Recently when drafting a strategic plan for a national not-for-profit organisation I was asked what work I was planning to do on corporate values. I thought about it for a while – well a second or two – before replying: ‘Nothing, they are pointless at best, misleading at worst’.
A vision statement? Yes, I was up for brainstorming the ideal future envisaged by the organisation. Mission statement? Ditto: an organisation needs complete clarity about its raison d’etre. Strategic objectives? Vital for setting out the steps needed to pursue the mission and work towards the vision.
But values? They tell you nothing specific, distinctive or measurable about an organisation. Rather they tend to be generic, vague and bland. And because the same ones crop up again and again in company websites, annual reports and brochures, it is difficult to see how they differentiate one organisation from another.
The most common values
Here are the main culprits you see time and time again: integrity, respect, excellence, quality, safety, innovation, professionalism, customer focus, teamwork…
According to BusinessDictionary.com, corporate values are an expression of ‘the operating philosophies that guide an organisation’s internal conduct as well as its relationship with its customers, partners and shareholders’.
But to my mind they all fail what my friend and colleague Lloyd calls the ‘nonsense negative’ test, although he makes no claims to have invented the concept.
A statement fails this test if its negative would make complete nonsense. Would anyone, for example, espouse dishonesty, disrespect or mediocrity as values to aspire to? Would anyone champion unsafe practices or stagnation? Would anyone seek to put their customers last – or even second? Clearly not – which must render their opposites so self-evident as to be meaningless.
Values need to be evidenced
In order to be meaningful, a values statement would need to be supported by convincing evidence of how a company demonstrates its particular values in practice. If you purport to be ‘innovative’, for example, how does that manifest itself in relation to your R&D? If you lay claim to ‘integrity’, can you point to one or more occasions when you have sacrificed easy profit in pursuit of some kind of greater good?
But before your managers and staff can even begin to live out their corporate values, they need to be aware of what they are. And, dispiritingly, the evidence suggests that corporate values are not sufficiently embedded within the culture of organisations to make a difference to behaviour.
In a recent article in the Financial Times – http://on.ft.com/1QRUGcc – Lucy Kellaway collected lists of values from the websites of 24 well-known companies, then read out those lists to managers from those companies and invited them to identify their own.
Of the 24 managers tested, only five correctly identified their company’s values – in three cases because they had sat on the committees that had drafted them. The others picked the wrong values!
Do organisations with values perform better?
So could we do away with corporate values altogether? Would anything important be lost? Do value-laden organisations perform better than those that are value-free?
Such evidence as we have suggests the opposite. As a follow-up to Lucy Kellaway’s article, number-crunchers at the FT compared the price performance of 83 of Britain’s biggest companies that have publicly stated corporate values with 17 similarly-sized ‘values refuseniks’.
Over a period of 10 years, the refuseniks had outperformed the others in the FTSE 10 Index by some 70 per cent!
Maybe – just maybe – the time spent in focus groups choosing from menus of values could be better spent in ways that make a clearer contribution to organisational effectiveness.
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