Never underestimate the power of corporate values
Paying lip service to your core beliefs can come back and bite you
The corporate world seems to have a love-hate relationship with values. While some point to such declarations as providing a moral compass to all that it does, others argue that they have no place in the business world. The latter will also likely profess that corporations only exist for the benefit of shareholders.
But what’s the long-range benefit of that? What about a business model built on quarter-to-quarter demands of investors speaks to the sustainability of the business? That is, its ability to survive and thrive through market cycles while balancing the needs of numerous stakeholders including customers, prospective customers, employees, community members and shareholders?
As part of a wider-angle view of the business, many companies develop a vision, a mission and a set of values by which it intends to operate. Unfortunately, the vision and mission are too often a collection of words carefully selected and manicured to reflect lofty sentiments but are too vague to be meaningful.
Corporate values, on the other hand, can be reflected in everything the company does—from its core business practices to leadership decisions at the highest levels. Yes, these can be beautifully crafted statements of sweet nothings, but when well thought-out, applied liberally and understood by all, they can serve as a check and balance on corporate behavior and culture.
And when the challenging times hit, such values may prove invaluable in underpinning the company’s broader purpose.
Hollow values, however, can be damaging
Consider Wells Fargo. Revelations that it opened thousands of accounts for unwitting customers in order to meet sales quotas have derailed what appeared to be one of the best performing large U.S. banks since the 2008 financial crisis. As a result, it’s been ordered to pay $185 million (to date) in fines, its CEO, John Stumpf, left the company and the ripple effects (and lawsuits) will likely continue for years.
Today, as it did before the lid blew off its dishonest practices, the company points to the following as its values:
- People (employees) as a competitive advantage
- What’s right for customers
- Diversity and inclusion
Curiously, what’s now missing from the corporate website is a document titled The Vision & Values of Wells Fargo. This guide, built around the concept of One Wells Fargo, included the following advice:
Every time we serve a customer, we should ask ourselves, “If I were the customer in this situation, how would this experience feel for me? Did the transaction feel simple and easy? Did my problem get resolved quickly? Did the team members I contacted first accept responsibility for making sure I got what I needed?” That’s what we mean by One Wells Fargo — imagining ourselves as the customer.
If we do what’s right for our team members, customers, and communities, then — and only then — we will earn sustained profits and have our shareholders see us as a great investment.
Consider where Wells Fargo would be sitting today if it had followed those values-driven guidelines.
Of course, Wells Fargo is not alone in having to contend with such disruption. Gaffes can happen at any company and any employee can stray from core principles. But when the entire enterprise is encouraged to dismiss such guiding principles, it will be challenging to regain customer trust, even as reforms are touted in the future.
Living your company’s values
As Wells Fargo has demonstrated, crafting some noble-sounding phrases, posting them on a website and pointing to them when convenient aren’t true values. Especially if top management flaunts the ideals.
Instead, a company’s core values are important to the way it does business and should support every decision and initiative. Ideally, they should be developed by a cross-section of employees who step back together and examine what defines the company beyond the bottom line.
Chris Moody, the Boulder-based vice president of data and enterprise solutions at Twitter, suggests that values can originate in the company’s existing vibe, or emotional state. Yet only elements that meet the following criteria can be considered as part of the company’s bedrock values:
- Is this aspect of the company important to our long-term success?
- Does this aspect need to be maintained forever and is it sustainable?
- Does this aspect apply to all areas of the company and to all employees?
- Will establishing this aspect help us make important decisions in the future?
Once a concept passes that litmus test, it should be communicated:
- In simple, clear language
- On a regular basis
- In both top-down and bottom-up discussions to ensure company-wide compliance
Some will contend that a set of values isn’t right for every company. So be it. But there are few other approaches that allow a company to make the jump from its purpose to its everyday activities more succinctly.