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4 Companies that Prove the Importance of Real, Living Core Values


Posted by Irvine, Derek at Wednesday, 07/11/2012 12:43 pm
 
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Recognize This! – Stated core values are pointless if they are different from tolerated values.

How important are core values in an organization? An article in yesterday’s Financial Times makes this quite clear:

Quotation“The last fortnight may have been the most damaging period ever for the reputation of large British businesses. GlaxoSmithKline, the pharmaceutical group, was fined $3bn for abusive practices in marketing drugs in the US. Royal Bank of Scotland and its subsidiaries failed to process their customers’ transactions. Both companies must have been relieved that Bob Diamond and Barclays successfully dominated the headlines. And these events follow BP’s disaster in 2010. … All four companies made decisions that benefited them in the short term but came back to haunt them. And yet to describe the problem as short-termism, though true, is not to get quite to the heart of the problem…

“That points to the real issue at GSK, RBS, Barclays and BP. We are not interested in whether these companies made good or bad calculations. We are interested in what these incidents tell us about the values of the companies concerned. We need to be able to trust pharmaceutical companies. We expect banks to be run and populated by honest people, to keep our money safe, and to give us our money back when we need it. We want oil companies to have a strong culture of engineering professionalism and commitment to health and safety.

“If we are ever to have confidence in these companies, we want them to pursue these objectives, not because they are good policy, but because such goals are integral to the companies’ identity. Otherwise their literal or figurative licences to operate will be in jeopardy. The common mistake of all these businesses was to raise doubts about their values in the instrumental search for earnings.”

This is an excellent example of a point I’ve made before. Does your organization have an entirely different set of tolerated values vs. the stated values on your website or hanging on a plaque in your reception area?

It matters little what you say your values are if you tolerate an entirely different set of behaviors and values in the daily work and decision making of employees at any level. That’s why it’s critical to make your stated values real and actionable.

That means when people violate those values, actions – up to and including firing – are taken. Equally, when people demonstrate behaviors in line with those values, they are consistently recognized and rewarded for doing so. This makes the values real, living and true guiding factors in the culture and daily decision making in your organization.

Which values does your organization live by – stated or tolerated? Or are they one and the same?


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