There are 4 fundamental questions that every leader must be able to answer if they want to be clear on where there organization is going. Where Great Purpose addresses why we work, and DNA and Mission address what we will accomplish and who we are, values guide how we work. This guidance can be intentional, or it can be unintentional, because every organization has values. The question is: “Will we choose the values that will guide us, or will we allow ourselves to be pushed around by the riptides of opportunity and crisis?”
Identify and Define Your Values
The enterprise that says – “We don’t waste our time on things like values. We’ve got a business to run!” – is, in reality, showing their underlying values. Examine the pattern of decisions and you’ll know what their “values statement” would say.
The business that says it values integrity, but rewards the salesperson bringing in the most business while cutting ethical corners, is displaying its true values. The stated values are not real, of course, but the company still has values. By their fruit, you will know!
Question: Why do identifying and defining a company’s core values, and then intentionally guiding the enterprise accordingly, attract and keep extraordinary people?
Answer: Human beings won’t give their discretionary effort – their imagination, heart, conviction, or honor – to a company that doesn’t mean what it says. Human beings might decide that they need to stick with a bad company in order to keep a paycheck coming, but human beings won’t go the second or third or fourth or fifth (or tenth) mile for such an enterprise.
Question: What makes great companies great?
Answer: Human beings who go the second or third or fourth or fifth (or tenth) mile, without having to be told or asked.
Question: How do you get human beings like that?
Answer: You identify and define your values. Then you do two additional things, which we’ll dive into next.
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Hire, Manage and Reward Based on Values
When Paul O’Neill became Chairman and CEO of Alcoa in 1987, he informed his board and upper management that worker safety was his number one priority. But for O’Neill, a declared value had to be translated into action, into how money got spent and how managers made decisions day by day. “In every organization, written values statements all say the same thing,” he remarked later to a group of Harvard University business students. “‘Our most important asset is our people.’ There’s [very] little evidence that it’s true in most organizations.”
Making values operational was O’Neill’s preoccupation, and for him that included planning, decision-making, hiring, and firing. It also included organization, supervision, employee evaluation, and rewarding success. In fact, the world’s breakaway companies hire for values. They look for the integrity, drive, humility, respect, honesty, capacity to accept feedback, humor, courage, etc. that the company values. “Really smart” does not cut it if ego runs roughshod over everyone. “Highly competent” is always replaceable.
When O’Neill took over the reins at Alcoa, revenue was $1.5 billion. When he retired 13 years later, revenue was $23 billion. In this same period, O’Neill improved the safety record within Alcoa’s workforce of 140,000 employees from 1.86 lost workday incidents per 100 employees per year, to 0.2 lost workday incidents per 100 employees per year. His goal throughout that period was to drive that number all the way to zero.
Hold Self and Others Accountable for the Values
People and organizations are judged based on their behavior, not their words. Trust is established and sustained based on actions not promises. Therefore, making sure that values matter starts with the actions of the leader. Leaders must walk the talk and they must ask those around them to also be held accountable for modeling the values.
In Managing By Values, by Ken Blanchard and Michael O’Connor, an organizational chart is depicted, looking very typical in many respects. The line-level workers are depicted at the bottom. Above them are mid-level managers and above them, the executive team, then the CEO. Above the CEO is a final box on the chart, occupied by “The Company’s Values.” In other words, everyone answers to the values.
One of the CEO’s I work with told his story: “When I took over, morale was terrible, there was no standard of behavior from team to team, and the culture was Darwinian. Fear ruled. When I first introduced the importance of values, everyone was skeptical, but I stuck to my guns. In time, I won believers, and the culture began to shift. People began to test me by doing what our values said. I praised them, including when it cost us money. Naturally, I began to win more and more believers.
“One day, I was on the plant floor talking to a maintenance man, and I made a little joke – a criticism, to be honest – at the expense of one of my managers. The maintenance man became very quiet, scuffed his feet on the floor, took a deep breath, and then looked me in the eye. ‘Boss,’ he said, ‘You’ve been talking about how we should respect each other. I beg your pardon, but I don’t think that was respectful.’
“That was the day I knew that we had broken through!” the CEO concluded. “A maintenance worker called me out on a values violation! It was one of the best days of my life!”
Again, I ask the question: What makes great companies great? If you take the time and steps necessary to identify and define your values, then hire, manage, and reward based upon those values, and ultimately hold yourself and others accountable for those values, you will have created a great company full of great people who will always go the extra mile for you.
It all starts with leaders and managers who translate their “good intentions” to be people of ethical standards into people who live out those values in their organizations every day.
John Stahl-Wert is co-author of the best-selling book “The Serving Leader” and serves as President of the Newton Institute. Learn more at newtoninstitute.com.
Photo by Alejandro Gonzalez (Unsplash.com)