A business core values initiative that is done well affects all levels of an organization as well as all employees. In the months and years that follow, the level of interest and enthusiasm naturally fall off. This is when it is the role of leadership to keep the principles alive through constantly reminding the employees of what the mission is about, and how it is achieved. In the absence of engaged leadership, what happens to the values that are still hanging on the lobby wall?
There is much written about the negative effects of ignoring culture as an aspect of a healthy business. Virtually all writers on the subject drill down to the small decisions that are made every day, at all levels, and all over the organization. What is odd is that no one deals with examples of what those decisions could be, and then and ties the actions back to the fading or nonexistence of business values. Here is a set of three examples, followed by an explanation of the forces at work.
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Gary drives a forklift for a living. He feels like he used to really understand his company, but now he’s not so sure. Now layoffs feel like a real possibility, and Gary is not sure he now knows what the criteria will be.
A few years ago, after the big “core values” rollout, he felt like things were going in the right direction. For once, everyone seemed to be working the same plan. When he was doing a good job, his manager told him. If a new process was important, he knew why, and what his role was.
Now, no one talks to him or anyone else on the warehouse floor. The daily shift kick-off meetings are gone. He just shows up to work, does his job and goes home. Gary feels like something is going on, but no one in management is ever available to talk about it. He also knows that in the years since the rollout, his value to the company has somehow diminished, and this makes him afraid that he could lose his job to a layoff, in spite of his seniority and work record.
The union recruiters were in the parking lot again today, handing out t-shirts, and asking warehouse people to sign cards. Some of the younger guys signed them. Gary has been around long enough to know that union membership is something to think about, not trade a signature for a t-shirt. Nevertheless, he’s been considering signing a card. The union guys claim they can save his job, and that with a labor contract his seniority will mean something. Gary also knows that his worth to the company is not that he has been around so long as much as all the things he does right every day he is on the job. Still, no one has noticed his work in many months. Maybe belonging to a union is what is best for him and his family after all.
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Joe is a Sales Manager and he is feeling vulnerable. Sales are down this month, as they have been on his team for 3 of the last 6 months. He and his salespeople are struggling just to hit last year’s volume. He has seen some good managers let go for results like this.
Back after the values initiative sales were strong, and the salespeople were flying high. The merger last year brought a fair amount of confusion to the business though, and some brands left the company. What was supposed to bring a dynamic “synergy” of complimentary strengths had actually made the sales role more confusing, and competitors had taken advantage.
Joe’s new Division Sales Manager was not on board yet at the time of the core values rollout. In fact, Joe has the feeling that the new boss wouldn’t have had enough patience for the type of leadership that was developed at that time. The new boss is all about action with no excuses, so losing brands and having less to sell was a non-starter conversation.
At the demand of the new boss, Joe has been spending virtually all of his time working with his salespeople in the trade in order to help get orders up. At first, the sales team welcomed Joe’s assistance. Over a few weeks it became apparent that Joe was not going to go back to occasionally working with them … the new normal was that he was going to be with them often. Joe spent the most time in the territories where sales were down most.
Jenny was an experienced sales representative whose area was most affected by the lost brands. One day Jenny asked Joe, “Do you remember when you trusted me enough to be out here on my own without you shadowing me all the time?” Joe was taken aback. Joe said, “Trust has nothing to do with it … the boss says to help those whose sales are down the most, and that’s you.” Jenny turned in her notice the next day…the competition had been waiting for years for a chance to steal her away.
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Susan is CFO, and she has mixed feelings as to what to do next. The Chief Executive Officer wants the quarterly financial report on his desk in the morning. Susan just had an argument with the Controller over some general ledger adjustments that were made at the last minute.
At issue was nearly $100,000 in “other” income. This is the line on the income statement that is used to describe sales of non-product nature. This could include income from recycling, rebates, allowances from suppliers and so forth. It appeared to the Controller that one of the sales executives had turned in a credit for a supplier-funded sales training session that the Controller was quite sure never took place. The credit was already in the AR system, having been hand posted earlier that day. Citing the company’s mission statement and values, the Controller wanted to back out the credit from the income statement. It was already 6:00 PM, and only 14 hours before the financial summary was due. Anyone who knew about this particular line item had gone home for the day, and, the supplier credit in question was just enough added revenue to hit the profitability goal for the quarter.
What made matters worse is the entire executive group had a lot riding on this quarterly report. In the wake of suppliers leaving earlier in the year, no one in senior management had received their portion of the shared profitability bonus for the last 2 quarters. Visits from sales executives, the operations VP and others had been frequent in the past couple of days as they all wanted to know how the bonus looked. Susan herself had much to lose if this report did not show the company hitting its target because she also shared in the bonus.
If the controller was correct, and this was a fraudulent supplier credit, then it was more than an unethical attempt to pad sales in order to hit the targeted numbers. It also could jeopardize the company’s relationship with the supplier, and everyone knew that another supplier leaving would not be good news.
She thought about what to do. Susan had no personal knowledge that this credit was not valid. If it were problematic, she could back it out at the end of the next quarter. The supplier would understand the correction if one were needed, and everyone would be happy that the company hit it’s quarterly projection, and bonus checks would be cut tomorrow afternoon. Susan set the financial report on the CEO’s desk, and went home.
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Communication is the common denominator in the Value Void.
An issue can be a lack of information coming down to the employees, as was the main issue with Gary, the veteran warehouse worker. Absent the flow of communication Gary had been used to, he began to fear for his job. Whether this anxiety is warranted, ironically, does not matter. Gary is still evaluating what is going on around him, and making decisions based on those conclusions. All humans will attempt to “fill in the blanks” when information is not forthcoming, and the warehouse people were no different. His dilemma regarding whether to sign a card giving his support to union representation is a direct consequence of management failing to talk about what is going on, and failing to recognize great performers. The result to the company could be the necessity to negotiate with a union representing the warehouse workers, a condition that could cost millions over the next few years.
A second way that poor communication causes issues in the Value Void is when new comers are not initiated into the company properly, and with no reference point. This is what was causing much of Sales Manager Joe’s problems…his new boss had been brought into the firm without education in the company’s values and beliefs. Joe was told to get sales up by riding the sales people, and because Joe was also afraid for his job, he did it. The loss of Jenny, the veteran sales person, was unwanted turnover caused by a new manager entering the company without grounding in the company values. Turnover is a major indicator of issues in the company culture, especially when the most experienced employees begin to leave.
The final and potentially most deadly of the communication traps is sending mixed messages. Susan the CFO was definitely feeling the Values Void. She was pressured by the CEO to execute to an unreasonable deadline. Simultaneously, she felt the stress of politics weigh upon her because not only her own, but the other senior managers had their quarterly bonuses ridding on the outcome. Meanwhile, the Controller was doing her job in indentifying possibly fraudulent credits that could be a threat to the business. In the end, Susan did nothing, and let the financial report stand – not because she did not have her own doubts, but because of the mixed messages she was receiving. Integrity is an important value in virtually all companies, but when all the CFO is hearing is that the report is due, and the results had better look good, misrepresenting the profitability of the company gets very easy to do.
Symptoms of a Values Void:
- Lack of Communication
- Lack of Reference
- Mixed Messages
- Turnover
- Inconstancy
- Politics
- Deception
- Fear
- Uncertainty
- Distrust
- Cynicism
Once employees perceive that the organizations stated values have no meaning it is going to be long road getting back to where decisions are made based on them. The range of options available contain no easy to implement solution, yet it can be done. As a starting point, here is a partial list of strategies.
Begin at the top. It is time for soul searching. At some point in the past, it was an enormous effort to design and roll out the company values. Somewhere in the top leadership of the organization, apathy towards the initiative took hold. What was designed to last virtually forever did not. If the leadership does not have the courage to look at themselves first, then nothing is going to change.
Redesign. Going back and going though the process of selecting values and beliefs for the company a second time can yield results if done well. Taking the time to get people at all levels involved in the initiative will create interest and buy-in. Coming up with the same list of values that the organization collectively ignored may create more logical conflicts than enthusiasm. However, it is likely that there was nothing wrong with the values selected … just adherence to them was lacking.
Re-Roll Out. Reintroducing the same values can create renewed enthusiasm for the initiative. By getting the values out there in meetings, emails, posters, coffee mugs, you name it … awareness can be built-up again. Without consistency from all levels of management however, the message will once again fade to apathy. A re-roll out requires a level of humility in senior management. Someone from the top needs to admit that organization has strayed from its stated direction and way of being in order for a re-roll out to be effective. Absent this message, employees are very likely disbelieve the initiative is rooted in sincerity since the values were ignored in the past.
Build Supporting Company Values into Management Job Descriptions. Often this missing piece has lead to the ignoring of company values in the first place. When championing values-based decision making is part of each supervisor’s job then keeping core values alive can become much easier. A key element is make sure that this is included in all management performance evaluations. Judging management on how they have personally supported and lived the values during evaluations is key. When future advancement, raises in pay and so forth are tied in to supporting the company values then buy-in becomes second nature.
Realize that some managers will not “get it”. In every core values initiative, a supervisor somewhere in the company will ask, “This stuff is great, but how am I supposed to do this and my regular job?” The answer is simple … supporting core values is your job! In the final analysis, senior management has to be brave enough to acknowledge that some very good managers may not be qualified to lead the organization in this manner. Skilled supervisors who do not live the company values are simply not good enough. This is likely one of the factors that lead to the decay of adherence to the values to begin with.
Getting back on track after a company enters the Values Void is hard work. The common theme for what it takes to get the importance of values reimplemented is courage in senior management. Often, this is where the problem started. Therefore, humility and candid self-evaluation is what begins the recovery. Without this first step, the stated values of the company will remain just words hanging in the lobby.
Tags: Business Culture, Business Ethics, Communication, Core Values, Courage, Enthusiasm, Execution, Humility, Leadership, Mentoring, Organizational Learning, Performance Reviews, Sales Management, Turnover, Values, Values Void
