You have been asked to attend a values presentation or workshop after a significant change, merger of acquisition at your firm. You yawn through the core values presentation – a subject that management has spent months, if not years, discussing. Values like trust and integrity are pinned on the wall to remind you how to operate, but you walk away clueless as to how they relate to the business, let alone your job. ‘What a waste of a day,’ you conclude.

So many of us can relate to such a scenario. It often results from organisations creating values in the absence of organisational context. In other words, they are the product of lots of people having discussed what they consider important in isolation to the reality of what happens on a day-to-day basis.  In some cases, they even contradict much harder measures of performance. I recall an organisation emphasising how much ‘they value teamwork’, yet the remuneration positively encouraged them not to work as a team.

Values-driven
Employers are all too aware that employees, like their customers and society at large, only want to be engaged with companies who share their values. “Organisational values are more important today than at any other time in history because the personal and societal contexts within which a business operates are changing. Who you are as an organisation and what you stand for is becoming just as important as what you sell,” says Nille Skalts, director of ACE, a European strategic partnership of change management consultancies. So you can effectively engage staff through values. But firms are missing a trick. They fail to realise that they will only engage them if employees understand the link between values and their day-to-day business, and if leadership is driving those values. In other words, if the organisation is values driven. According to a survey on values-driven organisations, carried out by ACE*, two-thirds of European organisations, like Ericcson, believe that being values driven is largely responsible for their success – above-average performance in all markets.

Companies have had values for years. What’s different now is that these values must be lived by leaders and employees alike, and communicated effectively to the outside world. Organisations are realising that values are integral to their success, and so now more than ever are going out of their way to ensure that not only do their values reflect corporate goals, but that all employees and leaders live them. For companies like Ericsson, being values driven makes them more customer oriented – and ultimately more successful (see box on ‘Secrets of the Successful’ below).  And yes, by that we mean more profitable.

Putting values into action
Simply having values, however, is not enough. Nor will posting up values on the wall in the hope that they’ll eventually sink in. What really matters is how they are lived in the organisation. In other words, how well leaders communicate the values, live them and lead by example – motivating other employees to live and breathe those values as part of day-to-day business.  Leadership makes the critical difference. I recently facilitated an event with over 100 individuals from a public sector organisation that was launching a new set of values after a difficult restructuring. We decided to do things differently from the past and bring the values to life in a really practical way, which related to the jobs individuals do on a day-to-day basis.

For example, acting out dealing with a difficult customer situation in an exemplary manner. Many people in the room had experienced that type of challenge and watched as it was managed very effectively. 

As a result, more people left the workshop feeling positive about the organisation’s values because they knew what to do with them. When everyone is living and breathing the values it’s reflected externally through the customer service delivered by your employees – who are ultimately drivers of your values.  Through effective leadership, staff can be shown how to live those core values in daily activities, like the directors in the above example did. By doing this you stand a better chance of engaging staff.

Values support business strategy
ER Consultants strongly believe that values must underpin and support business strategy through all policies and processes. For example, having one set of values and a completely contrary set of competencies, which are used for assessing the suitability for individuals for promotion, is indicative of the two being produced in isolation. In many situations organisations would be better off only communicating the values through their application in processes. That way people know what is expected from them rather than being handed five words with definitions at the back of a team briefing. Integration with processes means that they are being used to measure, reinforce or reward something that is real. Pieces of paper with definitions, however, are just that.

And the rewards? By doing the above, you will not only attract and retain the best talent, but help tap into innovation, and ultimately, boost performance.  In short, you’ll gain that competitive edge for future success. Why not take the short test on the below to find out just how effective your values are.

For more information, contact:  paolo.moscuzza@erconsultants.co.uk

Reference:

*The Values-Driven Organisation Survey, Allied Consultants Europe (ACE), 2007

© er consultants Topics Issue 3, 2007

Are your values working for your organisation?

Here’s a simple way to find out whether your values work for you. Just ask yourself the following questions:

• Does your organisation have values?
• Do you know them?
• Do your employees?
• Can your customers feel or recognise them too?

If you are unable to answer one or more of these questions, then it’s time your organisation asked some soul searching questions. Unless you re-evaluate your approach to values, your organisation may be heading for trouble because it could mean the difference between being successful and profitable, or not.

Secrets of the Successful
So exactly how do you get employees to live and breathe the company’s values, and how much difference does it make to the company’s balance sheets?

Values are only successful if your employees are driving them
There is a difference between simply having and living values. That difference is reflected in an organisation’s performance. By making your employees ambassadors of values they’ll live and breathe them. There’s a direct link between success and customer and employee satisfaction.

In successful organisations customers perceive the values through the behaviour of employees.

Employees make the difference. Connecting individual drive and energy to the corporate soul = success. One CEO of a European telecom firm employing some 12,000-plus employees believes there’s a strong link between its values-driven culture and the performance of the company – especially in what is a declining market. “The company saw a +16% growth last year in revenue. And profit was up 13%. The only differentiating factor in the market is ‘employees’ and the way they support the organisation. So we must constantly be ‘walking the talk’ – and we have systems to measure compliance with the values. If you don’t live the core values – you’ll be taken in for a chat the first time round, but the second time you’re fired!” says the CEO.

Living values through leadership and management policies brings real success
In successful companies, values are a way of life and fully integrated in all aspects of management.  And leadership is the most significant success factor in making values work for your organisation.  “Ericsson has communicated our core values for many years, both internally and externally,” says Birgitta Hiller, HR Head Operations, Ericsson, Stockholm, Sweden. “These are: Professionalism, Respect and Perseverance. Ericsson has regularly worked to clarify its vision, mission and values ever since I joined the company 22 years ago. Recently, current CEO, Carl Henrik Svanberg initiated a programme to further define the culture needed to succeed in the telecom business. This programme came to be called, ‘Our Ways of Working’ policy which was launched in 2004.” She attributes the firm’s success to its work on values. But not only that, “the fact that CEO Carl Henrik Svanberg is the key driver of values, who motivates the employees to do the same, helps.”

Have external and internal values
Successful companies have both external values towards the customers and internal values towards the employees. In successful companies values are visible to the outside world. Focus on external values = more success. One European pharmaceutical company does a great job of this. “Making the external environment recognise our values is the key driver for future success. What matters most in our market are relations, and relations are characterised heavily by our culture, values and behaviour. Our partners judge how trustworthy, dedicated and collaboration oriented we are. We cannot win without our values. This calls for a further focus on communicating internally that values are not just a ‘HR thing’. Of course, we have to be ‘God company’, but we are not ashamed to say, that it is also about making money,” says the CEO of the Nordic region. Both the CEO and the HR Director believe that there is a clear relation between the values-driven approach and the performance of the company – and this relation will increase even further in the future.  “Performance in terms of pure financial indicators is excellent – our growth is +16% per annum on a market with an average growth rate of 5.4% and this is 4-5% higher than the forecast. The profit side is excellent too. We’re +10% over target.”

Source: The Values-Driven Organisation 2007 Survey, Allied Consultants Europe (ACE). For a full copy of the survey, send an email to: topics@erconsultants.co.uk. For more information on

ACE, log onto www.ace-europe.net

For more information, contact:

paolo.moscuzza@erconsultants.co.uk

© er consultants Topics Issue 3, 2007