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Corporate Values Provide Strong Foundations for Organisational Effectiveness

by Bob Selden

I once worked for an organisation that seemed to embody the epitome of the ideal. In fact, everything the management gurus suggest should be evident in the "excellent" organisation, was there. Employees who were dedicated, management who cared about the staff (and who knew the business!) and customers who were loyal. The organisation even had a marketing department that involved the staff in the latest advertising and promotional schemes before going public! The corporate colours were blue and gold, and it was said that staff would die for the company if necessary and their blood would flow in the corporate colours!

Although I thoroughly enjoyed working there (and like all the others, would have shed blood, too), I thought the halcyon environment was merely a fluke and it was my good fortune to strike it lucky. With hindsight, I can now see the logic of why this organisation worked so well: it was the solid foundations on which this idyllic structure was built.

Those foundations were the corporate values. However, they were not mentioned overtly. Nor were they written up on any brass plaques. But evident they were. How did this organisation succeed in having "everyone singing from the same book"? The answer lies in the nature and extent of the training that all staff experienced, which was established and supported by the CEO. For example, everyone joining the company attended two weeks of induction training before commencing in his or her role. This even applied to senior managers, who might be responsible for managing some of their fellow trainees.

It has taken me some years and the study of hundreds of organisations to realise that cementing organisation values into the training fabric of an organisation can have a dramatic impact on collective performance.

Some management writers have coined a phrase that has become more faddish than realistic – "walking the talk". It is intended to mean that management (and particularly top management) must model the behaviour they expect of others. But how often does it happen and more importantly, does it work?

As Rob Lebow (1997) points out: "The only thing that really changes behaviour is when the proclaimed values are practiced at every level including at the top". The inference can be drawn that not only must managers "do what they say", but there also must be a collective understanding of "what precisely it is that we should all do".

Management education and development can be the vehicle that drives the collective understanding and turns the corporate values into practical, day-to-day behaviour. My experience suggests that few organisations take the time and effort to base their management training on such solid foundations as corporate values.

Has your organisation tried MBO? Quality Circles? TQM? ISO9000+? Benchmarking? Process Engineering (or re-engineering)? Core competencies? Six Sigma? While all these strategies are based on sound theory (and often other organisation's experience), they do not reflect the very nature of why your organisation has been successful – corporate behaviour that is based on shared values. As a senior manager of a very successful Korean organisation put it "Corporate values work in mysterious ways – they can spur performance and satisfaction while instilling a sense of pride in belonging to a unique organisation".

All organisations have values, whether they be publicly evident or not. Before deciding to base the organisation's training on the values, it is important to have some understanding of what these values are. Lebow suggests there are two types of values; business values and people values.

Business values are directed at the outside world, for example, "high product quality" and "superior customer service". People values are directed to the inside world, for example, "trusting people" and "giving credit where it is due". My experience suggests that when the business values and the people values are in harmony, the organisation is healthy. When the two are not in sync, training and education (whilst being well-meaning) will not be effective over the longer term.

It is the leaders of the organisation, especially the CEO, who must convert the corporate values into day-to-day behaviour at all levels. Additionally, in their studies, Evans and Afors (1996) found that leaders who are committed and stick to their principles are those who have a personal alignment between their own welfare, the common good, and the organisation's values.

To help leaders develop the necessary leadership skills, training should be planned in four phases.

  1. Identify each leader's personal values.

    This requires individuals to consider when (in their career to date) they have been most satisfied, motivated, and valued at work. What values did this role satisfy? This enables the leader to enunciate, perhaps for the first time, the values he or she inherently hold and often use as their basis for decision making.

  2. Using their personal values as a base, leaders then develop a scenario of their ideal organisation.

    Phase two requires managers, first as individuals and then in teams, to describe their ideal organisation. What does it look like? How does it function? What does it value?

  3. Leader's then assess their own organisation against their ideal.

    In phase three, managers compare their own organisation to their ideal. What is inhibiting my organisation from being more like my ideal? What enables my organisation to be similar to my ideal? Compiling a list of inhibitors and enablers helps managers see how personal values can relate to their organisation's values.

  4. Leaders then develop strategies for moving both personally and organisationally towards the ideal.

    The final phase involves developing strategies for translating the shared values into day-to-day actions. This must also include some personal and regular "walk the talk" type activities for every leader.

One of the most effective ways of doing this is to repeat the four-phase leadership training approach mentioned above with managers and staff throughout the organisation and at every level. Each manager leads his/her team to assess the core values and how they can translate them into their field of operation. Senior managers at the strategic level of the organisation such as the Heads of Marketing, Quality, HR, Finance, Production, IT, R&D, etc., should use this process to develop organisation-wide policies for their areas. At the local level, managers should use this process to develop day-to-day action plans for translating values into action.

What results can an organisation achieve through this value-based training approach?

I once assisted an organisation to successfully implement this approach. Dick, a well-respected and experienced CEO, had been appointed to head up the amalgamation of three government departments into one major organisation. He knew that he had a challenge on his hands when after 12 months at the helm he asked a question of his top 100 managers at their regular monthly briefing meeting and got no response. His question: "Who can tell me the seven corporate values we established some six months ago, and most importantly, what impact they are having on the organisation?" Rather than berate his managers for their lack of dedication, Dick immediately put in place a 12 month Leadership Development Program embodying the four phased approach mentioned previously. At the very first day-long briefing session on the new program, Dick displayed his own personal values together with an overview of the results of a leadership profile displaying his own strengths and weaknesses as a leader. He immediately demonstrated a personal "walk the talk" strategy.

As well as the sometimes hard to measure "team togetherness" results of this values approach to leadership, there is also another important and well defined outcome. Research by Joseph Badaracco (1992) finds that values affect decision-making. When a manager is faced with a difficult decision, what are the criteria by which he/she acts? Corporate values can provide a manager with an effective decision making tool. For example, when faced with a difficult decision, they can help managers decide:

  • Which course of action will do the most good and the least harm?
  • Which alternative best serves the others' rights, including shareholders' rights?
  • Which plan is consistent with the basic values and commitments of my company? Can I live with it?
  • Which course of action is feasible in the world as it is?

Managers do not always understand how and why they make a decision. When asked and after perhaps some careful consideration and reflection, they may say "it just seems right". Enabling mangers to consciously make decisions that "seem right" can be actively influenced through leadership training that is based on corporate values.

Organisations need leaders who can show the way and in whom people trust. Building leadership training on a solid foundation of corporate values can change the rhetoric into action so that leadership at all levels becomes a case of "do as I do".

References:

  • Badaracco, J. L. (1992), "Business Ethics: Four Spheres of Executive Responsibility", California Management Review, 34(3), 64-79.
  • Leaders in Australia (1996), Cultural Imprints Pty Ltd, Warrandyte, Victoria.
  • Lebow, R. (1997), A Journey into the Heroic Environment, Prima Publishing, Rocklin CA.

Copyright © The National Learning Institute

About the Author

Bob Selden has a passion for management and leadership development. He's had the good fortune to be able to help a number of organisations with the development of their people. He'd be happy to share some of his views and experience – please contact Bob via www.nationallearning.com.au

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