The Importance of Values - Part 1 of 4

Corruption and fraud are prevalent. We badly need to understand values. 

Over recent years I have been fascinated by the examples of well respected institutions and organisations losing their reputations. False accounting, Ponzi schemes, patient neglect, phone hacking are just some of the many examples. We all know them. But whatever happened to their values?

More recently I have seen that in response organisations and their advisers have been working on the whole topic of risk and culture. I like the way they link risk to culture and the behaviours and values which are embedded in the daily interactions and decision making throughout the organisation. I am less convinced when they talk about managing and changing culture.

The vital notion of organisational values has been a fascination for me: how they develop; why they’re critical to organisational performance but why, despite our best efforts, they collapse. Just as irresistible for me are the cases of corporate fraud and the minds of those individuals who constructed the schemes. And what are we to make of those investigations which result in large fines being paid, but no individual is held responsible and no one admits to wrongdoing.

Have you ever been part of a process to develop values? Over the years a common approach which I experienced involved getting together a wide group of people (the board: top management; a selection of employees; customers) maybe with a consultant, and developing ideas through discussion, focus groups, surveys and in-depth interviews. Once the process was over, values were communicated internally, placed on the web site, posted in offices and receptions, and printed in company reports.

But have you had a sneaking suspicion that something is wrong with that process? I must have been through that process three or even four times and no matter how much effort is put in, values get ignored, accidents and even disasters happen.

Values are an example of the emergent, self-organising properties of complex, diverse, dynamic systems which are observed by human brains.

I have had the benefit of working with Peter Robertson. Those of you who know Peter have seen what he has achieved from researching these topics and how he has successfully applied his methodology to influencing organisational performance and corporate risk.

Peter’s definition of values may look pretty intangible and abstract at first. Values are an example of the emergent, self-organising properties of complex, diverse, dynamic systems which are observed by human brains.

I want to explain what this means in my experience and the implications for leadership. And, if the definition looks intangible, as it first did to me, then you’ll soon find that the subject isn’t abstract at all. It’s concrete, because values are based on real events.

In my experience values don’t work through words printed on coloured card or letterheads.  We live values and create them, nurture them and interfere with them through a process of many actions, interactions, and conversations not through writing them down. 

I have come to see that, by their nature, values can’t be created by top-down processes. Leaders create the conditions for values to emerge through their behaviour, not through a focus group. These conditions encourage the process by which values emerge throughout an organisation and are then observed and recognised as such by whoever cares or needs to look. 

I used to see values as important, but like many colleagues I did not realise how critical they are. Some business leaders I have worked for have even been cynical about the whole movement, viewing values and culture as ‘soft’ topics in a ‘hard’ world, preferring instead to collect ‘hard’ data from employee satisfaction audits. I am now convinced otherwise.  Understanding values is central to great leadership, strengthening employee loyalty, making change successful, and superior organisational performance. 

Creating values is difficult. Losing them is easy.

So for me putting risk culture at the heart of corporate governance is a vital step forward. And I am intrigued as to how these progressive organisations and their advisers propose to assess and monitor it. For me, and I hope for them, it won’t be about sending questionnaires to employees asking them what they feel and compiling some measure of satisfaction.

Great companies have strong values: failing companies don’t. Values are essential to organisations that are declining (a process which I believe is inevitable) since they provide a bridge to a reinvented future. 

Creating values is difficult.  Losing them is easy.
Have you noticed where organisations and institutions have lost their reputation you often see high stated values contradicted by behaviour?  And what is more it is not some criminal mind bringing this about. Are you curious how well-intentioned people appear out of the wreckage, clutching their cardboard boxes, bewildered at their part in causing these corporate catastrophes? Values don’t necessarily collapse because of ‘monsters’ but because of something more scientific. Although there are enough monsters about as well.

If you believe values and culture are intangible, soft topics in the harsh business world,  please think again. Risk culture could become a mainstream issue for leadership. If you are about to start a top down process to define your values, please think again.

My next post will explain how values are an emergent property; or if you prefer ‘why there are no straight lines in nature.’

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