Values are the how of a firm’s mission, the key to winning4 min read . Updated: 05 Oct 2009, 10:39 AM IST
Values are the how of a firm’s mission, the key to winning
Values are the how of a firm’s mission, the key to winning
While your company’s mission statement announces exactly where you are going, it’s the description of the company’s values that communicates the behaviours that will get you there.
Executives often overlook this step of the process, though their people should be using these values as marching orders; the values are the how of the mission, the means to the end—winning.
Developing the values that will support your mission requires the involvement of the entire organization and commitment from the executive team.
1. The process of creating values has to be iterative.
The executive team may come up with the first version, but such a document should be probed repeatedly by people all over the organization. And executives have to make sure people feel obligated to contribute.
While it can be a messy undertaking, getting wide participation ensures more insights and ideas, and most importantly, much more extensive buy-in.
2. The description must be specific.
When I first became CEO, I endorsed vague values at first, writing in GE’s 1981 annual report that its leaders should “live excellence" and “feel ownership."
These platitudes sounded good but didn’t describe real behaviours.
By 1991, we had made considerable progress, recruiting more than 5,000 employees to help develop our statement of values.
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The result included imperatives such as “Be intolerant of bureaucracy" and “See change for the growth opportunity it brings."
Still, we might have pushed the discussion about values and behaviours much further. In 2004, I watched Jamie Dimon and Bill Harrison (at the time, respectively, president of JPMorgan Chase and Co. and chairman and CEO of JPMorgan Chase: now Dimon is CEO and chairman; Harrison is retired) develop values and behaviours for the new company created by the merger of Bank One and JPMorgan Chase.
The document they started with came from Bank One, and it listed values and their corresponding behaviours with a level of detail I’d never seen before.
Take the value “We treat customers the way we would want to be treated." That’s pretty tangible, but Bank One then identified the 10 or 12 behaviours that made that value come to life, including:
• Never let profit centre conflicts get in the way of doing what is right for the customer.
• Give customers a good, fair deal. Great customer relationships take time. Do not try to maximize short-term profits at the expense of building those enduring relationships.
• Always look for ways to make it easier to do business with us.
3. To make values really mean something, companies have to reward employees who exhibit them and “punish" those who don’t.
Believe me, it will make winning easier.
At GE, every time we asked one of our high-performing managers to leave because he didn’t demonstrate the values —and we said as much publicly—the organization responded incredibly well. Since we were a company that increasingly lived its values, people were even more committed to living them too. And as our employee satisfaction results improved, so did our financial results.
4. For a company’s mission and values to truly work together as a winning proposition, they have to be mutually reinforcing. Though this seems obvious, it’s amazingly easy for that not to be the case.
In the most common scenario, a company’s mission and its values rupture due to the little crises of daily life in business. For instance, a competitor lowers prices so you do too, undermining your mission of competing on extreme customer service. The disconnection may sound minor, but when left unattended, they can really hurt a company—or even destroy a business. That’s how I see what happened at Enron.
Enron started as a pipeline and energy company focused on getting gas from point A to point B cheaply and quickly, a mission it accomplished well by having expertise in energy sourcing and distribution. Then the company changed missions and turned into a trading company with the goal of faster growth.
This shift in mission meant Enron focused first on trading energy and then on trading anything and everything. That change was probably exciting at the time, but no one stopped to figure out and broadcast what values and corresponding behaviours would support such a heady goal. The trading desk was the place to be, and the pipeline and energy generation businesses got shoved to the background.
Unfortunately, there were no processes to provide checks and balances for the well-heeled MBAs who had joined the company. And it was in that context—of no context— that Enron’s collapse occurred.
Thousands of innocent people lost their jobs because of that original disconnect between mission and values.
Your company won’t reach its full potential if a list of platitudes hanging on the lobby wall is all that’s guiding it. When you’re developing your statement of values, there will be long, contentious meetings when you’d rather go home, and email debates when you wish you could just go do real work. On days such as those, you might wish your values were vague and generic. They can’t be.
Take the time. Spend the energy. Make them real.
Write to Jack & Suzy
Jack and Suzy are eager to hear about your career dilemmas and challenges at work, and look forward to answering some of your questions in future columns. Jack and Suzy Welch are the authors of the international best-seller, Winning. Their latest book is Winning: The Answers: Confronting 74 of the Toughest Questions in Business Today. Mint readers can email them questions at email@example.com Please include your name, occupation and city. Only select questions will be answered.
©2009/BY NYT SYNDICATE
Adapted from Winning (HarperBusiness Publishers, 2005) by Jack Welch with Suzy Welch.)