“When I hear the word 'culture'…”

July 2004

“…I take out my pistol”, said the ‘Iron Chancellor’ Otto von Bismarck, who believed only in strength. In his military opinion, ‘culture’ could have only one single role: strengthen the national power of the State. His famous adage, even if often distorted has had a number of imitators, especially in the world of corporate enterprise. ‘Culture’, by essence ‘free’, has become ‘tolerable’ in the mind of the new ‘managers’ only if it reinforces strength and power of the company, which means, in today’s business world, ‘profitability’.
In our watch industry, as in other sectors of the economy, we have witnessed a gradual and progressive denigration of the role of culture. Culture is not easily quantifiable, nor is it necessarily or rapidly profitable. In this sense, those who hold the true reins of power in a business, that is to say the accountants, or the accounting machine that in the end validates all actions, can only place it in the ‘red ink’ category.
As long as an company is managed by a ‘boss’ and not by the Stock Exchange, ‘culture’ can find a place for itself within the structure, for the pure and simple reason that ‘long-term’ thinking dominates the strategy. ‘Culture’, although it may not be obviously ‘profitable’ in the short term, deploys its benefits over the long term. Of course, it does not become ‘an investment’ for which we can rationally calculate future profits, but it nevertheless contributes, and often in an essential manner, to the solidity and good health of the company. We might compare it to the roots of a tree which, by growing deeper and anchoring the trunk in the dark, ensure the growth of the branches in the light.
For the promulgators of the current dominant ideology of ‘now and immediately’, what happens in the shadows is of no concern. The roots are ‘useless’ and of ‘no value’ because they are not seen and do not enter into the plans of the accountants who care only for how big the ‘branches’ grow.
This ideology, and it is a real ideology, uses weapons (the ‘pistol of Bismarck’) to impose itself. One of these arms is the adoption of new international accounting standards, which will apply to all publicly held European companies beginning in 2005. The introduction of these new standards, whose goal is to unify the presentation of the accounting ledgers, makes the investor (and not the managers) the deus ex machina of the company. Technically, the accountants’ grasp extends throughout the entire life of the business, which must quantify profits of every single component within the corporation as a separate line item. So, since ‘culture’, by its nature, cannot be quantified, its line must be removed from the ledger.
In the world of watchmaking, the elimination of ‘culture’ due to reasons of non-compatibility with accounting standards is particularly unfortunate. We saw an example of this recently when the managers of a large watch group, judging that a ‘cultural’ demonstration seemed insignificant, tried to quantify it in terms of immediately tangible results, with a total loss. The goals of this ‘cultural’ event were to simply educate the public, to show off beauty, to sow a few seeds for the future. But, obviously, nothing could be sold here!
To lose one’s ‘culture’ is to lose one’s substance. In the short term, this might be positive for the bottom line, but in the long term, say ‘hello’ to the damage caused by the shortsightedness! History has shown us, all too often, that great collective disasters always begin when we start throwing books on the bonfire.