This is part one of a three part blog series.
Values today are a widely documented and often revered “must have” management tool and it’s rare to come across a transformational change agenda that doesn’t involve a significant role for meaningful, differentiating values.
Alistair Brown worked with Johnson and Johnson in the late 70’s at the time of the famous Tylenol crisis and experienced at first-hand how J&J’s values (Known then as the J&J Credo) contributed to the key decisions taken that prevented a financial collapse and still serve the company well today.
Today we face another health and economic crisis, one which is more far reaching, that doesn’t just threaten the health of countless people – but also the health of and sustainability of countless organisations too. Once again, the importance and worth of values is evident - in how organisations are treating their people and guiding difficult decisions, with no similar past experience to call on, that determine how organisations need to change and adapt in the face of uncertainty. How can your values help guide you through an overnight recession, rapid decline of commuting, the low touch economy and exponential growth in home working, the collapse of global supply chains, the demise of retailing as we know it and the rapid acceleration of digital transformation.
One of the most fundamental starting points in harnessing the power of values in your organisation is defining them in a meaningful and inclusive way that enables consistent interpretation.
The challenge is values at their worst can be well-intentioned but often bland generic statements with little or no consistent meaning or true attachment to the organisation, sometimes created aspirationally, rather than grounded in reality or aligned with purpose and strategy and as such difficult to connect with and guide daily personal choices.
Values can also become part of an internal marketing strategy, with inordinate amounts of time and energy being spent crafting eloquent but delusional statements. They sound great but can be hopelessly out of touch with the daily reality experienced by those within the organisation expected to live out those values.
This creates tension within an organisation - between its “espoused” and “actual” values. This tension can result in cynicism and disenfranchisement and perhaps even more dangerously, passivity towards an organisation’s “espoused values.” All of this serves to undermine the whole process – and even the credibility of the leadership behind it when “What they “Say” conflicts with “What they do”. Consequently they often “live on the walls” rather than in the “Hearts and minds” of the workforce and deliver no value.
Events surrounding Covid-19 have surely tested this credibility and been key to a rapid and effective response that united, engaged and reassured people around “The right thing to do”. However for others it has highlighted cracks between “espoused” and “actual” values in organisations like never before. If organisations are to emerge beyond this crisis - intact and hopefully stronger - these cracks in values must be quickly recognised and addressed.
Beyond the internals of an organisation the external costs of a failure around values can also be severe. Throughout the years there is no shortage of examples of organisations which have invested heavily in values but have very publicly failed to live them out. Billions have been lost in revenue alongside the cost of reputational damage. Think Volkswagen emissions, Tesco financial reporting, BP Environmental damage and Gerald Ratner’s Jewellery!
So the need to understand what values are is obvious. So what are they?
In terms of trying to understand what values are, Jim Collins and Jerry Porras led the way in providing evidence and an explanation of their importance in their book Built to Last (1994).
Patrick Lencioni then provided further thought and challenge in this area in his article back in 2002: ‘Make your values mean something.’
Lencioni’s continued work in this area has sought to provide further definition around the understanding of values by distilling them down into groups named: Core, Aspirational, Permission-to-play, and Accidental values.
These distinctions can be useful for helping leaders both formulate and communicate values in organisations. However for the purposes of this article let’s keep it simple with some of these key points explaining the ‘what’ around values:
Organisational glue that connects people through articulating behaviour norms that drive engagement and execution.
Clusters of explicit behaviours described by honest and authentic statements or themes that you expect from your people and are essential to success. These are the essentials, not the nice-to-haves. Imperatives not choices that relate to your strategic direction and culture vision.
Clear behavioural statements support this and define your culture by guiding consistent interpretation of your Existing, Real and Aspirational values over time and help people personally connect and share appropriate behavioural feedback.
A collection of internalized, rules, guidelines policies and processes that are then shaped and guided by your culture. It leads to recruitment, on-boarding, development, feedback, recognition and reward - aligned with your values. Carefully designed to help people adopt certain ways of working and embed these behaviours, whilst also discouraging other behaviours over time.
A company’s values and culture are fundamentally inter-connected, but they are not the same. Values are the starting point for actively defining and shaping your culture, culture being the dynamic and evolving outcome of those values. The behaviours associated with them will become embedded and naturally and truly become “how we do things around here”.
In other words, “actual” and not just “espoused”.
In next week’s article we are going to look around a bit more at ‘why’ values are so important to success in organisations.
Greg Neville has nearly two decades of experience developing leaders and teams within the business, non-profit and voluntary sectors. Greg is passionate about helping organisations develop their organisational culture to fulfil the purposes of the organisation and best serve their people. His personal experience of this includes working for organisations in the midst of this process – including his role leading the regional office of a UK wide charity fundraising company and successfully facilitating cultural change that led to a turnaround in performance, results and quality. Greg is passionate about values. His related interests also include the interplay between culture and strategy within organisations, and how organisations communicate values and subsequent culture to personnel within organisations.
Alistair Brown is an experienced multi sector Business leader having worked in leadership positions in global organisations for over 20 years before moving into consulting roles for the last 15 years. My corporate experience was with Johnson and Johnson, Smith & Nephew, Nestle and Hallmark Cards, which included 3 CEO roles and 10 years at board level and cutting my teeth in post M&A integration and cultural change.