Chapter 1: Corporate Values? They’re Not Working! A) What do we mean by values? It’s become commonplace for every organization to have a set of values that it displays as the emblem of its character. Enron had them. Worldcom had them. Even throughout “Chainsaw” Al Dunlop’s reign at Sunbeam there was a value in place that touted integrity and honesty. As these three cases illustrate, having values that are written in some public document is no predictor of what values are actually at work in the organization. If we look at values from a different standpoint, the quintessential breach of values, as perceived by the public, was the realization that Kathy Lee Gifford, Nike and others were producing goods using child or sweatshop labor abroad. Given the implicit messages of representatives and marketing material from all of those organizations, these revelations constituted a breach of the values believed to be held by the companies. While there is certainly a great deal to be said for and against the use of such means of production, there is nonetheless an important issue here—one that goes to the source of the meaning of values. What do values mean to us as people, as a society, and particularly, as businesses? We have to consider that there are a lot of different ways that values get articulated. They get written in value statements, spoken about or spoken through marketing statements, represented in graphical ways on websites and in print, highlighted through press releases that focus on certain kinds of activities, and even subtly implied through choices made in, for example, spokespeople, actors in commercials, and choices of philanthropic activity. . Any of these methods of expressing values we are considering to be equivalent to having a formal values statement. For example, Benetton delivers a clear message in support of diversity by using actors and models of every ethnicity, race, origin, age and so forth in its advertising. Is “diversity” on its values statement? It doesn’t matter. It is one of Benetton’s stated values. We are making that choice to distinguish a kind of conflict that is more and more widespread. That is, the conflict between the values a company says it has (through any of the methods above, or any others we’ve left out) and what it actually does operationally. So, where we talk about “stated values” we mean any of the ways that values may be stated, not necessarily a formal value statement. We also want to acknowledge two different kinds of values so as to address them in a way that is useful. The typical corporate value statement contains many of same things. For example, integrity, honesty, teamwork and customerdriven appear on many, many such statements. Thos are all characteristics that could be attributed to an individual or an organization, and individuals always have opportunities to
express those values in the normal course of life and of work. We will call those values “personbased” values. The driving question that probably arose for many Americans after the Enron scandal was something like “what kind of people were those executives?” “They have no integrity.” That is the kind of question we asked, and we asked it not just of Enron, but of every company. Furthermore, if a company is to truly avoid any of the corruption that we now know has been so pervasive in our recent economy, than the important thing to learn is how to help each and every person in an organization to understand how to act, and to understand how to live the values of that organization. If Enron (to a person) had been living its values, there would have been no bankruptcy nor any scandal. There is another category of values that we will be discussing. These contain characteristics that primarily can only exist at an organizational level—or are only of interest at that level. They are related to the standing of an organization in a community, in the world, as players in a geopolitical reality and as exemplars that touch literally everyone. Those values statements typically describe a role for the company as a collective member of a community, as a creator of a future legacy or as a citizen of the world. We will call these kind of values “Good Citizen” pledges. Whether such statements apply to the environment, the treatment of employees in foreign plants, the role of the company to provide philanthropic aid to the community or to lobby for human rights in its negotiations abroad, these are pledges that are often seen by various stakeholders as being paramount. Such pledges sometimes arise as a reaction to vocal opposition to certain practices from the community or some other protest, and the company chooses to take a stand to address the issue. But it is clear that there is conflict in the true implementation of these kind of values just as there is in the personbased values, like teamwork, respect or integrity. Similarly, these values get called into question when there is a seeming breach of them, such as happened when environmentalists vilified the canned tunafish industry for catching tuna using nets and so killing other sealife. In both cases, whether the CustomerDirected or the Good Citizen values, there is a stunning lack of systematic approaches to ensure the fulfillment of values statements. Until recently, there may not have been much apparent need for such methodology. But the decline in consumer confidence, the growing trend of shipping jobs to thirdworld countries and the attention by the SEC and other governing bodies to enforcing compliance with regulatory and professional standards, has brought about a real need for such a methodology. When All Signs say “Hypocrisy”: From the point of view of a customer, the existence of a company’s values statements may be meaningless. Just because a company advertises its values,
and places them on page 1 of the company brochure, there is no guarantee of any greater level of service, respect or workmanship. In fact, the only excellence it may guarantee is in marketing. In many cases, it’s not clear what other purpose these values lists have, other than to attempt to convince a customer or vendor of a certain ‘character’ that may or may not be evident from the actions of the company. It’s sort of like the snake oil salesman who says “trust me, I wouldn’t lie to you”—as though saying it’s so makes it so. The obvious failure of so many values list made us begin to question the motivation for inventing a list of values. It seems clear from the very public and recent failures that values as a device for guiding behavior have failed dismally in today’s corporate world. Furthermore, the now infamous lack of values at Enron and the rest has created in the public a welljustified sense of skepticism, nay cynicism, as to the credibility of any corporate communication, including values statements. Just think of all the corporate taglines, slogans and promises implying that various companies have real, deepseated values. There are tons of them. Even though the slogans are familiar, if pressed we can all find lots of examples of implicit promises made by companies that are broken on a regular basis. Recall the last customer service person you dealt with. Were you really their “number one concern”, or was something else their top priority, something that didn’t matter to you? Frankly, most corporate values have devolved into hot air. They have become a tool used to indoctrinate employees, give advertising agencies ideas for campaigns and hold up to stockholder meetings to create good will. Even when created with the best intentions, values statements rarely get translated into the powerful tools that they could be. Needless to say, there are many examples of organizations who do seem to express their values statements very well. We will allude to these frequently in the course of the book, using them as examples of ways that values can be present throughout an organization. But excellence is rarer than ordinary ness. So while there are a great many examples of such companies, for the vast majority of companies, while they may not be performing any glaringly unethical or contradictory activities, they also fall way short of having a truly valuesbased organization. a.
What usually happens to corporate values We didn’t have the opportunity to be flies on the wall at the creation meeting for the values of Enron or WorldCom. But we have been present in many meetings in corporations that claim to have “values.” What we see is consistent across almost every organization, with very few exceptions. The values lists live on posters, on
pocket cards, on plaques on the CEO’s desk and are recited at sales meetings and for annual reports. They are viewed as a source of pride and of selfcongratulatory trophies for a job well done. In that way, the values do not dictate action or limit behavior, but instead, become themselves a symbol of something that has already been accomplished. I recall once we were asked to talk to a Senior Vice President at a staffing company that was known to be having internal management problems, and whose stock prices were suffering. From the beginning of the meeting, the Vice President explained to us how great his company was. As we shared with him our results in assisting other companies to build strong internal cohesion, and to generate cultures that were strong enough to produce breakthrough results, he explained to us why he didn’t need any of that. From time to time, he would point to the plaque on his desk where the values of the company were written. It was clear that that plaque represented, for him, the fulfillment of the goal to have teamwork in the company. After all, right there on the plaque was written “Teamwork” in gold lettering as one of the emblematic values of the company. We had very little to add to his company because he was so good at avoiding the acknowledgement of any problem. Soon after that meeting, the company was featured in the Wall Street Journal. It had dissolved the division that our Vice President prospect had headed, and he had been laid off. The main problem cited was lack of internal communication. Clearly the value of teamwork was somehow displaced by some other priority, at least one part of which was a strong belief that displaying the value on a plaque was the same as having it.