The value of values

7 minute read

7E704AA1-8512-4EB7-9071-CB7F46E4C7F2Some years back the insurer, AMP, commenced a series of staff workshops about its new corporate values. The programme was professionally designed with expensive folders and slide decks all prepared. Management had seen the content and thought it would do a terrific job of ‘reshaping the culture’.

Except it didn’t.

At the very first workshop in downtown Wellington staff were so affronted by the gulf between what the workshop puffed up as ‘our values’ and their everyday experience that at lunchtime they marched up to the CEO’s office and dumped their folders in a pile on his floor.

 

Most leaders believe that corporate culture is one of the top three drivers of a firm’s value, and nearly 100% say that ‘improving’ culture would increase their company’s value. The NZ Public Service have even had its core value or “the fundamental characteristic that unifies and motivates public servants” written into law: acting with a spirit of service to the community.

 

The official point of values statements is to shape the actions and decisions of people in the firm. However, as the old sayings go, words are cheap and saying is not the same as doing. Google, for example, whose motto was once “Don’t be evil” gathers and hordes more personal data on individuals than does an autocratic state like China. Volkswagen, the company which faked diesel emission test results in the EU and the USA, lists integrity as a core value. Aircraft manufacturer Boeing admitted deceiving regulators about the safety of the 737-Max flight control system that lead directly to the deaths of 346 people, yet it describes safety, quality and integrity as core values. It apparent from what firms actually do that values statements are more often than not virtue signalling.

 

And to rub salt into the wound, an investigation by economists found that an organisation’s proclaimed values bore absolutely no relationship to its financial performance. On the other hand, employee perceptions of managerial ethics and trustworthiness did predict productivity, profitability and the state of industrial relations.

 

Nevertheless, employees care deeply about what firms say they value and believe in. A LinkedIn survey of more than 3000 people found 70% of professionals in the U.S. would not work at a leading company if it meant they had to tolerate a bad workplace culture. In fact, 65% would accept lower pay than deal with a bad workplace environment.

 

In Winsborough’s work on corporate culture we’ve always drawn a distinction between a firm’s guiding values (the words on the posters) versus its daily acts (what actually happens on the ground) and a core feature of our leadership training is ensuring leaders map value statements onto tangible behaviours to minimise that space.  

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Now a delightful study from MIT has managed to investigate the size of the gap. When it comes to their core values, do companies walk the talk?

 

The researchers first extracted value descriptive words from the published corporate value statements for 500 large companies (yes, all in America, but I don’t think they are that different from anywhere else). Then using data from Glassdoor – a website where employees can rate their company and describe the culture – they used machine learning to measure how positively or negatively employees talked about a specific value in the open comments of their Glassdoor reviews.

 

There were a number of very striking findings.  Most companies list around four to six values. In terms of popularity integrity was the most frequent value, held by 65% of companies. Collaboration appeared in 53% of values lists, customer focus 48%, respect 35% and innovation (32%). There was a long tail of 60 other values: civility came last with only 1% of firms citing it.

 

The researchers then examined the degree to which employees mentioned the firms values in their Glassdoor reviews – if a company states teamwork is a value, is that reflected in what people report about behaviour in the firm?

 

Ah, no.

 

Looking at over 1.2 million reviews of 500 companies reveals that there is no correlation between the cultural values a company emphasises and how well the company lives up to those values in the eyes of employees.

 

Zip. Zilch. Nada.

 

What a firm says it values and how people describe experiencing it shows no correlation at all. And that, I submit, is a profoundly dispiriting finding. Even more striking was the finding that if a firm listed collaboration, customer orientation, execution, or diversity, staff reviews produced a negative link.

 

Let that sink in.

 

Firms having diversity (or collaboration etc) as a value actually predicted staff describing a non-inclusive workplace. While that is a bleak finding, for me it actually underscores the importance of workplace culture – and values – and how alert humans are to their non-adherence. Or put more simply, if you are going to put your values on the wall then you better live them on a daily basis, because staff know to mind the gap.

 

Why values do matter?

 

Values are enormously powerful. Teams in which people have shared values bond more quickly, have less volatile disagreements and remain more committed. People whose values ‘fit’ with organizational purpose experience a stronger sense of belonging – and in an extreme case, the beliefs and values of religious groups can sustain them through incredible hardships over very long periods of time. Just think of the Taliban.

 

As Shadi Hamid of the Brookings Institute points out The United States never understood Afghan culture in a deep way. While the Taliban are brutal and cruel, they are immeasurably less corrupt, impose better governance and are more present than the distant, western educated and privileged Kabul elite were. Moreover the Taliban share close religious values (albeit more extreme) than the Afghan citizenry and have deep roots in communities. Imposing values from the outside – even if well-intentioned – messes with people’s sense of meaning and purpose. (Although now the Taliban may find that the values of city-dwelling Afghan women have shifted too – and that will inevitably lead to nasty fighting, oppression and subversion).

 

There are important lessons for leaders here. From the MIT research the best predictors of an organisation’s culture rating were, in order:

  • employees feel respected
  • leaders are supportive
  • the firm offers job security
  • leaders live the core values
  • absence of toxic managers

 

The assessment of the top leadership team by staff in their Glassdoor ratings is four times as important as any other variable in predicting a company’s cultural ranking.

 

Corporate leaders should think hard about this research and lessons from war. “Change programmes’, ‘restructures’ and values workshops that are imposed from the corporate centre might be analogous to the profound biases and blind-spots of American planners, and their failure to read signals from the ground. Change-resistance is not something to be suppressed, but understood more as a values mis-match.

 

If you are a leader reading this, then there are very practical steps you can take to align behaviour with the company values.

Step one: make sure your own behaviour is an exemplar of what you want others to do.

Step two: make sure the values are actionable. Integrity is nice, but how do you do it? How should someone on the shop floor do it?

Step three: explain why these values matter. Are you virtue signalling, or is there a reason to care and commit energy to behaving in these ways that benefits me, my whānau, friends and community?

Step four: get out on the ground and understand the daily reality of life for people in your company. Listen to what people who actually do the work have to say about their daily experiences.

 

Meanwhile, AMP’s culture continues to dog the company. A recent Sydney Morning Herald article was headed “AMP’s curse: the company that kills careers”. It was about the gap between a toxic leader’s behaviour and the company’s values.

 

Photo credits: Unsplash.com / Lina Torchez

Unsplash.com / Kaleidico