Why are so few companies values-driven? Even when they start down that path, why do they wind up dead-ended?
A 2012 study shows “employees want their organizations to display honesty and integrity in business activities,” and “when leaders behave consistently with the core values, they earn employees’ trust and confidence.”
More so, it makes good business sense – research shows high-trust companies significantly outperform those that aren’t in the marketplace.
So why do so many companies fail in their effort? Here’s a true story and the 5 common errors they made that will derail any effort, including yours.
A True and Typical Story
This is a true story, but the name has been withheld to protect… well, frankly, me. It is an organization I am involved with. But it really doesn’t matter who the company is because, sadly, it’s a pretty common story.
Someone on the leadership team suggested it would be a good idea to identify company values. The task was assigned to a small group to bring back to the team.
The group sent out a company-wide survey, and then held a meeting to review the results where they identified five values. They presented their list to the leadership team, who formally adopted them as the company values.
The values were sent in a memo to all employees, were published on the website and listed in the employee handbook. There was no further discussion about them. And today, if you asked someone what they are, they would need to look them up.
How can you be a values-driven company if people don’t even remember what the values are?
5 Reasons Their Effort Failed
Error #1:Â Â Seeing values as separate from the real work.
The leaders delegated the task and then disengaged. If they had taken the time as a team to discuss what values they believed were critical to their future, they would have seen how the values could drive the behaviors needed to accomplish the work and achieve the business results.
Error #2:Â Â Lack of conversation.
It was a mistake to rely on a survey to identify values. They missed the opportunity to engage the workforce in a conversation. It is only through involvement and dialogue that values becomes more than words on paper – where people clearly understand them and become committed to living them.
Error #3:  Failure to link values to the organization’s purpose or mission.
Because values guide behavior and decision-making, it is important to choose the values that are needed to guide the organization into the future. Simply identifying the values that currently exist describes where you are, but these are not necessarily the values needed to help you get where you want to do.
Error #4:Â Â Failure to be descriptive.
Words mean different things to different people. It is important to provide a clear definition and examples of what the behaviors look like for each of these words.
Error #5:Â Â Lack of feedback and accountability.
Processes need to be set up to monitor whether the values are being modeled by leaders and lived throughout the organization, to know if they are being used to resolve values conflicts, or to provide consequences for serious violations. Without feedback and accountability, the effort of identifying values becomes simply an activity to check off a list, rather than a guiding force.
A Look at Another Company
Here are another company’s published values:
Respect: We treat others as we would like to be treated ourselves. We do not tolerate abusive or disrespectful treatment. Ruthlessness, callousness and arrogance don’t belong here.
Integrity: We work with customers and prospects openly, honestly and sincerely. When we say we will do something, we will do it; when we say we cannot or will not do something, then we won’t do it.
Communication: We have an obligation to communicate. Here, we take the time to talk with one another… and to listen. We believe that information is meant to move and that information moves people.
Excellence: We are satisfied with nothing less than the very best in everything we do. We will continue to raise the bar for everyone.
Publishing values like these might look good, but they won’t help you become a high-trust, values-driven company unless you also pay attention to:
– Involving people widely in identifying the values.
– Clarifying exactly what they really mean, with specific examples of behaviors.
– Linking them to the company’s mission.
– Integrating them in real work.
– Setting up feedback and accountability processes to ensure they are consistently lived.
Most likely this company made all five errors, since these are the 2000 published values of Enron.
Another excellent and important post Jesse.
I love this one and it also brings to mind a chapter (or two) that I recall reading in your book, Full Steam Ahead. In the story, you clearly shared how this was a concern in the company used in the story and then shared how each department took ownership of the values by #1) ensuring they were realistically tied to not only the company’s core vision and mission, but more importantly, to each specific department. And #2) how involving the employees in each department in the creation of those values enables ownership.
Once employees have ownership of the values, the more likely they will be lived because they not only know what they are, but they understand how they are directly tied to the products and services they are providing to their clients and/or customers.
Thanks for sharing Jesse.
Exactly! a very nice summary. Thanks for further illuminating these important points, Samantha.
The problem starts when a company wants to communicate values because having values is what companies do these days. They’ve seen it somewhere and people seem to like it. So, let’s have it, too. Values are turned in a marketing tool with little substance.
Every time I see a website that simply lists a few buzzwords as their values, I know they are not real about it. I guess, you have seen examples like this, too:
“These are our values:
Respect
Integrity
Sustainability
Quality”
Doesn’t say anything about their values, but says a lot about the company.
I think, a company who got things right is Atlassian. I never worked there, but I’m told they do have a great culture driven by values. And you can see a difference when checking out how they talk about their values. No buzzwords there.
A list of words isn’t going to get your anywhere, as you point out, Sebastian.
I agree the place to start is with the question, “Why do you want to do this?’ I discuss this in more detail in my post how to write a mission statement, where I state “If the only reason you want to write a mission statement is because you think you’re supposed to have one, don’t bother. It will be a waste of time.”
excellent reference. thank you.
My most important lesson as a CEO is that I had to carry the values. I had to walk the talk – and just as importantly, I had to talk about the values behind the action or decision I was taking. Employees and customers see and feel the values as they are carried out each day, and no one is more important to that process than the CEO.
Some would say that’s the most important role of a leader. Thanks for sharing your perspective. It’s always helpful to hear from one who is speaking from years of successful experience.
Hi Jesse- there is a big difference between what I call “blah blah talk” and authentic walk. Having a credo on the headquarters wall is one thing. Living it is something else. The latter takes work, buy-in from ALL stakeholders (starting with the leader), and constant reinforcement.
Good points. I have seen a lot of leaders come back from the exercise of identifying their values excited about them and then fail miserably in implementation. If they pay attention to the 5 areas outlined here, they will have the stakeholder buy-in and reinforcement you talk about. The hardest challenge is to not look away and make excuses when a values breach occurs and that’s the start of a very slippery slope.
How sad, isn’t it–that an organization thinks values can be delegated, posted and then forgotten. Unless they are lived daily, talked about,and modeled, they are but empty words. When someone starts talking values, I always ask, “How would you know it if you saw it?” That’s why organizations need to bring in facilitators– It often takes an outsider, with no agenda, to push and prod to get folks to say what a value REALLY means.I am so glad you also posted Enron. Makes one want to gag.
By the way– values don’t just belong in business. Governments, religious institutions, nonprofts all need to read this article. I suspect many of us feel that too many of these groups hide behind empty words.
You named a huge issue, Eileen. Nonprofits and religious institutions often don’t think they need to look at their values because they they are “naturally” values-based, and yet many are oppressive and depressive workplaces.
ps. Glad you liked the Enron example. At first glance the way they articulated their values looks like a good start. I would have encouraged them to be more specific as you point out in your comments. But it’s a lot better than a list of words like Sebastian shared. But in the end, it doesn’t matter whether they published a perfect example because they failed miserably in implementing them. It’s a good reminder that how you create it and how you live it are as important as what it says.
Jesse, you couldn’t be more correct. I have seen, and been involved myself, and these exercises to identify values, only to have the organization put them in their rear-view mirror after they were written.
It’s a wasted effort if values are not held in high regard and made a fabric of the organization. Companies that do this just don’t understand the process and are just checking off another item on their to-do list.
Values are the skeleton of the organization. Without them properly set into the body of the company, everything will fall flat.
Love your statement – “Values are the skeleton of the organization.” You remind me that values are always operating as they are the beliefs about what’s important that drive behavior and decisions. The problems is when the real values do not match the articulated values, as in the case of Enron and so many others.
Hi Jesse
Nice stimulating post as usual. I believe it is the leaders personal values that should set the tone of the company; not a fabricated list for everyone to try and live up to. By taking the personal approach it invariably leads to mutual values that reassure the Customers to place their business. Best Regards Raymond
Thanks for your thoughts, Raymond. The role of leadership is so important. When the real values of the leader are naturally aligned with what is needed in the company, everyone benefits – employes, customers, investors. And we have seen many disastrous consequences when the leader’s personal values are not aligned.
Hi Jesse. Thanks for another great post.
Having spent my career in the energy industry, I have spent a lot of time with ex-Enron people and without a doubt the culture in pockets of that particular organization was highly dysfunctional.
I’d like to point out another common error. Failure to link values to organizational decision making. When the decision making process allows the organizational values to be ignored, they are no longer worth they paper they are written on. I’ve had the good fortune to work for an organization where the values where the decision making framework. If your planned actions aligned with the values, go ahead. If they didn’t, stop. It worked remarkably well. That was an organization that lived it’s values.
Kind Regards.
David Pethick
Co-Founder, Leading.io
Thanks for raising this important point, David. Failure to link values to decision-making is not simply one of these process errors – it’s THE whole point of identifying values. When it’s done right, you end up with values that drive behavior and decision making. When they are not done right, it doesn’t matter what guidelines are put in place, people will find a way to get around them.
I, too, have had the good fortune to work for a company where the values were embedded in the culture and naturally guided decision-making. Companies like these are a joy to work in and are models of what is possible. Unfortunately, they don’t get as much publicity.
Much thanks for your thoughts and deepening the conversation!
Bravo Jesse for pointing out five errors that get in the way of robust values that really imbue the culture and impact behaviors and decision making.
One company I recall that did it right followed your advice to think through what values would be needed to support a shift in strategy from a low price to a customer value strategy. The other thing they did right was to talk through, very candidly, how the values lined up with their personal values, what behaviors they would naturally exhibit and where they would have to change their habits. They held themselves and each other accountable for the changes they would need to make. It took hard work and they let people know what they were up to so others would see that they too would need to change. As a result they did not experience the dissonance in values and what top leaders do. The business strategy worked and they grew from $500 million in revenue to &1 billion in 3 years. Now that is valuing values.
Thanks for sharing this, Jeannie. It’s so important to share these kinds of stories because they show what’s possible and the benefits of doing it right.
Great post Jesse. The leaders need to involve everyone in identifying the values and hire and fire by those values in order for the values to be truly incorporated..
I had written about my personal opinion on building (http://rmukeshgupta.com/2014/06/18/how-to-build-organizational-culture/) & transforming (http://rmukeshgupta.com/2013/09/11/transforming-organization-culture/) organizational culture)
Wishing you a merry Christmas and looking forward to many more such thought provoking pieces in 2015..
Thanks for sharing your thoughts and the links to your posts. I look forward to reading them, Mukesh.
Great Stuff! We just formed our “team”. Core Values will be at the top and this info is very helpful in creating ownership and belief in the values. The biggest challenge year in and year out are making the values real and not just words! Thanks, love your stuff!
Identifying your values at the start of a new team is one of the best things you can do to ensure its success. Also clarity and agreement on purpose. Going slow in the beginning will help you go faster later on. Great to hear from you, Brian.