Developing Organisation Values is more important than you probably ever imagined!
And being able to clearly state it – wherever you may be! Also truly believing it directly affects your bottom line – and is measurable and able to be benchmarked!
As they say “Trust me – because it does!”
These are all crucial questions – challenges, indeed pain points – for many in C-Suite.
Respect, integrity, communication and excellence: these were Enron’s self-professed values, before accounting fraud brought down the firm. So you’d be justified in thinking that the values listed on corporate websites don’t really matter. Wrong!
Yes, talk is cheap, and public proclamations aren’t the same thing as living up to one’s values. (the Enron example.) Still, stated values might also represent a firm’s aspirations, the type of company it strives to be. If that’s the case, maybe the values on a company’s website are meaningful after all; without harping on it perhaps Enron was the exception rather than the rule.
In today’s internet-based digital world of rapid change, therefore it should be the centre piece of the home page and social media campaigns.
As one HR Director of a Melbourne based medium sized client firm very assertively made the comment to my 2IC – charged with planning, implementing and executing a ‘values based’ campaign from scratch – “None of that warm and fluffy stuff please!” He is dead right!
Therefore the upshot in my view – don’t dismiss the corporate values statement. It seems to be linked to financial performance. And if developed appropriately top down/bottom up brings rich engagement – measurable and benchmarked.
Now if that does not sustainably enhance your bottom line – I do not know what does in an ongoing sense!!!
In my experience with years of assisting Boards and CEOs craft meaningful strategies, the more meaningful values and guiding principles a firm lists on its website, the better its financial performance. And the more those values differ from competitors’ values, the better the company performs. These relationships might not be causal, I caution, but they offer a plausible reason for the
link. One could argue that espoused values are the calling card to recruit talent and to show good citizenship. If firms that take recruiting seriously are more likely to post more values, that could help explain the relationship. That old adage is relevant – ‘Employer of first choice!’
Also why does listing different values than competitors correlate with performance? This reflects a timeless principle of competitive strategy: differentiating yourself is one classic way to stay profitable.
This suggests that values do matter, and that when firms state those values publicly, they’re saying something meaningful about who they are.
Core values are the essential and enduring tenets of an organization. A small set of timeless guiding principles, core values require no external justification; they have intrinsic value and importance to those inside the organization. The Walt Disney Company’s core values of imagination and wholesomeness stem not from market requirements but from the founder’s inner belief that imagination and wholesomeness should be nurtured for their own sake. I still am a raving fan of that man and all that he stood for – even when I was in short pants!
Should you create a set of organisation values?
I have always believed the idea that values should be timeless. But recent US research makes a point — companies that changed their values between 2005 and 2008 had higher return on assets than those that did not. You might argue that this is merely capturing short-term financial performance, and that more stable firms — the Disneys, with their timeless principles — will win out in the end. But maybe there is another explanation.
Companies that changed their values also tended to have more differentiated values, a key part of strategic advantage. So perhaps the lesson isn’t quite that dynamic values beat stable ones. It’s that even timeless values aren’t a substitute for good strategy – however if you have buy-in throughout the organisation – a win-win for all stakeholders must be the outcome if ‘rolled out’ appropriately.
Today’s key challenge as I see it throughout the national leadership and business community – is to show effective leadership behaviours to instil values in organisations with large national and/or global teams.
This should happen in my view from the ‘top down’ and owned from the ‘bottom up’.
If you accept this, therefore the critical question arises – ‘so does stating what your company stands for, affect your bottom line amongst other key areas?’
Should it just focus as the outcome having a positive impact on the bottom line?
If you are the Chairman or Managing Director, do you know not only what you stand for – but also as the current Custodian of corporate Stewardship, do you really know what your company stands for?
These are intrinsically vexed – but necessarily crucial questions – to be addressed.
To repeat – so in your role as the Leader in C-Suite do you know what you stand for as the Custodian and Leader – your Values – and what your Organisation stands for?
And do you know that stating what your Company stands for impacts directly on the bottom line?
Therefore, finally and importantly, do you know that if ‘rolled out’ appropriately such a valuable undertaking involving all your people will result in:
- increased engagement
- enhanced morale and reduced staff turnover
- optimal talent management and retention
- a very positive impact on the bottom line
- and guess what? Your firm becomes an employer of first choice!
Therefore people – employees at all levels – do wake up in the morning and really want to come to work. Not bad at all!