Corporate values or core values as some call them, have been in management texts for many years. As more and more business leaders complete education and training, so more and more firms have written value statements. But are these statements just marketing puff or is it really a tool to run a business by?
Hit the self-destruct button!
In this piece we look at one business that has hit the self destruct button by saying one value is important, but employees clearly have not got the memo!
Core Values
Corporate values and trust. We need to have things we can trust. Much like the value of currency, values help us understand what an organization is really about
Understanding Core Values – Company Values Definition
http://examples.yourdictionary.com/examples-of-core-values.html
“Core values are the fundamental beliefs of a person or organization. The core values are the guiding principles that dictate behavior and action. Core values can help people to know what is right from wrong; they can help companies to determine if they are on the right path and fulfilling their business goals; and they create an unwavering and unchanging guide.”
Read more at http://examples.yourdictionary.com/examples-of-core-values.html
How do we find the core values of your company?
“How do I find the core values of my company?” In the article, Aligning Action and Values, Jim Collins discussed that organizational values cannot be “set”; but you can discover them.
Many organizations make the mistake of picking core values out of thin air and trying to fit them into their organization. Worse they have committees and “working groups” pontificate on what the values of the business should be.
In reality of course core values are not a “one size fits all”. Certainly there will be some overlap of values between organizations in any one industry or sector. What is important is that values are truly what the organization does value. What the organization DOES use for decision making. What it DOES use for its planning and recruitment.
Do core values really help business?
Long running businesses like Maersk have their values not just printed on a wall, or in their induction packs. They recruit to them. They manage with them. They also realise that not everyone is perfect, and that it’s about the journey towards achievement of applying the values that is important. They are USED daily for decision making.
The Maersk Group Core Values
- Constant Care
- Humbleness
- Uprightness
- Our Employees
- Our Name
Source: The Maersk Group – The values are constant in a complex world – a must read for anyone interested in REAL corporate values.
I was lucky enough to work for the Maersk group. Before this I thought I understood what company values were really about. But I have to say I learnt so much working there. It was a shame the contract came to an end! For Maersk, values are EVERYTHING. and this is not their PR engine saying this. It’s me an ex employee. They are a great exemplar in this arena.
When values go wrong
One of the problems with aspirational values, is that they are just that. Aspirational, not necessarily a reflection of what is. They are not a true part of “the way we do things here”. They are stuck on a wall or on PowerPoint slide shows and not used DAILY for informing decisions.
One increasingly famous incongruence of the breakdown of corporate values is the changes to LinkedIn. Several times senior leaders at LinkedIn have said that the core or corporate values of the organization are important.
In October 2012 Jeff Weiner, CEO at LinkedIn wrote a blog called “From Vision to Values: The Importance of Defining Your Core” – https://www.linkedin.com/pulse/20121029044359-22330283-to-manage-hyper-growth-get-your-launch-trajectory-right
In it he outlined the corporate values for LinkedIn (and not for the first time). They were listed as:
Values – The principles that guide the organization’s day-to-day decisions; a defining component of your culture.
- Members first
- Relationships matter
- Be open, honest and constructive
- Demand excellence
- Take intelligent risks
- Act like an owner
Imagine this. You spend time crafting and writing a thought provoking article or blog. You post it on your favorite social media site. Days pass. Weeks pass. But no comments or Likes. Was your piece really that dis-interesting?
When LinkedIn updated its groups in October 2015 it made a significant change. When its own auto-moderation software stopped publication, or when a group manager feels a piece is “not appropriate” and DELETES the piece, it is NOT deleted. It is just HIDDEN from all but the poster!.
So as the author you feel that your piece is there and being seen. But in reality no-one can see it.
This IMHO is dishonest.
WORSE – it goes against the stated values of the publishing organization, LinkedIn. This is DISHONEST, it is NOT OPEN.
So when group managers and moderators asked LinkedIn about deleting post not actually being deleted the reply from a representative of LinkedIn in a management group said:
In reply to this one member summed it up neatly:
…picture yourself going to the US Post Office to mail a letter, or to FedEx or UPS, and the arrangement is that the PO will accept your letter, say they delivered it, but reserve the right to not deliver it without letting you know what really occurred. Would you do business with the PO, FedEx, or UPS? Would you look for alternatives that you could “trust” to let you know if your letter was actually delivered or not?
Other changes include the belief that members in LinkedIn groups have set to receive emails. But LinkedIn stopped sending these too!
Trust is critical. When a core value of a business is honesty, and part of the product design breaks this value, there is a problem! What do you trust from them?
It’s all in the numbers
The net result of not living your values? Well in LinkedIn’s case it is a disengagement of it’s members. People are “leaving” LinkedIn in their droves. That is they have parked their profiles for recruiters to find, but are no longer active on a weekly basis as they once were.
The public face of LinkedIn are saying to their stakeholders and shareholders that engagement is up. But in several groups of leading group managers (who run many of LinkedIn’s largest groups), there is a feeling of a ghost town. Groups that used to have dozens of new discussions are getting none. Spam has increased, and new people joining groups dropped from 100s a week to 10s a month.
Even in November 2015 Jeff Weiner was giving presentations about the importance of being open and honest. At the very same time his developers and product managers were delivering a product that is clearly not meeting the honest and open parts, and from the discussions with 7000 group managers, membership does not seem to matter (remember their stated value “Members first)!
Source Reuters.
Corporate Values and stated core values are important
Ask any student who has completed an MBA and they will say that every business has to have:
- Vision
- Mission
- Strategy
- Objectives
- Priorities
- Culture
- Core Values
But having them is one thing. Using them on a day to day basis is quite another.
Just look at firms like Maersk. They hire on values. They fire on values. They live and breathe by the values. They know as a business they are not perfect. But they strive for consistency. Indeed they reject work (income) when it does not fit the values. Corporate values should be the core values. They cannot be written by committee. They are not a product of engagement and discussion. But the articulation by a passionate leader that does what it takes to run the business BY the core values.
At the slightest sniff that the values are not being adhered to, a great leader will intervene. In the case of LinkedIn, CEO Jeff Weiner will not survive long with this lack of leadership. Either that or the company will go the way of “MySpace”. Who are they you might ask!
What happens when values are not followed?
Simply put, we trust suppliers and organizations to do what they say they are going to do. Trust in business is EVERYTHING. From the trust we have in our national banks for the dollar and pound notes we have in our pockets, through to the belief that the product we ordered will arrive on the day they say it will.
In the UK many national chains of furniture have gone into liquidation due to unmet promises. Remember “world of leather” Fairpak and Uno Plc?
Core Values and Mergers and Acquisitions (M&A)
One of the biggest reasons that there are failures in the Mergers and acquisitions market space is culture. Just because the products and services might support the growth of a business. The corporate culture could be the one thing that makes it fail. Many M&A strategies fail to look at the culture and values of an organization. This is one place when enlightened M&A teams use tools like The BIR in addition to typical due diligence approaches to see what the compatibility is like. Any merger and acquisition activity is about a lot more than just a financial transaction. Sure that is the headline, and the reason for the purchase. But success or failure is often down to culture and core value alignment.
Values need to mean something
The core values of a business or organization need to mean something to employees and customers alike. Even as long ago as 2002 this piece in HBR highlighted the dangers of hollow values Source HBR https://hbr.org/2002/07/make-your-values-mean-something
“If you’re not willing to accept the pain real values incur, don’t bother going to the trouble of formulating a values statement.”
A true set of Core values, should not be aspirational, but maintained at all costs. If honesty is the value – be honest, no matter what people will think. They WILL respect the honesty!
There is nothing wrong with having aspirational values as an organization transitions, but they should be in addition to Core Values, not replacements!
Make values a management commitment
Tony Hsieh, CEO of Zappos. has “committable values”. This means the company is willing to hire and fire based on whether people are living up to the values. This is independent of their performance on the job. This sends a clear message that the company doesn’t just pay lip service to the values. Values help managers and leaders make daily decisions about the running and future of the business.
Core values and HR
Sorry fellow HR professionals. This is not for us! Sure we need to hire people aligned to the values, and help remove people that are not aligned. But writing and facilitating the capture of values is NOT an HR or a consensus activity.
You gain consensus to a value by people staying and buying in to the values or leaving!
Any set of values developed and published by consensus in an established organization is doomed to failure.
Corporate values and behaviours – the dangers of not walking the walk #hrblog #linkedin
What do core values mean to you, your people and your customers?
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