Chances are you have worked in an organisation that has articulated its values, but somehow the process just hasn’t worked. On the other hand, for those of you that work in an organisation that lives its values, you have probably been a part of something truly special.
Rosabeth Moss Kanter’s recent book SuperCorp, is based on her weighty Harvard Business School research project investigating the fortunes of “vanguard” companies – multinational corporations that embed purpose, vision and values. She concludes “their endurance and generally stellar financial performance, despite occasional setbacks and industry downturns, is largely because they nurture their cultures – the values and principles that inform their practices and organizational models”.
So if these complex giants are able to integrate and guide their companies with values, why is the practice not more common? One of the reasons is that culture change is usually gradual and requires an ongoing investment. The business world only became aware of the importance of purpose, vision and values with the release of books such as Tom Peters and Robert Waterman’s In Search of Excellence in 1982 – still relatively recently, in terms of changing generational habits. The importance of these elements were reinforced in a number of books such as Built to Last, by Jim Collins and Jerry Porras a decade later.
By then companies were spending dollars and energy creating missions, vision statements and lists of values. Typically these were generated in boardrooms or executive meetings and were communicated to staff in varying degrees. But when times get hard, as they invariably do, managers revert to the known and that which they can measure, such as money, quality and compliance. Hence over time a general cynicism about commitment to values sets in, as staff perceive they are only given lip service. If a consultant were to approach a company today offering to help with purpose, vision and values, the response would probably be “we’ve done that” – these essentials have largely been relegated to “fad” status.
Creating a values statement is not hard – the challenge is in embedding them into the culture. Edgar Schein’s model of culture (right) reveals how those newly espoused values need to become artifactual, or visible and audible in the workplace, and eventually change the underlying assumptions about what organisational life is all about. No quick fix!
Rosabeth Moss Kanter’s book provides some inspiring examples of how values are generated and embedded. Perhaps the most spectacular was the 100 year old company IBM. In 2003 the company invited the global giant’s 350,000 staff in 170 countries to take part in a web chat to refresh their values. Over 140,000 participated in this “values jam”. Eventually the values were distilled down to three:
- dedication to every client’s success
- innovation that matters for our company and the world
- trust and personal responsibility in all relationships.
You can image that in a company of such geographical spread, that managers would vary in the degree that they champion the values, but the intention is that these values guide all activity. CEO Sam Palmisano commented “It wouldn’t do to create values from the top like Watson did; today people are too sophisticated, global and cynical. We want people to connect to the entity in a way that’s relevant to them”.
All of the vanguard companies in Moss Kanter’s project “recently rewrote or strengthened their statements of values in a participative way”. The companies used their core values to guide strategy and innovation. Cemex a leading Mexican company use its values to retain the integrity of the company as it expands globally. Korea’s Shinhan Bank drew on their values to guide a merger with the Chohung bank.
Closer to home – the New Zealand Refining Company
While the experience of global giants can edify and inspire, how are local companies using purpose, vision and values. Recently I have had a close association with the New Zealand Refining Company (NZRC). They aspire to be New Zealand’s best company. Over the last three and a half years, CEO Ken Rivers has invested a lot of energy in revitalising the company’s values. When Ken arrived at the NZRC he felt that there was no clear understanding of what the organisation wanted to achieve. Based on the belief that a company is more likely to achieve results if it is clear about what it aspires to, Ken embarked on envisioning, and developed processes to make the vision happen.
The three complimentary projects that emerged are leadership development, organisational learning and values driven performance. Together, these initiatives, now embedded in business planning, are being implemented throughout the organisation.
Ken enthuses about the emergence of a mental model of more informed and quality conversations, leading to better analysis and leading, in turn, to better decision-making. Thus staff become less reactive to events, and more mindful of the deeper implications of events. The values-based performance culture reinforces this process and fosters the values and behaviours that support improved performance.
To embed values, the NZRC is offering staff professional development exploring their personal values. Staff get to reflect on how they are living their values. This process is now widely valued by staff. The next step is to enable exploration of the alignment between individual values and company values.
Ken is beginning to see the dividend from these initiatives. Excitement is building throughout the organisation as staff are given the space to rethink their work in relation to their own lives. The consistent articulation of values and encouragement to engage more meaningfully in dialogue is reflected in higher levels of engagement, now measured regularly. Ken is seeing much better quality, congruent conversations and deeper communication as people are learning to say what they think.
Another evidence is the impressive safety record at NZRC. Safety is articulated as “our number one priority” and companies throughout New Zealand are turning up to learn how the NZRC does it. The NZRC is learning the value of investing in the embedding of values.
What is the connection to stakeholder engagement?
Rosabeth Moss Kanter’s vanguard companies are having an increasing social impact. “Their values and principles tend to make their leaders more attentive to societal needs and more willing to support innovation and investments to address those needs”. Their social action has moved away from dispensing loose change (philanthropy) to pursuing real change as a win-win with the communities they are embedded in.
Values guide action rather than prescribe action. And if staff are able to connect with the company’s sense of purpose and values they become effective ambassadors. They also keep alert for opportunities and engaged staff are primed to engage positively with stakeholders.
Hopefully more organisations will reinvest in defining their values and develop the behaviours to model and embed values.