5 Compelling Reasons To Scrap Your Corporate Values Today

June 4, 2019 Chris Pearse

1,090 views Jan 21, 2019, 02:19am

Chris Pearse Contributor I write about the realities and challenges of leadership.

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“Self-aware leaders that understand the dynamics of their own behaviour will shape the corporate culture, not values.”

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The Business Dictionary defines corporate values as:

The operating philosophies or principles that guide an organisation’s internal conduct as well as its relationship with its customers, partners, and shareholders. Core values are usually summarised in the mission statement or in the company’s statement of core values.

Implicit in this statement is the notion that a set of values emanating from the leadership team will cascade down through the organisation, conditioning all employee behaviour to conform with it.

Before we explore this idea, let’s take a look at some corporate value statements:

Lloyds Bank: Putting customers first; Keeping it simple; Making a difference together.

Procter & Gamble: Integrity; Leadership; Ownership; Passion for Winning; Trust.

IKEALeadership by example; Constant desire for renewal; Togetherness and enthusiasm; Cost-consciousness; Striving to meet reality; Humbleness and willpower; Daring to be different; Accept and delegate responsibility; Simplicity; Constantly being “on the way”.

So let’s take a look at some of these values in action:

Lloyds Banking Group accused of ‘gaming’ overdraft charges
Financial Times-13 Jan 2019
Lloyds Banking Group has been accused of “gaming the system” by making its overdrafts more expensive and complicated for most of its …

In addition to all the other well-publicised woes of this bank, it is now allegedly using complexity as a competitive advantage in direct contradiction of its stated value: Keeping It Simple.

In Michelle Malkin’s National Review article, she suggests that:

Gillette (a P&G brand) will now be remembered as the company that did itself in by sacrificing a massive consumer base at the altar of progressivism.

Under their Trust value, they state: We respect our P&G colleagues, customers and consumers, and treat them as we want to be treated. Of course we can point to their Integrity value as the basis for this ad campaign but that still leaves an unresolved incongruity.

8 Things Ikea Wants You To Forget About in the Huffington Post details some skeletons in IKEA’s flatpack closet which would blow most values statements out of the water. As luck or judgement would have it, their values are sufficiently nebulous (what exactly is striving to meet reality?) to escape this kind of scrutiny.

Now, if you hadn’t already noticed, demolishing values statements is rather like shooting fish in a barrel. It’s so easy, it’s not much fun. The purpose here is not to demonstrate the frailty and vulnerability of particular corporate values, and thus improve them,  so much as to make a case for erasing them from corporate literature altogether.

Why Values Can’t Work

The problem with any system of values is that they are inherently aspirational and are either contravened as a matter of course, or in the fullness of time. Even companies that achieve the high standards they set themselves are only setting themselves up for an eventual fall.

And as Sports Direct plc demonstrates, the erosion of reputation doesn’t always hit the bottom line, suggesting that society is still more interested in value than values.

Paradoxically, as enlightened leaders encourage their organisations to fail (albeit fast, and not repeatedly) a values failure is not generally seen in the same light as Travis Kalanick of Uber discovered. Though, arguably, in this example, the original values were quite successful.

Going back to the definition of values and the idea that values cascade down, this too is aspirational. What actually happens is that behaviour, quite independently of values, permeates from the organisational epicentre. Grant Freeland, In Forbes, demonstrates how culture – which is simply collective behaviour – gets conditioned at leadership level.

Of course usually everyone nods sagely when the values statement is announced – but not always as Patrick Lencioni describes in his HBR article:

The CEO began by proudly announcing the important role that a new set of corporate values—teamwork, quality, and innovation—would play at the firm. He then showed the assembly, including dozens of top executives from around the world, a slick video that illustrated each word with stock footage of world-class athletes, swelling music, and shots of employees waving awkwardly at the camera. The whole effort reeked of insincerity. When the CEO cheerfully asked audience members if they wanted to watch it again, he was met by a loud chorus of “No!” It was painfully clear that his credibility was shot.

But perhaps the biggest obstacle to values delivering any value at all lies in our humanity. We are inherently self-organising and self-referring beings. Of course our frames of reference for doing ‘the right thing’ don’t always agree, but the notion that defining corporate values will define individual behaviour is so asinine as to hopefully exclude from office any would-be leaders that believe it. If only…

In summary, here are 5 reasons for scrapping corporate values:

  1. They set the organisation up for a fall – they will be broken
  2. It is difficult to make values robust without making them nebulous
  3. They generally represent leadership aspiration, not corporate reality
  4. In practice it is behaviour that matters, not values
  5. People are self-referring and will not change their values like variables in an algorithm

And all that begs the question:

So if we scrap values, what do we use instead?

We need self-aware leaders that understand the dynamics of their own behaviour because it is this that will shape and condition the corporate culture. When leaders understand themselves, then, and only then, will they be able to live and propagate the behaviours that they truly aspire to.

I help leaders accelerate their development and impact through a deepened awareness of our inner dynamics – the belief systems and emotions that shape our leadership. Discover more here…

Chris Pearse

Chris Pearse Contributor

I am an Executive Coach to leaders across diverse sectors including FTSE100s and SMEs. I am also an Interim CEO.