VALUES MATTER
Values determine how a company achieves its business goals.
“Your culture is your brand. We wanted a list of committable core values that we were willing to hire and fire on,” Zappos’ CEO, Tony Hsieh wrote in a recent blog post on Harvard Business Review.
Values are both personal and public. They affect people’s lives on a day-to-day basis, and they determine an organization’s ability to do business over the long term.
“Take care of your people first, then customers will follow,” David Neeleman, founding JetBlue CEO, said way back in 2003 in a lecture at Stanford University.
Whether companies are taking major steps to do right by their employees, assuming greater environmental responsibility or becoming community development advocates, there’s a lot of buzz around the perception of company values. Admittedly, there are a variety of terms to describe corporate responsibility efforts, but it all comes down to a discussion of values.
Many companies have a long history of philanthropic activity, which has laid the foundation for their corporate values to mature and be shared throughout the organization. For many companies these endeavors have become key to establishing the corporate brand and embracing global citizenship.
“The true test of a leader’s character isn’t what happens in an organization when you’re there, but when you’re not there,” Procter and Gamble’s COO, Bob McDonald said in a lecture at MIT Sloan School of Management.
Values provide a framework for executive behavior and the establishment of company culture. Also, like-minded companies tend to work better together, so shared values build stronger partnerships. Corporate values frame the dialogue and constrain the behaviors of the people within an organization.
To ignore the need for clear and consistent values in an age when companies are under such scrutiny is foolhardy. Similarly, companies that carefully craft their values so they support their brand and give them competitive advantage set themselves up for sustainable growth and profitability.
EIGHT TRUTHS ABOUT CORPORATE VALUES:
Truth #1:
Values, explicitly communicated and demonstrated by a set of behaviors, engage and motivate employees. Leaders who are clear on their expectations get better results from their people. Employee engagement is enhanced when people understand the expectations of their leadership. Cultural norms identify people for interventions early enough in their careers to make changes.
Truth #2:
Company executives must manage the values of the corporate culture to maximize their competitive success. Companies rely upon collaborative work and therefore values must be addressed to bring people together and reduce the chances for conflict. Removing internal competition allows the organization to focus on external competition.
Truth#3:
Executive values define a distinct culture which supports the promises of the corporate brand. Brand integrity requires supporting behaviors at all levels of the organization. Executive behaviors must align to the corporate values to enhance and demonstrate brand veracity.
Truth #4:
A well-defined culture improves employee development, performance management, and engagement. If we understand our culture we can predict how we impact our customers and support market activities. Understanding our culture allows us to change and manage it long term
Truth #5:
Leadership training and development requires a clear set of corporate values to align performance. Employee performance requires both core skills and interpersonal qualities. Training and development can affect change in unwanted habits or strengthen desired skills set.
Truth #6:
Today’s executive must be responsible and exemplify corporate citizenship. Development programs can transcend simple skill development and support maturing and grooming world-class executives.
Truth #7:
When cultural values are defined, they create a foundation for changing behavior and adapting to new business requirements. Bringing new employees aboard with clear standards of culture and conduct is critical. Teams and individuals must understand the cultural norms in order to operate successfully.
Truth #8:
Culture can become a key element of a company’s brand and market differentiation. Companies can be more resilient and adaptive when culture is well defined and managed. When changes are required to improve a company’s competitive edge, a thorough understanding of corporate culture helps everyone involved anticipate how those changes will be received.
To wrap things up, I’d like to share a personal observation from my years working as an executive at GE. At an important time in the company’s history, values like integrity allowed GE to establish a higher level of performance in business dealings. Working toward higher ethics not only differentiated their corporate brand, but also offered a competitive advantage. The long-term impact included the avoidance of legal issues and the improvement of the company’s customer base. Corporations can no longer settle for their products and services being the best. In addition, they—and their executives—have to stay keenly aware of the example they set in the marketplace.