B2B - Strategy Tools - Part 16

Value Based Leadership

What is the role of corporate values in strategy formulation and implementation?

As I wrote in Part 2 (Strategy on-line: About this blog), values are according to Collins & Porras:"The organization's essential and enduring principles - a small set of general guiding principles: not to be confused with specific cultural or operating practices; not to be compromised for financial or short-term expediency."

In other words values describe how we do things whereas strategy as defined in Part 3 (Business Strategy - definition) describes what we do towards and with whom.

In 2004 Booz Allen Hamilton and the Aspen Institute conducted a global study of corporations in 30 countries and five regions. Senior executives of 365 companies were polled and it was found that 89% of companies had written corporate value statements.

(The Value of Corporate Values by Reggie Van Lee, Lisa Fabish and Nancy McGraw)

So what are the values that these companies include in their Corporate Values?

1. Ethical behavior/integrity (90%)
2. Commitment to customers (88%)
3. Commitment to employees (78%)
4. Teamwork and trust (76%)
5. Commitment to shareholders (69%)
6. Honesty/openness (69%)
7. Accountability (68%)
8. Social responsibility/corporate citizenship (65%)
9. Innovativeness/entrepreneurship (60%)
10. Drive to succeed (50%)
11. Environmental responsibility (46%)
12. Initiative (44%)
13. Commitment to delivery (41%)
14. Adaptability (31%)
    

But more companies are going well beyond simply displaying values statements: They are engaging in values-driven management improvement efforts. Among those efforts are training staff in values, appraising executives and staff on their adherence to values and hiring organizational experts to help address how values affect corporate performance.

Personally I believe that the value of Corporate Values lie not in listing as many "right" values as possible but in the identification and selection of the few key values that truly reflects the owners, top management and key employees basic business beliefs as well as fulfil basic customer needs.

Value goals should be set, included in the Key Performance Indicators (KPI's) and performance should be meassured and acted upon.

PETER SØRENSEN