or the social milieu in which they lived, or their faith traditions, or reading and reflection, or personal experience, or some combination. I came to see that living to a set of core values is a choice, a personal responsibility of the highest order.