Does Your Company Actually Live Its Values?
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Leadership Jun 4, 2018

Does Your Com­pa­ny Actu­al­ly Live Its Values?

Stat­ing cor­po­rate prin­ci­ples is great; embody­ing them is better.

Employees share values

Michael Meier

Based on insights from

Bernard Banks

Few com­pa­nies set out to be cor­rupt, or know­ing­ly employ unprin­ci­pled peo­ple. And none want their employ­ees’ actions splashed across news­pa­pers, going viral for all the wrong rea­sons. So how can it be that — in an age of orga­ni­za­tion­al val­ues state­ments and cor­po­rate social respon­si­bil­i­ty — fraud­u­lent or oth­er­wise uneth­i­cal behav­ior con­tin­ues to persist? 

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It turns out that get­ting peo­ple across the orga­ni­za­tion to actu­al­ly adopt a company’s val­ue sys­tem can be eas­i­er said than done. 

Orga­ni­za­tions do a great job of com­ing up with their philoso­phies and prin­ci­ples,” Banks says. But it is often hard­er to see how they live up to those val­ues on a day-to-day basis.” 

Bernie Banks, a clin­i­cal pro­fes­sor of man­age­ment and asso­ciate dean for lead­er­ship devel­op­ment at the Kel­logg School — as well as a retired U.S. Army brigadier gen­er­al — describes four key steps lead­ers can take to ensure that their orga­ni­za­tions walk the talk. 

Artic­u­late Your Organization’s Val­ues

Vis­it the web­site of any com­pa­ny and you are like­ly to find a writ­ten expres­sion of the company’s val­ues. These guid­ing val­ues — from employ­ee safe­ty to envi­ron­men­tal sus­tain­abil­i­ty to com­mu­ni­ty bet­ter­ment — tend to be clear, uncon­tro­ver­sial, and indis­putably positive. 

Yet employ­ees at these orga­ni­za­tions do not always behave accordingly. 

Take BP’s 2010 Deep­wa­ter Hori­zon spill. Although one of BP’s stat­ed val­ues at the time was safe­ty, the company’s man­age­ment, employ­ees, and con­trac­tors in fact engaged in a series of short­cuts that com­pro­mised safe­ty, ulti­mate­ly lead­ing to eleven lost lives (not to men­tion 5 mil­lion bar­rels of spilled oil). A report from the Coast Guard and Bureau of Ocean Ener­gy Man­age­ment, Reg­u­la­tion, and Enforce­ment pinned the dis­as­ter on poor risk man­age­ment, last-minute changes to plans, and insuf­fi­cient train­ing, among oth­er factors. 

All the lit­tle things that tran­spired on a dai­ly basis were not reflec­tive of try­ing to take a safe and sound approach,” Banks says. In iso­la­tion, each one of those lit­tle bit­ty things doesn’t mat­ter, but then it ulti­mate­ly aggre­gates and then boom, you have a blowup.” 

Banks rec­om­mends a more explic­it approach than sim­ply assum­ing employ­ees get it” and have thor­ough­ly inter­nal­ized the company’s val­ues. Lead­ers should rou­tine­ly refer to these prin­ci­ples before, dur­ing, and after a project. How do those prin­ci­ples tru­ly match up with the way the project is unfolding? 

Mea­sure Against Those Stan­dards

But, of course, any effort to align val­ues with actions needs teeth. Once a com­pa­ny has made a habit of artic­u­lat­ing and reflect­ing on its prin­ci­ples, the next step is to devel­op a way to mea­sure how well they are act­ed upon. Such mea­sure­ment can be done as part of employ­ees’ per­for­mance eval­u­a­tions — so long as the exer­cise is tak­en seriously. 

Many per­for­mance-eval­u­a­tion sys­tems say they exam­ine more than just the task itself,” Banks says, but the real­i­ty is lots of orga­ni­za­tions do not apply the same lev­el of scruti­ny to exam­in­ing the how’ as they do the what.’”

IBM made head­lines two years ago when it com­plete­ly revamped its per­for­mance-review process. Gone was the tra­di­tion­al for­mat that saw employ­ees estab­lish goals at the begin­ning of the year, have a mid-year review, and then receive an end-of-the-year rat­ing. In its place came Check­point, an app-based review sys­tem that lets employ­ees cre­ate short-term goals and receive man­age­r­i­al feed­back at least once a quar­ter through­out the year. 

Many per­for­mance-eval­u­a­tion sys­tems say they exam­ine more than just the task itself, but the real­i­ty is lots of orga­ni­za­tions do not apply the same lev­el of scruti­ny to exam­in­ing the how’ as they do the what.’” 

Crit­i­cal­ly, rather than eval­u­ate per­for­mance sole­ly against estab­lished goals, Check­point was designed to offer a more holis­tic review process based on five dis­tinct cri­te­ria: busi­ness results, impact on the firm’s suc­cess, inno­va­tion, skills, and per­son­al respon­si­bil­i­ty to others. 

You and your employ­ees need to exam­ine how they are treat­ing oth­ers,” Banks says. When I was run­ning orga­ni­za­tions, I had indi­vid­u­als who were extreme­ly com­pe­tent, but I thought the man­ner in which they gen­er­at­ed results some­times was not con­sis­tent with our core val­ues. I’ve had indi­vid­u­als who just evis­cer­at­ed peo­ple as a tech­nique for gen­er­at­ing short-term out­comes, but that behav­ior is not going to engen­der long-term commitment.” 

Call Out Behav­ior in Your­self and Others

But it is impor­tant for the align­ment between val­ues and action to go beyond indi­vid­ual performers. 

Banks sug­gests that com­pa­nies bor­row from the U.S. Army, which rou­tine­ly con­ducts what it calls cli­mate sur­veys” — assess­ments that exam­ine just how well indi­vid­ual behav­ior in aggre­gate reflects the organization’s core val­ues. Exact­ly how do val­ues such as, say, team­work or inno­va­tion actu­al­ly man­i­fest them­selves? In the Army these sur­veys are annu­al, but orga­ni­za­tions can con­duct them as fre­quent­ly as lead­er­ship finds helpful. 

Key to these sur­veys’ suc­cess, Banks sug­gests, is find­ing thought­ful ways to share the results across the orga­ni­za­tion. Instead of the results just being for the eyes of the tit­u­lar leader, they become the basis for a con­ver­sa­tion about not only what has tran­spired, but what we want to see tran­spire going for­ward,” he says. 

Results can be dis­sem­i­nat­ed via email, dis­cussed in quar­ter­ly coun­sel­ing ses­sions, or high­light­ed in employ­ee recog­ni­tion events — as long as when employ­ees high­light issues, lead­er­ship is ready to bring the company’s deci­sions back into align­ment with its rhetoric. 

Peo­ple will only tru­ly engage to the extent they believe that what they’re doing mat­ters and that action will be tak­en as a result of it,” Banks says. If you don’t fol­low up, if they don’t see that you actu­al­ly refer to those things and incor­po­rate them in a very inten­tion­al way in future deci­sions, then over time peo­ple will just become numb to it.” 

Of course, hold­ing up the behav­ior of your team for scruti­ny will be less effec­tive if you are not walk­ing the walk on the organization’s val­ues yourself. 

When he was a young offi­cer in the U.S. Army, Banks bought into the idea that sol­diers were oblig­at­ed to fol­low him regard­less of how he act­ed toward them. But as he gained expe­ri­ence, he came to real­ize that while those sol­diers under­stood his author­i­ty, lead­ing meant both set­ting an exam­ple and encour­ag­ing oth­ers to act positively. 

There’s a mis­con­cep­tion that in the mil­i­tary you just order peo­ple around,” Banks says. But no mat­ter what your title is, peo­ple don’t have to fol­low you. A great leader tries to get indi­vid­u­als to will­ing­ly open them­selves up to your authority.” 

Invite Out­siders to Cri­tique the Company’s Actions

Strong orga­ni­za­tions active­ly seek out feed­back from any­one who comes into con­tact with that orga­ni­za­tion. Because some­times, those out­side of a firm’s day-to-day oper­a­tions are best equipped to point out where it is com­ing up short. And yes, as uncom­fort­able as it may be to receive, neg­a­tive feed­back should be espe­cial­ly welcomed. 

Banks describes the com­put­er tech giant Ora­cle as a com­pa­ny that has found a high­ly effec­tive way to solic­it out­side crit­i­cism. The com­pa­ny con­ducts strate­gic part­ner sum­mits where it brings togeth­er its most impor­tant clients, shares where it is head­ed as an orga­ni­za­tion, and asks how it can bet­ter meet cus­tomer needs. 

In con­cert with an activ­i­ty like that, you can query those part­ners about how they believe your actions align with stat­ed inten­tions,” he says. You can active­ly solic­it them and say, hey, as part of any deal we do, we would invite you to pro­vide us feed­back regard­ing what you observed as the deal unfold­ed. How did our peo­ple behave?’ Most folks will be hap­py to give you infor­ma­tion. The big thing is to be proac­tive as opposed to reac­tive, to engage them in rou­tine dia­logue and then thank them for their will­ing­ness to share those thoughts and to encour­age them to con­tin­ue to do so along the way.” 

While most com­pa­nies under­stand that their cul­ture mat­ters, many of them do not rou­tine­ly exam­ine whether the cul­ture they have is the cul­ture they want, or what steps they should take to keep prin­ci­ples and actions aligned. Get­ting your company’s cul­ture to tru­ly reflect the things you say you want to embody requires dai­ly atten­tion, says Banks. 

Featured Faculty

Bernard Banks

Associate Dean for Leadership Development; Clinical Professor of Management

About the Writer

Marc Zarefsky is a freelance writer based in Evanston, Illinois.

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