Book: Make your Values Mean Something

Make Your Values Mean Something

Source: Harvard Business Review Reprint R0207J, July 2002, by Patrick M. Lencioni

Executive Summary:

This article argues that many corporate values statements are ineffective or even harmful because they are bland, insincere, and poorly implemented. Lencioni contends that strong values, when properly practiced, require commitment and can inflict pain. The article offers a framework for creating meaningful values statements by understanding different types of values, being aggressively authentic, owning the process (not delegating it to HR), and weaving core values into every aspect of the organization.

Key Themes and Ideas:

1. The Problem with Most Corporate Values:

• Many values statements are meaningless and can create cynicism, alienate customers, and undermine managerial credibility. The author uses Enron's values ("Communication. Respect. Integrity. Excellence.") as a prime example of values divorced from reality.
• "Empty values statements create cynical and dispirited employees, alienate customers, and undermine managerial credibility."
• The author attributes this problem to the post- "Built to Last" fad, where companies rushed to create values without genuine commitment.
• "Today, 80% of the Fortune 100 tout their values publicly - values that too often stand for nothing but a desire to be au courant or , worse still , politically correct."
• Cookie-cutter values like "integrity, teamwork, ethics, quality, customer satisfaction, and innovation" fail to differentiate companies.

1. Real Values Inflict Pain:

• Authentic values require commitment and can lead to difficult decisions. They can make some employees feel like outcasts, limit strategic freedom, and expose executives to criticism.
• "Indeed, an organization considering a values initiative must first come to terms with the fact that , when properly practiced, values inflict pain . They make some employees feel like outcasts. They limit an organization's strategic and operational freedom and constrain the behavior of its people . They leave executives open to heavy criticism for even minor violations."
• The author emphasizes, "If you're not willing to accept the pain real values incur, don't bother going to the trouble of formulating a values statement."

1. Four Types of Values:

• Core Values: Deeply ingrained principles that guide all actions. They are inherent, sacrosanct, and reflect the founders' values or the company's essence.
• "Core values are the deeply ingrained principles that guide all of a company's actions; they serve as its cultural cornerstones."
• Aspirational Values: Values a company needs to succeed in the future but currently lacks. These should be carefully managed to avoid diluting core values.
• Permission-to-Play Values: Minimum behavioral and social standards required of any employee (e.g., integrity). These don't differentiate a company.
• Accidental Values: Values that arise spontaneously without cultivation. They can be positive or negative, but need to be distinguished from core values.

1. Being Aggressively Authentic:

• Companies should avoid generic, motherhood-and-apple-pie values.
• Authentic values may even be controversial.
• The author gives the example of Siebel Systems with its value of professionalism standing in contrast to the Silicon Valley culture.
• "For a values statement to be authentic, it doesn't have to sound like it belongs on a Hallmark card. Indeed, some of the most values -driven companies adhere to tough , if not downright controversial, values ."
• Adhering to values can guide strategic decisions, as illustrated by Webcor Builders' acquisition based on its innovation value.

1. Owning the Process (Don't Hand It Off to HR):

• Values initiatives should not be consensus-driven.
• They're about imposing strategically sound beliefs, not building consensus.
• The best values efforts are driven by small teams including the CEO, founders, and key employees.
• "Values initiatives have nothing to do with building consensus-they're about imposing a set of fundamental, strategically sound beliefs on a broad group of people."
• The author mentions that a good values program should not be rushed, giving the pharmaceutical company example.

1. Weaving Core Values into Everything:

• Core values must be integrated into all employee-related processes, including hiring, performance management, promotions, rewards, and dismissal policies.
• Employees should be constantly reminded of core values.
• Comergent is given as an example, as values are used in screening during the interview process.
• The article also cites Siebel with its focus on customer satisfaction.
• The article emphasizes the importance of repeating values until they are believed, drawing parallels with companies such as Nordstrom and Wal-Mart.

Conclusion:

Lencioni's article is a call to action for leaders to take values seriously and to avoid the trap of creating superficial values statements that ultimately damage their organizations. By understanding the different types of values, committing to authenticity, driving the process from the top, and integrating values into every aspect of the company, leaders can create a culture that is truly values-driven and high-performing.

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