Past the era of just ‘win the customer and beat the competition’
In his bestselling book In Search of Excellence: Lessons from America’s Best-Run Companies, based on a study of 43 companies in the US from a diverse array of business sectors, Thomas Peters states that virtually all firms with exceptional results have a set of shared corporate values that clearly set expected norms and behaviors for all employees. The company culture embodies and puts into action these corporate values. It determines how values manifest in daily interactions, decision-making processes, and workplace behaviors.
Look back on your careers — did all the successful companies you worked for have a strong set of Corporate Values?
In my case, I only fully grasped the importance and power of values and culture later in my career as a C-level executive searching for a solution to the challenge of leading large cross-functional teams. Like many others, earlier in my career I was part of a small team with values and acceptable behaviors set by my supervisor. We didn’t have corporate values that were posted on walls, much less formally cascaded by the organization or even spoken about. We came into work with a mindset of winning the customer and obliterating competition. We were a high performing team with a very clear, albeit unwritten, set of values. So where did the set of acceptable behaviors emerge from? As they always do, whether defined or not, they came from the top.
I reported to a department head who reported to a highly competitive, hardworking Chief Commercial Officer whose value was winning at all costs and putting work before any personal passion. Even if there were no clearly defined or cascaded corporate values, we were all hired, promoted, or fired based on our ability to deliver results, our tenacity, and commitment to the organization’s success above our own personal passions. It was definitely a corporate culture that was not for everyone — the one married person in our marketing team lasted three months because we all worked 12-to-16-hour days and there was no room for anything else but work, much less family time.
Were these values and culture critical for the business to thrive? They definitely helped us achieve our goals. It was 2002 and I was working in the telecommunications industry, which was growing at breakneck speeds. Only 19% of the Philippine population had cellphones then and every Filipino wanted one, so it was a daily race between two companies to be the first to put a cellphone in every Filipino’s hands.
Just like a brand for everyone is a brand for no one, a sign that a strong corporate culture exists is that it attracts a specific type of individual with values that allow their business to thrive. This means that the values are so specific that they would be averse to anyone with opposing values. A popular example of this is the movie Wolf of Wall Street. Stratton Oakmont, Inc., the company featured in the movie, had a very unique set of unwritten corporate values and culture. People were hired, promoted, and fired primarily based on whether or not they fit the culture of the business. Personally, I would not work for a company with a Stratton kind of culture, but whether we agree with it or not, this is a perfect example of a firm with a solid set of values that everyone implicitly understood.
My experience early in my career and the Stratton case show that even with unwritten values, companies can thrive. Why then should we write them down? Corporate values should be put into writing because they are a critical component of the strategy of the business. Therefore, corporate values should not only be written down, they should be well thought out and deliberated on by leadership just as intensely as any element of an organization’s strategy. If corporate values are not formally documented and cascaded, there is too much room for interpretation on what behaviors are expected from employees, leaving most companies with multiple sets of values across functions. This creates silos in the organization, increases challenges for cross-functional collaboration, and significantly impairs the ability of teams to work towards the common goals of the business.
As a C-level executive later in my career, I learned how to leverage corporate values to create a collaborative culture that focused on trust, tore down communications barriers, and harnessed the collective intelligence of the individuals on my team. They became the guiding principle of how talent was selected, and how each member of the team was expected to interact not just with each other but with potential employees, customers, partners, and vendors. They helped form a unified perception of the business in the community, also known as a unified brand. We have to remember that our customers, more often than not, live in the community our business interacts with. Nowadays, customers and, equally importantly, potential talent, partners, and vendors, choose businesses not just for the product they offer but for the values they embody.
An organization’s values, whether written or unwritten, are driven by the leader. However, this does not mean that the creation of corporate values rests on the leader alone. Strategy consultants with decades of work experience in multiple companies and who have known both winning and losing cultures can help leadership teams appreciate the impact of corporate values and facilitate sessions on value creation specific to their business. Every company’s set of values are unique as these need to be very specific to its business strategy and based on rigorous internal and external data, including but not limited to the state of the industry and the economic conditions the business is operating in.
How do we ensure that corporate values are lived throughout the organization? I can tell you from decades of experience that the CEO has to live them. Without this critical element, no corporate value or culture has a chance of spreading throughout the organization. Behaviors need to be defined to illustrate what each value specifically means.
As an example, at Acumen, one of the defined behaviors of our corporate value of “Teamwork and Collaboration” is that we are committed to treating our client’s business like ours, with the same concern and determination to see them succeed, and every member of Acumen supports each other to ensure we deliver on this commitment. When individuals do not exhibit this behavior, they need to be called out, not just by supervisors but by colleagues. In businesses that have a particularly strong sense of protecting their culture, subordinates are invited by supervisors to call them out when their behaviors are not aligned with corporate values. Further, corporate values should be part of performance evaluations and customer satisfaction surveys.
Defining, living up to, and sustaining corporate values are easier said than done, but not impossible. Leaders should not give up on properly leveraging this powerful and vital strategic driver, otherwise values become nothing more than beautiful words for a website and posters on corporate hallways.
Tom Valderrama is the client director at Acumen Strategy Consultants. He worked in the telecommunications industry in the Philippines and abroad for two decades, with the last 12 years in various C-level executive positions.