In October the Financial Review ran a Financial Times article which was extremely cynical about the real value of having values. It is extracted here:
The premise seemed to be;
- That most employees have no recall of actual company values, so what’s the point.
- That values are rarely distinctive but seem to follow a pattern of generic and bland concepts like integrity and respect and innovation.
- That company’s without specific values outperform companies with values by a significant margin.
As I was reading the article, I was thinking that boy, this person has not had a good experience with values! And yes, values can get lost and sidelined. When I first joined my previous employer, I was taught the values of the claims team, given reference points, and understood the behaviours that were required. I have to say it made my job easier, particularly as i could identify with and appreciate the value set. We were aspiring to provide great service and the values fitted neatly with that. Clear strategy and values can be like prescribing boundaries as a parent – how to act and how not to act. For more mature people it is a great way to promote autonomy within those boundaries. Some of the most successful sporting teams follow this simple philosophy, with emphasis on the behaviours required. Those behaviours are often branded as trademarks or ‘what we stand for’. They are, however, based on the values they want to promote.
So I left my previous job when the values were getting lost and the company was, in my view, losing its way. At that stage they had gone away from hiring people to values and were ‘skill acquiring’, so looking for expertise rather than cultural fit. Yes, there would have been very little knowledge or recall of company values at that time, but that was one of the reasons they were losing their way.
While I agree many value sets aren’t that distinctive, and as a result aren’t as engaging, that in itself isn’t a reason to say values don’t work. There are great examples of distinctive values at the forefront of great companies like Australian wonder IT Company Atlassian. Their vales include ‘open company, no BS’ and ‘don’t $#@! the customer’. They have values that engage like a corporate personality. Similar is Zappos in the States, with their ‘deliver wow through service’ and other distinctive values.
So, yes, some more work in bringing your values to life works better. Describing them in unique terms like ‘more with less’ certainly brings greater clarity. But even if you have a bland value like ‘honesty’ or ‘integrity’, isn’t it more about making them stick, rather than whether they are a poor descriptor? If integrity is critical to your business, and you are clear in the behaviours you are encouraging around integrity, and also have leaders who ensure their team members stick to those behaviours, then what’s the damage by having this as value? Not a lot of downside I would have thought.
As for the modelling that suggests companies without explicit values outperform companies with values, I find this baffling. I probably shouldn’t, as I once pinned an article on messy deskers on my old office in my previous workplace, which stated that companies with messy deskers outperformed all other companies on the Dow Jones by some ridiculous percentage. I believed that at the time without needing better corroboration, so I am as cynical about this statistical finding as the author is about values it seems.
And really the overall argument that companies without values perform better than companies who have people who don’t know the values seems a completely circular one. Surely they end up being the same thing? Aren’t they both operating without reference to values?
So our experience as a small business growing over more than 15 years is that our values have been more than valuable. They are at the more generic side of the equation, I admit (we are innovators and challengers). However when we were small it gave us personality and aspiration of how we wanted to be as a company. As we have grown it has been a great guiding light for behaviours and hiring decisions. And we have also been challenged to align purpose, values and strategy to ensure we stay focused, relevant and a great place to work. So our experience is that the right values with the right prescribed behaviours, pushed by leaders and embraced by the teams, can be extremely effective. Where values don’t work is where they are platitudes, pinned to the wall in the kitchen, shunned by managers and not aligned with purpose or strategy. However that doesn’t mean values aren’t valuable – it just says you need to work hard as leaders to ensure that a values set is executed effectively and over the long term.