Tuesday 15 January 2013

Leading Through Values Instead of Performance Goals - guest post by Steven Howard

This is a guest post by Steven Howard one of the accredited mentors of my Enhancing Their Gifts System™

"A business that only makes money is a poor business."
Henry Ford

Without a doubt, this quote from Henry Ford is more true in today's world of Corporate Social Responsibility (CSR), multiple constituencies, more knowledgeable customers, and a highly mobile workforce than it was during the glorious Industrial Age of the 1900s.

Likewise, the management philosophies and tools of the 20th century are no longer as useful for leading a 21st century workforce.  In fact, many leader observers believe the pendulum has swung too far in the direction of the management ethos of "what gets measured gets done" and setting SMART goals.

While still valid practices, the core philosophy for business owners and leaders is best built  on the fundamental core values of transparency, excellence and caring for one another.  How these core values are expressed through action and behaviour differentiate one organisation from another.

The Supreme Court in the United States has pronounced that "companies are people" with the same First Amendment rights and protections as individuals.  While not every jurisdiction will go this far in granting organisations human qualities, the best business owners and leaders do see their organisations as living and evolving entities driven by shared values.

Each person on your team has their own inherent set of values.  It is an unwise business owner or leader who expects his or her employees to park their individual values at the door upon arrival at work each day.

The astute business owner or leader, on the other hand, coalesces his or her staff around a set of shared values that set the context for individual and collaborative behaviour.

Motorola Solutions is one such entity, with a clearly defined set of shared various:

We are innovative
We are passionate
We are driven
We are accountable
We are partners

These values not only drive the decision-making process and collaborative efforts within this global, multi-cultural organisation, they are also used as important criteria in the company's recruitment and talent development processes.

Values are the catalyst for behaviour.  Basing collective and individual action on value goals, rather than stated performance objectives, has three important benefits for the organisation:

1) it helps to avoid wrong actions that lead to devastating consequences,
2) it helps everyone address dilemmas where there is no obvious, clear black and white correct path to take, and
3) it helps employees respond to the sentiments of others when strongly held opposing views come into play.

A few years ago, the high powered leadership team at Enron were known as "the smartest guys in the room."  But their lack of values based performance led to the collapse and destruction of Enron, and carried the corpse of accounting firm Arthur Anderson with them.  It also led to prison sentences for several Enron executives.

Values set the context for behaviour.  By understanding the values your people bring to the table, and then aligning these with the vital values of the organisation, you create teams of people more able to collaborate and work together to produce the results desired.

Great leaders know to monitor and measure the processes and behaviours producing results. They also know that when they modify behaviours that have slipped beyond the edges of the organisation's agreed and stated values, their people performance and results return to the desired path and destination.

Values based leadership is about sometimes taking the hardest path.  It is about seeing the company's purpose as more than just a profit producing machine.  It also means putting people and values before profits and short-term "shady" tactics designed to meet quarterly or yearly numbers.  As the great investor Warren Buffet said, "It takes 20 years to build a reputation and five minutes to ruin it."

Without a values-based leadership approach, your organisation's clock is permanently set at five minutes before disaster.

Likewise, a report a few years ago titled Reputation Assurance: The Value of A Good Name, from PriceWaterhouseCoopers, stated, "A single-minded focus that seeks only to satisfy shareholders may ultimately lead to crises and erosion of shareholder value."

When business owners and leaders actively demonstrate strong values, they are better able to:
  • create meaningful relationships with stakeholders to drive high performance as they build and develop internal talent, and
  • inspire and energise their employees and peers, by demonstrating what is expected of the team, and then simultaneously building and developing internal talent.
Dov Seidman, author of HOW: Why HOW We Do Anything Means Everything…in Business (and in Life) believes there is a link between enlightened corporate behaviour and performance.  He argues that the most successful businesses of the future will also be the most moral ones, not as a result of formal Corporate Social Responsibility (CSR) initiatives and programs, but what he labels sustainable values.

Unlike situational values, sustainable values are ones with sustaining human relationships built into their day-to-day practices and behaviours.  In Seidman's view, how an organisation is led, governed and operates is equally as important in its future success as the products and services it produces.

In fact, values are such an important item on the leadership agenda that astute leaders are now actively seeking new systems and methodologies for cascading critical values throughout their organizations.  This is one area where smaller and medium sized businesses will have an advantage over monolithic, huge enterprises as it is much easier to cultivate consistent values-based behaviours across a workforce of 200 than 20,000.

This is one key reason the Enhancing Their Gifts System™ was created, to enable leaders to drive performance improvements through sustainable values built into day-to-day operations and practices.

Once this easy-to-implement system is in place, organisations not only start living the desired values of its leaders and staff, but recruiting mistakes are minimised as future hiring decisions incorporate a shared values element.

Values are also very important to employees. In fact, the most recent PWC Annual Global CEO survey reports that 59% of workers say they will seek employers whose corporate responsibility behaviour matches their own values.  This was higher than the 52% who said they are attracted to employers offering opportunities for progression.

Numerous other studies have shown the importance of values and good corporate citizenship to consumers.  For example, in the 2011 Cone/Echo Global CR Opportunity Study, consumers worldwide want a higher level of corporate social responsibility, especially from those with which they engage with or purchase from.  Over 10,000 consumers in 10 major countries were surveyed, with 94% saying companies must analyze and evolve their business practices to make their impact as positive as possible.  93% also agreed that companies must go beyond their legal compliance to operate responsibly.

Values are important to employees. Values are important to consumers. Values are important to society.

It is little wonder that incisive and wise business owners and leaders are now deliberately and purposely using shared values as one of the best levers for optimal people performance within their organizations.  As a result, they are creating great businesses that deliver significantly more than just money. Henry Ford would be proud.

Steven Howard can be contacted on +61 417 281 388.

Be the difference you want to see in the world.
Creator of The Enhancing Their Gifts System™ - the simple framework that profoundly unleashes employee talent.
Please register for the next demonstration clinic here. 

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