By Richard Barrett
Issues In The Boardroom
There are five critical issues preoccupying the boardrooms of both large and small companies in all parts of the world:
• How do we build a resilient, sustainable company?
• How do we increase profits and shareholder value?
• How do we attract and keep talented people?
• How do we build brand loyalty?
• How do we ensure that ethics permeate the corporate culture?
The keys to success are to be found in building a high-performance, values-driven culture. In the private sector, the culture of the organisation is the principal source of its competitive advantage and brand differentiation. In the public sector, the culture of the institution is the principal source of its effectiveness in delivering high quality services.
Our experience at the Barrett Values Centre in mapping the values of more than 1000 private and public sector institutions over the past ten years allows us to state categorically that values-driven organisations are the most successful organisations on the planet.
However, the most successful organisations are those that are both values-driven and vision-guided. When the values of an organisation are in alignment with the values of employees, then high levels of engagement and commitment are unleashed. This leads to more innovation, creativity, and accountability, as well as greater levels of trust, adaptability, and productivity. However, when in addition to values alignment, there is also a sense of mission alignment — when employees find a sense of meaning by working to achieve the vision of the organisation – then the passions and energies of the employees are unleashed and they come to work, not to gain a sense of achievement, but to gain a sense of fulfilment.
Our research shows that there is a logical linkage between values, vision and performance in the corporate sector:
• Values and vision drive the corporate culture
• The corporate culture drives employee fulfilment
• Employee fulfilment drives customer satisfaction
• Customer satisfaction drives shareholder value
Why are values so important?
Values are deeply held principles or ideals that people hold or adhere to when making decisions. Individuals express their values though their personal behaviours. Organisations express their values through their cultural behaviours.
In Built to Last: Successful Habits of Visionary Companies Jim Collins and Jerry Porras show that companies that consistently focused on building strong values-driven cultures over a period of several decades outperformed companies that did not by a factor of six, and outperformed the general stock market by a factor of fifteen.
Culture and Leadership
The values that make up the culture of an organisation are either a reflection of the underlying beliefs of the current leaders—particularly the chief executive—or they are the reflection of the heritage of past leaders. Most organisations operate with ‘default’ cultures. Because no one is measuring or paying attention to the culture, the underlying values and beliefs of the leaders become ‘the way things are done around here.’ This is a default culture.
Low performance occurs when there is a lack of alignment between the values of the culture of the organisation and the personal values of employees. This can lead to low levels of staff engagement significantly impacting the financial performance of the organisation and its ability to deliver services of sustainable high quality.
High performance occurs when the values of the organisation are in alignment with the aspirational values of employees. This leads to high levels of staff engagement, and the pursuit of excellence regarding the quality of products and services.
There are two other major benefits to values alignment. First, when values are aligned, the culture of an organisation is able to attract and retain talented individuals. This gives organisations a significant commercial advantage, especially when talent is in short supply. Second, values alignment builds a strong brand. Brand values and company values are two sides of the same coin. The strongest external brands are always those with the strongest internal cultures.
Ultimately, therefore, whether we are talking about high performance, brand differentiation, or retaining talented individuals, the success of an organisation is directly related to the degree of alignment that exists between the underlying values of the leaders and the aspirational values of employees.
Long-term sustainable success is highly dependent on the culture that the leaders create. Significantly, the culture that leaders create is highly dependent on the behaviours of the leaders and their relationships to other leaders in the organisation, and on their relationships with their employees.
Organisational transformation begins with the personal transformation of the leaders.
Organisations don’t transform.
Leaders whose energies are wrapped up in status-seeking, empire-building and internal competition create toxic environments with little or no organisational cohesion. Leaders who share the same vision and values, who work for the common good and focus on internal community-building, create internal cohesion and values alignment.
As part of the Academy Community, organisations such as Barrett Values Centre provide expert , practical topics for MDs and CEOs. By inspiring the leaders of businesses to change their thinking and to help them formulate an individual plan for the future, leaders develop themselves and grow their companies. For more information visit www.chiefexecutive.com