Humanistic Capitalism at Brunello Cucinelli

Francesca  Gino; Gary  Pisano

Case | HBS Case Collection | August 2019

Humanistic Capitalism at Brunello Cucinelli

Abstract

This case explores one company’s attempt to experiment with a different underlying model for a capitalist enterprise. Brunello Cucinelli, S.p.A. is a leading manufacturer of luxury fashion apparel. Despite being a publicly traded enterprise with annual revenues exceeding 500 million, the company follows a somewhat unique human resource and cultural model. The company’s founder, Brunello Cucinelli, has striven to create an enterprise that follows principles of what he calls “humanistic capitalism”. Human capitalism, according to Cucinelli, means pursuing growth and profitability in a “gracious way.” At the company, humanistic capitalism manifests itself in a very specific set of policies and behavioral norms. Workers are paid wages that exceed 20% of the market norms; the workday (even for senior executive) is limited to the hours of 8:30 AM to 5:30 PM; emails are not to be sent after hours or on weekends; lunch breaks are one and half hours long to allow workers to have lunch at home should they choose. There are also strong cultural norms emphasizing respect and dignity. As part of this culture, employees are expected to keep their workspaces clean; eating at desks is not permitted; water can only be drunk from cups (not bottles); speaking should be done in hushed tones so as not to disturb colleagues. None of these cultural norms, however, are explicitly described in any written documents. The company has adopted this model in both its Solomeo, Italy headquarters and in its North American headquarters located in New York City.
The case allows students to explore the strengths and weakness of this culture and human resource model. A particular focal point of the case concerns the question of whether such a model is scalable and transferable across geographies. Does this model contribute to the company’s success or is ‘humanistic capitalism’ only possible because of the company’s underlying success? Is this model sustainable? The case invites discussion of deeper issues concerning alternative models of modern capitalism.

Keywords: corporate culture; Human Resource Practices; Growth; growth strategy; motivation; values; fashion; Capitalism; Organizational Culture; Values and Beliefs; Human Resources; Management; Business Model; Policy; Behavior; Growth and Development Strategy; Luxury; Italy;

Language: English

Format: Print

29 pages

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Citation:

Gino, Francesca, and Gary Pisano. "Humanistic Capitalism at Brunello Cucinelli." Harvard Business School Case 920-007, August 2019.

When entering into a negotiation, individuals have the choice to enact a variety of communication styles. We test the differential impact of being “warm and friendly” versus “tough and firm” in a distributive negotiation, when first offers are held constant and concession patterns are tracked. We train a natural language processing algorithm to precisely quantify the difference between how people enact warm versus tough communication styles. We find that the two styles differ primarily in length and their expressions of politeness (Study 1). Negotiators with a tough communication style achieved better economic outcomes than negotiators with a warm communication style, both in a field experiment (Study 2) and in a laboratory experiment (Study 3). This was driven by the fact that offers delivered in tough language elicited more favorable counteroffers. We further find that the counterparts of warm versus tough negotiators did not report different levels of satisfaction or enjoyment of their interactions (Study 3). Finally, in Study 4 we document that individuals’ lay beliefs are in direct opposition to our findings: participants believe that authors of warmly worded negotiation offers will be better liked and will achieve better economic outcomes.

In a recent article published in Journal of Personality and Social Psychology (JPSP; Huang, Yeomans, Brooks, Minson, & Gino, 2017), we reported the results of 2 experiments involving “getting acquainted” conversations among strangers and an observational field study of heterosexual speed daters. In all 3 studies, we found that asking more questions in conversation, especially follow-up questions (that indicate responsiveness to a partner), increases interpersonal liking of the question asker. Kluger and Malloy (2019) offer a critique of the analyses in Study 3 of our article. Though their response is a positive signal of engaged interest in our research, they made 3 core mistakes in their analyses that render their critique invalid. First, they tested the wrong variables, leading to conclusions that were erroneous. Second, even if they had analyzed the correct variables, some of their analytical choices were not valid for our speed-dating dataset, casting doubt on their conclusions. Third, they misrepresented our original findings, ignoring results in all 3 of our studies that disprove some of their central criticisms. In summary, the conclusions that Kluger and Malloy (2019) drew about Huang et al. (2017)’s findings are incorrect. The original results are reliable and robust: Asking more questions, especially follow-up questions, increases interpersonal liking. (PsycINFO Database Record (c) 2019 APA, all rights reserved)

Case | HBS Case Collection | November 2019

Starbucks: Reaffirming Commitment to the Third Place Ideal

Francesca Gino, Katherine B. Coffman and Jeff Huizinga

On April 12, 2018, two African American entrepreneurs had scheduled a business meeting at a Starbucks in Philadelphia’s Rittenhouse Square neighborhood. They sat without ordering, waiting for a local businessman to show up for the meeting. The store manager called 911 on them, despite the fact that they were behaving neither violently nor disruptively. When the police arrived soon after the call, they arrested the young men. The incident was viewed by the Starbucks’ leadership team, including the CEO, as “a disheartening situation” and, in the words of John Kelly, the company’s Senior VP of Public Affairs and Social Impact, “a profound failure to live up to our ideals and a violation of our values.” Starbucks, which employed around 175,000 individuals nationwide and served more than 4 million customers daily in its approximately 8,000 U.S. stores, strived to abide by its mission statement: “…To inspire and nurture the human spirit, one cup, one person, one neighborhood at a time.”
The case describes how the company and its leadership responded to the crisis. To react to the incident, the leadership decided to close down its stores for a day of unconscious bias training, aimed at raising awareness of racial bias and discrimination in particular. The company also started a journey of providing more training and development for the partners, to assure that they lived by the company values on a daily basis, and revised store policy that, the leadership believed, contributed to how the store managers and employees in the Rittenhouse Square store behaved back in April 2018. As the case closes, CEO Steve Johnson reflects on how he could assure that every Starbucks employee not only understood the company mission and values, but truly connected to them emotionally and carry them out daily in their work.

Keywords: Mission and Purpose; Values and Beliefs; Prejudice and Bias; Crisis Management; Employees; Training;

Citation:

Gino, Francesca, Katherine B. Coffman, and Jeff Huizinga. "Starbucks: Reaffirming Commitment to the Third Place Ideal." Harvard Business School Case 920-016, November 2019. View Details

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