Monday, March 5, 2012

Aligning Values. Game On!

A number of years ago I did some work for a company who proudly told all employees that the core values  (there were 8 in total) included:
  1. Courage
  2. Integrity
  3. Unity
When it came to "Courage", employees were afraid to tell the CEO they (I am using 'they' instead of he or she) were wrong in case the employee got sacked. 

Every day employees would switch on their computers and low and behold there were the corporate values spinning around and around on the desktop. You see, if it is on the computer then it must be true!


McKinsey 7s
In 1980 an article appeared in Business Horizons, called "Structure Is Not Organisation" written by Robert Waterman, Tom Peters and Julien Phillips. In the article the 7-S framework first appeared. It was later (1982) made famous in the book In Search Of Excellence by Waterman and Peters.

At the heart of the 7-S model sits Superordinate Goals which was later renamed Shared Values. To quote the Business Horizons article, "The word "Superordinate" literally means of higher order. By superordinate goals, we mean guiding concepts - a set of values and aspirations, often unwritten, that goes beyond the conventional formal statement of corporate objectives. Superordinate goals are the fundamental ideas around which a business is built. They are its main values. But they are more as well. They are the broad notions of future directions that the top management team wants to infuse throughout the organization. They are the way in which the team wants to express itself, to leave its own mark."

Values are subjective. My values are not the same as yours. Likewise organisations may have very different values. Think PETA vs Exxon. Finally you may work at a company where your own values do line up with the corporate values.

As a Manager, Business Owner or CEO it is very easy to manage by numbers, but what about managing by values. Personally I have found this considerably more complex when an organisation is undergoing significant change. This is because not only are people losing their jobs, income etc which in itself may be misaligned with many peoples' personal values but at the same time new employees may bring with them a different outlook with their own values. Creating a culture aligned to the corporate values is  not only difficult but without doubt a hallmark of great leadership. In "Who Says Elephants Can't Dance" (2002) former IBM CEO Lou Gerstner, the man credited with the mammoth turnaround of IBM wrote, "If I could have chosen not to tackle the IBM culture head-on, I probably wouldn't have. My bias coming in was toward strategy, analysis and measurement. In comparison, changing the attitude and behaviors of hundreds of thousands of people is very, very hard. Yet I came to see in my time at IBM that culture isn't just one aspect of the game—it is the game"

Just as the Business Horizons article stated in 1980, "... a set of values and aspirations", so Lou Gerstner wrote about "...attitude and behavior" some 22 years later.

Back to the company first mentioned in the opening paragraph. Simply putting a list of the "values" on everyone's computer is not changing a culture. It is merely stating a wish list. Without the CEO living the values, how could they expect employees to embrace the words spinning around on their desktop? Interestingly enough, the company, like many other large corporations, has performed poorly over the last few years, losing considerable market value. Whilst many would blame various economic and other external factors, one could argue that a lack of value based leadership has had just as much influence on delivering the bottom line. As Lou said "it is the game", and clearly the wrong game was played!

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