Stating corporate principles is great; embodying them is better.
Few companies set out to be corrupt, or knowingly employ unprincipled people. And none want their employees’ actions splashed across newspapers, going viral for all the wrong reasons. So how can it be that—in an age of organizational values statements and corporate social responsibility—fraudulent or otherwise unethical behavior continues to persist?
It turns out that getting people across the organization to actually adopt a company’s value system can be easier said than done.
“Organizations do a great job of coming up with their philosophies and principles,” Banks says. “But it is often harder to see how they live up to those values on a day-to-day basis.”
Bernie Banks, a clinical professor of management and associate dean for leadership development at the Kellogg School—as well as a retired U.S. Army brigadier general—describes four key steps leaders can take to ensure that their organizations walk the talk.
Articulate Your Organization’s Values
Visit the website of any company and you are likely to find a written expression of the company’s values. These guiding values—from employee safety to environmental sustainability to community betterment—tend to be clear, uncontroversial, and indisputably positive.
Yet employees at these organizations do not always behave accordingly.
Take BP’s 2010 Deepwater Horizon spill. Although one of BP’s stated values at the time was safety, the company’s management, employees, and contractors in fact engaged in a series of shortcuts that compromised safety, ultimately leading to eleven lost lives (not to mention 5 million barrels of spilled oil). A report from the Coast Guard and Bureau of Ocean Energy Management, Regulation, and Enforcement pinned the disaster on poor risk management, last-minute changes to plans, and insufficient training, among other factors.
“All the little things that transpired on a daily basis were not reflective of trying to take a safe and sound approach,” Banks says. “In isolation, each one of those little bitty things doesn’t matter, but then it ultimately aggregates and then boom, you have a blowup.”
Banks recommends a more explicit approach than simply assuming employees “get it” and have thoroughly internalized the company’s values. Leaders should routinely refer to these principles before, during, and after a project. How do those principles truly match up with the way the project is unfolding?
Measure Against Those Standards
But, of course, any effort to align values with actions needs teeth. Once a company has made a habit of articulating and reflecting on its principles, the next step is to develop a way to measure how well they are acted upon. Such measurement can be done as part of employees’ performance evaluations—so long as the exercise is taken seriously.
“Many performance-evaluation systems say they examine more than just the task itself,” Banks says, “but the reality is lots of organizations do not apply the same level of scrutiny to examining the ‘how’ as they do the ‘what.’”
IBM made headlines two years ago when it completely revamped its performance-review process. Gone was the traditional format that saw employees establish goals at the beginning of the year, have a mid-year review, and then receive an end-of-the-year rating. In its place came Checkpoint, an app-based review system that lets employees create short-term goals and receive managerial feedback at least once a quarter throughout the year.
“Many performance-evaluation systems say they examine more than just the task itself, but the reality is lots of organizations do not apply the same level of scrutiny to examining the ‘how’ as they do the ‘what.’”
Critically, rather than evaluate performance solely against established goals, Checkpoint was designed to offer a more holistic review process based on five distinct criteria: business results, impact on the firm’s success, innovation, skills, and personal responsibility to others.
“You and your employees need to examine how they are treating others,” Banks says. “When I was running organizations, I had individuals who were extremely competent, but I thought the manner in which they generated results sometimes was not consistent with our core values. I’ve had individuals who just eviscerated people as a technique for generating short-term outcomes, but that behavior is not going to engender long-term commitment.”
Call Out Behavior in Yourself and Others
But it is important for the alignment between values and action to go beyond individual performers.
Banks suggests that companies borrow from the U.S. Army, which routinely conducts what it calls “climate surveys”—assessments that examine just how well individual behavior in aggregate reflects the organization’s core values. Exactly how do values such as, say, teamwork or innovation actually manifest themselves? In the Army these surveys are annual, but organizations can conduct them as frequently as leadership finds helpful.
Key to these surveys’ success, Banks suggests, is finding thoughtful ways to share the results across the organization. “Instead of the results just being for the eyes of the titular leader, they become the basis for a conversation about not only what has transpired, but what we want to see transpire going forward,” he says.
Results can be disseminated via email, discussed in quarterly counseling sessions, or highlighted in employee recognition events—as long as when employees highlight issues, leadership is ready to bring the company’s decisions back into alignment with its rhetoric.
“People will only truly engage to the extent they believe that what they’re doing matters and that action will be taken as a result of it,” Banks says. “If you don’t follow up, if they don’t see that you actually refer to those things and incorporate them in a very intentional way in future decisions, then over time people will just become numb to it.”
Of course, holding up the behavior of your team for scrutiny will be less effective if you are not walking the walk on the organization’s values yourself.
When he was a young officer in the U.S. Army, Banks bought into the idea that soldiers were obligated to follow him regardless of how he acted toward them. But as he gained experience, he came to realize that while those soldiers understood his authority, leading meant both setting an example and encouraging others to act positively.
“There’s a misconception that in the military you just order people around,” Banks says. “But no matter what your title is, people don’t have to follow you. A great leader tries to get individuals to willingly open themselves up to your authority.”
Invite Outsiders to Critique the Company’s Actions
Strong organizations actively seek out feedback from anyone who comes into contact with that organization. Because sometimes, those outside of a firm’s day-to-day operations are best equipped to point out where it is coming up short. And yes, as uncomfortable as it may be to receive, negative feedback should be especially welcomed.
Banks describes the computer tech giant Oracle as a company that has found a highly effective way to solicit outside criticism. The company conducts strategic partner summits where it brings together its most important clients, shares where it is headed as an organization, and asks how it can better meet customer needs.
“In concert with an activity like that, you can query those partners about how they believe your actions align with stated intentions,” he says. “You can actively solicit them and say, ‘hey, as part of any deal we do, we would invite you to provide us feedback regarding what you observed as the deal unfolded. How did our people behave?’ Most folks will be happy to give you information. The big thing is to be proactive as opposed to reactive, to engage them in routine dialogue and then thank them for their willingness to share those thoughts and to encourage them to continue to do so along the way.”
While most companies understand that their culture matters, many of them do not routinely examine whether the culture they have is the culture they want, or what steps they should take to keep principles and actions aligned. Getting your company’s culture to truly reflect the things you say you want to embody requires daily attention, says Banks.
This article first appeared in insight.kellogg.northwestern.edu
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