Unleashing human potential for performance and profit

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Keynote speech at the EMCC conference in Athens in November 2013

Keynote speech at the EMCC conference in Athens in November 2013

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  • 1. UNLEASHING HUMAN POTENTIAL FOR PERFORMANCE AND PROFIT
  • 2. My Journey Update and new research 1998 2013 2006 2010 Learning Modules: Leading Self Leading a Team Leading an Organisation Leading in Society 2011 2012 www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 2
  • 3. www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 3
  • 4. Evolutionary Coaching 2012 Evolutionary Coaching A values-based approach to unleashing human potential 2013 2010 2014 www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 4
  • 5. What I am going to be talking about … MEASURING CULTURE  to improve performance MEASURING LEADERSHIP  to improve culture www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 5
  • 6. The Four Mantras of Culture Change  CULTURAL CAPITAL is the new frontier of competitive advantage.  THE CULTURE OF AN ORGANISATIONAL is a reflection of leadership consciousness—the stage of psychological development that the leaders have reached.  CULTURAL TRANSFORMATION begins with the personal transformation of the leaders. Organisations don’t transform; people do.  MEASUREMENT MATTERS: Whatever you measure (focus your attention on a regular basis ) tends to improve. www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 6
  • 7. The Leader and the Values Clarifying the value system and breathing life into it are the greatest contributions a leader can make. Peters and Waterman, “In Search of Excellence: Lessons from America’s best run companies”, 1983
  • 8. What are Values? A shorthand method of describing our individual and collective motivations and what is important to us. Values can be positive or potentially limiting. Positive Values: Trust, creativity, passion, honesty, integrity, clarity Potentially Limiting Values: Bureaucracy, power, blame, greed, hierarchy, statusseeking www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 8
  • 9. THE BIG QUESTION WHY ARE VALUES-DRIVEN ORGANISATIONS THE MOST SUCCESSFUL ORGANISATIONS ON THE PLANET? WHAT DO THEY FOCUS ON? WHAT MAKES THEM SUCCESSFUL? THEY CARE ABOUT THE NEEDS OF THEIR PEOPLE www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 9
  • 10. Q. WHERE CAN WE FIND SUCH ORGANISATIONS? A. THE BEST COMPANIES TO WORK FOR. www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 10
  • 11. The Top 40 Best Companies to Work For (USA) BCWF Average Annualized Return 16.39% S&P 500 Average Annualized Return 4.12% The Best Companies to Work For engender high levels of employee engagement and commitment, because the leaders of these organisations focus on meeting employee’s basic needs and satisfying their growth needs: they focus on helping their employees feel happy and fulfilled. www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 11
  • 12. The Top 40 Best Companies to Work For (USA) Adobe Systems Inc. Goldman Sachs Group Inc. Novo Nordisk, A/S ADR Adobe Systems Inc. Goldman Sachs Group Inc. Novo Nordisk, A/S ADR Aflac Inc. Google Inc. Class A. Nustar Energy, L.P. Amazon.com Inc. Hasbro, Inc. Publix Super Mkts, Inc. American Express Co. Intel Corp. Qualcomm Inc. Autodesk Inc. Intuit Inc. Rackspace Hosting Inc. Build-A-Bear Workshop Inc. Marriott International Inc. Salesforce.com Inc. Capital Trust Inc. Class A. Mattel Inc. Southern Michigan Bankcorp. Chesapeake Energy Corp. Medical Properties Trust Inc. St Jude Medical, Inc. Devon Energy Corp. Men’s Wearhouse Starbucks Corporation Dreamworks Animation SKG Microsoft Corp. Stryker Corporation Inc. National Instruments Corp. SVB Financial Group EOG Resources NetApp Inc. Ultimate Software Group, Inc. FactSet Research Systems Inc. Nordstrom Inc. Umpqua Holdings Corporation General Mills Inc. Whole Food Markets, Inc. www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 12
  • 13. Eighteen Firms of Endearment FOE Average Annualized Return Portfolio Value $560m 13.10% $420m S&P 500 Average Annualized Return $280m 4.12% $140m 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Firms of Endearment focus on meeting all stakeholders needs. The four pillars of FoE are Conscious Leadership, Conscious Culture, Stakeholder Integration and a Higher Purpose supported by Core Values. www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 13
  • 14. Eighteen Firms of Endearment *Amazon.com Inc. *Harley-Davidson Inc. Progressive Insurance *Best Buy Co Inc. *Honda Motor Co. REI BMW IDEO *Southwest Airlines Co. *CarMax Inc. IKEA *Starbucks Corporation *Caterpillar Inc. *Jet Blue *Timberland Inc. *Commerce Bankshares Inc. *Johnson & Johnson *Toyota Motor Corp. Container Store Jordan’s Furniture Trader Joe's *Costco Wholesale Corporation L.L. Bean *UPS Inc. *eBay Inc. New Balance Wegmans *Google Inc. Class A. Patagonia *Whole Foods Markets, Inc. * Firms of Endearment for which financial data were readily available for their North America operations. www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 14
  • 15. Conscious Capitalism Movement 2007 2012 www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 15
  • 16. The 10 Good to Great Companies (Jim Collins) $180m GtG Average Annualized Return Portfolio Value $140m 5.32% $100m S&P 500 Average Annualized Return $60m 4.12% 20m 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 The seven characteristics Collins identified in the so-called Good to Great companies, on their own, are not sufficient for long-term success. Focusing on the needs of your employees and the culture of the company are more important. www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 16
  • 17. The 10 Good to Great Companies Abbott Laboratories Kimberly-Clark Pitney Bowes Inc. Abbott Laboratories Kimberley-Clark Pitney Bowes Inc. *Circuit City Kroger Co. Walgreen Company **Fannie Mae Nucor Corp. ***Wells Fargo & Co. Gillette Company Philip Morris International Inc. * No longer trading. ** Involved in a home mortgage scandal. *** Received $25 billion bailout from the Troubled Asset Relief Program (TARP) as part of the United States government’s response to the subprime mortgage crisis of 2008. www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 17
  • 18. THE DIFFERENCE BETWEEN THE BEST COMPANIES TO WORK FOR AND OTHER COMPANIES IS THEY CARE ABOUT THE NEEDS OF THEIR EMPLOYEES– THEY CARE ABOUT WHAT THEIR EMPLOYEES VALUE. www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 18
  • 19. What motivates us is the satisfaction of our needs AT ANY GIVEN MOMENT IN TIME, the values that are most important to us are a reflection of the stage of psychological development we have reached and the unmet needs of the stages of psychological development we have passed through but haven not yet mastered. Our needs (what we value) have always been, and always will be the principal drivers of our behaviors and actions. www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 19
  • 20. Values, Needs and Motivations Therefore, if you know what your values are then you know what stage of psychological development you are operating from and what stages you have passed through where you still have unmet needs. These are the levels of consciousness you will be operating from. www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 20
  • 21. Stages of Psychological Development Serving: Fulfilling your destiny by caring for the well-being of humanity and/or the planet. Self-actualizing: Becoming more fully who you are by leading a values- and purpose-driven life. Individuating: Letting go of the aspects of your parental and cultural conditioning that no longer serve you. Differentiating: Distinguishing yourself from the crowd by honing your skills and talents. Conforming: Keeping safe and secure by staying loyal to your family, kin and culture. Surviving: Staying alive and healthy in the best possible conditions. Evolution of Personal Consciousness Integrating: Aligning with others who share the same values and purpose to create a better world. www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 21
  • 22. The Seven Levels of Consciousness Model
  • 23. Origins of the Cultural Transformation Tools Self Actualization Growth Needs Know and Understand Abraham Maslow Self-esteem Love & Belonging Safety Physiological When these needs are fulfilled they do not go away, they engender deeper levels of motivation and commitment. Deficiency Needs An individual gains no sense of lasting satisfaction from being able to meet these needs, but feels a sense of anxiety if these needs are not met.
  • 24. Maslow’s Needs to Barrett’s Consciousness Self-Actualization Know and Understand Abraham Maslow Richard Barrett Self-esteem Self-esteem Love & Belonging Love & Belonging Safety Safety Physiological Needs Consciousness
  • 25. Maslow’s Needs to Barrett’s Consciousness Service 1. Expansion of self-actualization Making adifference into multiple levels. Know and Understand Self-esteem Love & Belonging 2. Substitute ‘states of consciousness’ for hierarchy of needs. Internal Cohesion Transformation 3. Each state of consciousness is defined by specific values and behaviours. Self-esteem Safety Relationship Physiological Survival Needs Consciousness
  • 26. Stages in the Development of Personal Consciousness Positive Focus / Excessive Focus Service Making adifference Internal Cohesion Transformation Service to Humanity and the Planet Devoting your life in self-less service to your purpose and vision Collaborating with Partners Working with others to make a positive difference by actively implementing your purpose and vision Finding Personal Meaning Uncovering your sense of purpose and creating a vision for the future you want to create Personal Growth Understanding your deepest motivations, experiencing responsible freedom by letting go of your fears Self-esteem Self-worth Feeling a positive sense of pride in self and ability to manage your life. Power, status, … Relationship Belonging Feeling a personal sense of belonging, feeling loved by self and others. Being liked, blame, … Survival Financial Security & Safety Creating a safe secure environment for self and significant others. Control, greed , …
  • 27. Stages in the Development of Organizational Consciousness Positive Focus / Excessive Focus Service Service To Humanity And The Planet Social responsibility, future generations, long-term perspective, ethics, compassion, humility Making adifference Strategic Alliances and Partnerships Environmental awareness, community involvement, employee fulfillment, coaching/mentoring Internal Cohesion Transformation Building Corporate Community Shared values, vision, commitment, integrity, trust, passion, creativity, openness, transparency Continuous Renewal and Learning Accountability, adaptability, empowerment, teamwork, goals orientation, personal growth Self-esteem High Performance Systems, processes, quality, best practices, pride in performance. Bureaucracy, complacency, … Relationship Belonging Loyalty, open communication, customer satisfaction, friendship. Manipulation, blame, … Survival Financial Stability Shareholder value, organisational growth, employee health, safety. Control, corruption, greed, …
  • 28. Placement of Values by Level Current Culture 100 Employees Top Ten Values Service 1. tradition (L) (59) Making adifference 2. diversity (54) 6 Internal Cohesion Transformation Self-esteem 2 3. control (L) (53) 4 7 5 8 4. goals orientation (46) 5. knowledge (43) 6. creativity (42) 7. productivity (37) Relationship Survival 10 10 1 8. image (L) (36) 9 3 9. profit (36) 10. open communication (31)
  • 29. Distribution of Values by Level Current Culture 100 Employees Service 7 Making adifference 6 Internal Cohesion 5 Transformation 4 Self-esteem 3 Relationship 2 Survival 1 Cultural Entropy 11%
  • 30. What is Cultural Entropy? The amount of energy that is consumed in an organisation doing unnecessary or unproductive work that does not add value. It is a measure of the conflict, friction and frustration that employees encounter in their day-to-day activities that prevent the organisation from operating at peak performance. www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 30
  • 31. Entropy and Engagement 85% Cultural entropy significantly impacts employee engagement. Employee Engagement 75% 65% 55% 45% 35% Low Entropy = High Engagement 25% 0% 5% High Entropy = Low Engagement 10% 15% 20% 25% 30% Cultural Entropy Research carried out in 163 organisations in Australia by Hewitt Associates and the Barrett Values Centre in 2008. www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 31
  • 32. Entropy and Engagement Cultural Entropy Most employees are …. 10% or less Highly Engaged 11% to 20% Engaged 21% to 30% Becoming Disengaged 31% to 40% Disengaged 41% or more Highly Disengaged www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 32
  • 33. Five Levels of Employee Engagement Highly Engaged Employees bring passion, purpose and discretionary energy to their work. They are emotionally attached and committed to the organisation and want to do the right thing. Engaged Employees are willing to go the extra mile to support the company in achieving its goals and objectives as long as they can also satisfy their own goals and objectives. Becoming Disengaged Employees are becoming frustrated, anxious and fearful about not being able to satisfy their needs. Disengaged Employees do what they have to do to get through the day, but are unwilling to put in any extra effort to meet deadlines or support their colleagues in difficult times. Highly Disengaged Employees are unhappy at their work and act out their unhappiness by actively undermining the company, and denigrating those who want to succeed. www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 33
  • 34. Highly Engaged Employees     Highly engaged employees identify with the company. They care passionately about the future of the company. They bring passion and purpose to their work. They are willing to invest their discretionary effort to make the company a success.  They want the company to do the right thing.  They want to feel pride in the way the company behaves. www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 34
  • 35. Low Cultural Entropy Leads to High Financial Returns Entropy Level 3 Year Revenue Growth % <10% 32.87% 10% – 19% 24.90% 20% – 29% 11.39% >29% 11.07% Research carried out in 163 organisations in Australia by Hewitt Associates and the Barrett Values Centre in 2008. www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 35
  • 36. Cultural Entropy In Organisations Entropy Impact <10% Prime: Healthy Culture: This is a low and healthy level of cultural entropy. 11-20% Minor Issues: Minor issues: This level of cultural entropy reflects issues requiring cultural or structural adjustment. It is important to reduce the level of cultural entropy to improve performance. 21-30% Significant Issues: This level of cultural entropy reflects significant issues requiring cultural and structural transformation and leadership coaching. It is important to reduce the level of cultural entropy to improve performance. 31-40% Serious Issues: is level of entropy reflects serious problems requiring cultural and structural transformation, leadership development and coaching. It is important to reduce the level of entropy to improve performance. 41+ Critical Issues: This level of cultural entropy reflects critical problems requiring cultural and structural transformation, selective changes in leadership, leadership development and coaching. It is important to reduce the level of cultural entropy to improve performance .
  • 37. How Does Cultural Entropy Arise? Cultural entropy is a function of the personal entropy of the current leaders of an organisation and institutional legacy of past leaders as embedded in the structures, systems, policies and procedures. www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 37
  • 38. What is Personal Entropy? Personal entropy is the amount of fear-driven energy that a person expresses in his or her dayto-day interactions with other people. It is a measure of a lack of a person’s lack of personal mastery skills. Fear-driven energy arises from the conscious and subconscious fear-based beliefs of the ego about meeting its deficiency needs. www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 38
  • 39. Darth Vader Darth's Values Assessors' Top 11 Values Level 7 Level 6 Level 5 Level 4 Level 3 Level Matching 2 Values Level 1 PL = 10-0 | IRO (P) = 7-0-3 | IRO (L) = 0-0-0 PL = 7-4 | IRO (P) = 6-0-1 | IRO (L) = 0-4-0 Level 3 achievement Level 3 courage Level 4 authoritarian (L) Level 1 Level 5 being the best Level 3 excellence Level 3 competitive (L) Level 2 integrity Level 5 demanding (L) Level 2 long-term perspective Level 7 determination Level 4 passion Level 5 excellence Level 3 results orientation Level 3 knowledge Level 4 strategic alliances How Darth sees himself ambitious creativity Matches 2 Level 6 power (L) Level 3 vision Level 7 results orientation Level 3 risk-taking Level 4 Orange = Values match P = Positive L = Potentially Limiting (white circle) Leadership Values Plot How Others see Darth I = Individual R = Relationship O = organisational Copyright 2008 Barrett Values Centre August 2008
  • 40. Darth Vader Darth's Values 20% 7 C 7 10% 4 0% 5 30% 0% 6 10% 6 5 T Assessors' Values 0% 27% 4 30% 36% 3 3 2 0% 0% 2 0% 1 S 0% 0% 0% 1 0% 9% 0% 20% 40% 60% CTS = 60-10-30 Entropy = 0% C = Common Good T = Transformation S = Self-Interest Leadership Distribution Copyright 2008 Barrett Values Centre 9% 18% 0% 20% 40% 60% Level of Personal Entropy CTS = 0-27-73 Entropy = 36% Positive Values Potentially Limiting Values August 2008
  • 41. Cultural Evolution Begins with Personal Evolution Culture Values Leader’s Values CVA Current Culture LV A Feedback 14 Assessors PL= 1-10 | IROS (P)= 0-0-1-0 | IROS (L)= 2-4-4-0 PL = 1-9 | IRO (P) = 1-0-0 | IRO (L) = 1-8-0 Cultural Entropy 38% Personal Entropy 64% The culture of an organisation is a reflection of leadership consciousness. 1. short-term focus (L) 13 Level 1 power (L) 11 Level 3 2. blame (L) 11 Level 2 blame (L) 10 Level 2 3. manipulation (L) 10 Level 2 demanding (L) 10 Level 2 4. caution (L) 7 Level 1 manipulative (L) 10 Level 2 5. cynicism (L) 7 Level 3 experience 9 Level 3 6. bureaucracy (L) 6 Level 3 controlling (L) 8 Level 1 7. control (L) 6 Level 1 arrogant (L) 7 Level 3 8. cost reduction 5 Level 1 authoritarian (L) 6 Level 1 9. empire building (L) 5 Level 2 exploitative (L) 6 Level 1 10. image (L) 5 Level 3 ruthless (L) 6 Level 1 11. long hours (L) 5 Level 3
  • 42. Cultural Evolution Begins with Personal Evolution Culture Values CVA Current Culture The culture of an organisation is a reflection of leadership consciousness. Leader’s Values LVA Feedback 27 Assessors Internal Cohesion Internal Cohesion PL= 12-0 | IROS (P)= 4-2-5-1 | IROS (L)= 0-0-0-0 PL = 12-0 | IRO (P) = 9-1-2 | IRO (L) = 0-0-0 Cultural Entropy 7% Personal Entropy 9% 1. customer satisfaction 16 Level 2 continuous learning 11 Level 4 2. commitment 11 Level 5 generosity 11 Level 5 3. continuous learning 11 Level 4 commitment 10 Level 5 4. making a difference 11 Level 6 positive attitude 10 Level 5 5. global perspective 9 Level 3 vision 10 Level 7 6. mentoring 9 Level 6 ambitious 9 Level 3 7. enthusiasm 8 Level 5 making a difference 8 Level 6 8. leadership development 8 Level 6 results orientation 8 Level 3 9. integrity 7 Level 5 honesty 7 Level 5 10. open communication 7 Level 2 integrity 7 Level 5 11. optimism 7 Level 5 intuition 7 Level 6 12. shared values 7 Level 5 leadership developer 7 Level 6
  • 43. What Low Entropy Leaders Focus on … Values that address employees needs and create internal cohesion High Entropy Leaders (21%+) Low Entropy Leaders (0-6%) Internal Cohesion* Commitment * Positive attitude * Accessible Teamwork Trustworthy * Integrity * Accountability Customer satisfaction Enthusiasm * Fairness * SelfEsteem Commitment * Controlling (L) Ambitious Results orientation Demanding (L) Experience Goals orientation Authoritarian (L) Humor/fun * Power (L) Based on 3600 Leadership Values Feedback carried out on 100 leaders from 19 countries (2008-2010). www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 43
  • 44. Measuring Culture to Improve Performance
  • 45. What is Culture? “The way things are done around here” The culture of an organisation or any group of individuals is a reflection of the values, beliefs and behaviours of leaders of the group and the legacy of past leaders. www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 45
  • 46. How Do We Measure Culture? Cultural Values Assessment Question 1: Which of the following values/behaviours most represent who you are? Pick ten. Question 2: Which of the following values/behaviours most represent how your organisation currently operates? Pick ten. Question 3: Which of the following values/behaviours most represent how you would like your organisation to operate? Pick ten. www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 46
  • 47. Personal Values Pick ten values/behaviours that most reflect who you are, not who you desired to become.
  • 48. Current Culture Values Pick ten values/behaviours that most reflect how your organisation currently operates.
  • 49. Desired Culture Values Pick ten values/behaviours that, in your opinion, are essential for your organisation to achieve its highest performance.
  • 50. Company (1000) Level Personal Values (PV) Current Culture Values (CC) Desired Culture Values (DC) IRS (P)=8-2-0 IRS (L)=0-0-0 IROS (P)=1-2-6-0 IROS (L)=0-0-1-0 IROS (P)=0-3-7-0 IROS (L)=0-0-0-0 7 6 5 4 3 2 1 honesty 484 3(O) balance (home/work) 359 4(O) commitment 420 5(I) customer satisfaction 422 2(O) employee recognition 339 2(R) balance (home/work) 356 4(I) cost reduction (L) 354 1(O) customer satisfaction 329 2(O) accountability 324 4(R) achievement 305 transparency 281 5(R) 322 4(I) profit 286 1(O) leadership development 274 6(O) ethics 300 7(I) ethics 282 7(O) continuous improvement 272 4(O) adaptability 290 4(I) organisational growth 260 1(O) employee fulfilment 244 6(O) 284 5(R) continuous improvement 219 4(O) accountability 239 4(R) positive attitude 279 5(I) teamwork 218 4(R) ethics 238 7(O) ambition Cultural Entropy: Current Culture 19% brand image cooperation PV - CC 2 CC - DC 4 PV - DC 3 5(I) responsibility Matches 579 276 3(I) accountability 216 4(R) innovation 232 4(O) Black Underline = PV & CC Orange = PV, CC & DC Orange = CC & DC Blue = PV & DC Copyright 2013 Barrett Values Centre P = Positive L = Potentially Limiting (white circle) Values Plot 3(I) I = Individual R = Relationship O = Organisational S = Societal September 18, 2013
  • 51. Company (1000) Personal Values Current Culture Values Desired Culture Values 7 7 6 6 6 5% 6 5 4 4 4 3 1% 3 8% 3 1% 2 2 10% 2% 2 7% 4% 2 10% 1% 1 1 S 7 3 T 6% 5 5 C 7 1 5% 1% 1 8% 7% 1 4% 2% 30% 16% 20% 40% 60% CTS = 41-24-35 Cultural Entropy = 4% 60% CTS = 27-21-52 Cultural Entropy = 19% C = Common Good 15% 0% 20% 40% 60% CTS = 41-26-33 Cultural Entropy = 4% Positive Values T = Transformation Potentially Limiting Values S = Self-Interest Copyright 2013 Barrett Values Centre 40% 26% 4 18% 20% 21% 5 21% 0% 13% 6 11% 4 7% 7 9% 5 24% 0% 7% Values Distribution September 18, 2013
  • 52. Company (1000) Cultural Entropy Report This depicts the number of potentially limiting values per level in the Current Culture that were chosen by the survey participants. These represent all the potentially limiting values that were chosen and so may not be included in the top ten values on the Values Plot. Potentially limiting values are found only at levels 1, 2 and 3. This is a reflection of the degree of disorder within a system. Level Potentially Limiting Values (Votes) Cultural Entropy % 3 long hours (195) hierarchy (189) bureaucracy (145) confusion (113) power (56) information hoarding (27) silo mentality (26) 8% of total votes 2 favouritism (112) internal competition (100) manipulation (97) blame (70) empire building (58) 4% of total votes This level of cultural entropy reflects issues requiring cultural or structural adjustment. 1 cost reduction (354) job insecurity (95) control (88) short-term focus (66) caution (56) exploitation (54) 7% of total votes It is important to reduce the level of cultural entropy to improve performance. Total 1901 out of 9990 19% of total votes Copyright 2013 Barrett Values Centre Cultural Entropy Table September 18, 2013
  • 53. Company (1000) Values Jumps A value jump occurs when there are more votes for a value in the Desired Culture than in the Current Culture. Listed below are the values with the largest increase in votes. The values in bold are represented in the Desired Culture. Value Current Culture Votes Desired Culture Votes Jump employee recognition 74 339 265 transparency 68 281 213 156 359 203 51 244 193 123 274 151 76 196 120 100 215 115 clarity 60 174 114 fairness 25 117 92 141 232 91 balance (home/work) employee fulfilment leadership development creativity coaching/ mentoring innovation Copyright 2013 Barrett Values Centre Values Jumps Table September 18, 2013
  • 54. Company (1000) Current Culture cost reduction (L) Current Culture Values Finance profit organisational growth Finance Fitness Fitness achievement External Stakeholder Relations brand image External Stakeholder Relations Culture customer satisfaction customer satisfaction leadership development Trust/ Engagement Evolution Desired Culture Evolution Direction/ Communication continuous improvement continuous improvement innovation Supportive Environment Trust/ Engagement Culture Societal Contribution Desired Culture Values Supportive Environment Finance Fitness Direction/ Communication External Stakeholder Relations teamwork employee fulfilment accountability accountability ethics transparency ethics balance (home/work) employee recognition Societal Contribution Culture Trust/ Engagement Evolution Direction/ Communication Supportive Environment Societal Contribution Copyright 2013 Barrett Values Centre Business Needs Scorecard September 18, 2013
  • 55. Example of Cultural Evolution
  • 56. SA Bank: Current Culture Evolution 2005 1. cost-consciousness 2. profit 3. accountability 4. community involvement 5. client-driven 6. process-driven 7. bureaucracy (L) 8. results orientation 9. client satisfaction 10. silo mentality (L) 3 matches Entropy 25% 2006 1. cost-consciousness 2. accountability 3. client-driven 4. client satisfaction 5. results orientation 6. performance driven 7. profit 8. bureaucracy (L) 9. teamwork 10. community involvement 4 matches Entropy 19% 2007 1. client-driven 2. accountability 3. client satisfaction 4. cost-consciousness 5. community involvement 6. performance driven 7. profit 8. achievement 9. being the best 10. results orientation 4 matches Entropy 17% 2008 1. accountability 2. client-driven 3. client satisfaction 4. community involvement 5. achievement 6. cost-consciousness 7. teamwork 8. performance driven 9. being the best 10. delivery 5 matches Entropy 14%
  • 57. SA Bank: Current Culture Evolution 2009 2010 2011 1. accountability 2. client-driven 3. client satisfaction 4. cost-consciousness 5. community involvement 6. achievement 7. teamwork 8. employee recognition 9. being the best 10. performance driven 1. accountability 2. client-driven 3. client satisfaction 4. brand reputation 5. achievement 6. teamwork 7. environmental awareness 8. commitment 9. being the best 10. cost-consciousness 6 matches Entropy 14% 1. accountability 2. client satisfaction 3. client-driven 4. teamwork 5. brand reputation 6. being the best 7. achievement 8. commitment 9. community involvement 10. cost-consciousness 6 matches 6 matches Entropy 13% Entropy 13% Entropy 11%
  • 58. SA Bank: Group (2011) Personal Values Current Culture Values Desired Culture Values IRS (P)= 6-4-0 | IRS (L)= 0-0-0 IROS (P)= 2-2-5-1 | IROS (L)= 0-0-0-0 IROS (P)= 3-3-4-0 | IROS (L)= 0-0-0-0 Level 7 Level 6 Level 5 Level 4 Level 3 Level 2 Level 1 Health Index (PL) PV: 10-0 CC: 10-0 DC: 10-0 8576 4(R) 1. accountability 5464 4(R) 1. accountability 6987 4(R) 2. honesty 6133 5(I) 2. client-driven 4571 6(O) 2. balance (home/work) 4183 4(O) 3. commitment 5221 5(I) 3. client satisfaction 3486 2(O) 3. client-driven 3864 6(O) respect 4420 2(R) 4. brand reputation 2740 3(O) 4. client satisfaction 3742 2(O) 5. family 4057 2(R) 5. achievement 2491 3(I) 5. employee recognition 3297 2(R) 6. integrity 4023 5(I) 6. teamwork 2408 4(R) 6. honesty 3053 5(I) 7. caring 3568 2(R) 7. 2372 6(S) 7. commitment 2953 5(I) balance (home/work) 3526 4(I) environmental awareness 8. achievement 2809 3(I) 9. 2 6 4 accountability 8. PV - CC CC - DC PV - DC 1. 4. Matches responsibility 3279 4(I) 8. commitment 2263 5(I) 9. teamwork 2744 4(R) 3085 3(I) 9. being the best 2218 3(O) 10. 2687 2(O) 2187 3(O) 10. efficiency 10. Black Underline = PV & CC Orange = PV, CC & DC Values Plot Orange = CC & DC Blue = PV & DC cost-consciousness P = Positive L = Potentially Limiting (white circle) Copyright 2011 Barrett Values Centre employee satisfaction I = Individual R = Relationship O = Organizational S = Societal April 2011
  • 59. SA Bank: Group (2011) Personal Values 7% 7 C 26% 24% 4 5 13% 5 0% 2 1 5% 1% 1 0% 2 0% 1 5% 1% 5% 3% 3 40% CTS = 37-24-39 Entropy = 2% 5% 11% 0% 20% 40% CTS = 33-20-47 Entropy = 11% C = Common Good T = Transformation S = Self-Interest Values Distribution 3 3% 20% 25% 4 20% 2 0% 21% 20% 1% 16% 12% 6 4 16% 5% 7 14% 3 S Desired Culture Values 6 5 T 6% 7 4% 6 Current Culture Values Copyright 2011 Barrett Values Centre 16% 15% 0% 20% 40% CTS = 38-25-37 Entropy = 1% Positive Values Potentially Limiting Values April 2011
  • 60. Evolution of Survey Participants 90% 77% 80% 73% 75% 67% 70% 60% 51% 50% 38% 40% 30% 25% 20% 10% 8% Percentage of employees voluntarily participating in the values assessment grew significantly each year as people realized that the leaders of the organisation were not just paying attention to the results of the assessment, but were taking actions to reduce cultural entropy and increase the values and mission alignment every year. 0% 2005 2006 2007 2008 2009 2010 2011 2012 www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 60
  • 61. Cultural Entropy Evolution 30% Entropy reduced or stayed the same every year. Entropy reduction led to improved performance through increased employee engagement—increased revenues, productivity, share price, etc. 25% 25% 19% 20% 17% 14% 15% 13% 13% 11% 10% 10% Working toward entropy of 10% will result in healthy functioning of the organisation and improved staff morale. 5% 0% 2005 2006 2007 2008 2009 Cutlural Entropy 2010 2011 2012 Entropy risk bands 0 -10% 11-20% 21-30% 31-40% 41%+ Healthy functioning Some problems Significant problems Serious situation Critical situation www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 61
  • 62. Values Alignment and Mission Alignment Mission Alignment 8 7 7 6 6 6 5 5 5 4 4 4 3 4 3 2 2 1 0 1 1 1 2006 2007 2008 2 Values Alignment 1 2005 2 PV/CC Matches 2009 2010 2011 2012 CC/DC Matches www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 62
  • 63. Revenue Evolution Global Economic Meltdown 35000 30% 30000 25% 25000 20% 20000 15% 15000 10% 10000 5000 5% 0 Total revenue increases as cultural entropy falls. 0% 2005 2006 2007 Revenue 2008 2009 2010 2011 2012 Cultural Entropy www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 63
  • 64. Productivity Evolution 1200 Global Economic Meltdown 30% 1000 25% 800 20% 600 15% 400 10% 200 5% 0 0% 2005 2006 2007 2008 2009 2010 2011 2012 Revenue per Capita Cultural Entropy Revenue per capita increases as cultural entropy falls.
  • 65. Share Price Evolution Global Economic Meltdown 20000 30% 25% 15000 20% 10000 Share price (cents) increases as cultural entropy falls. 15% 10% 5000 5% 0 0% 2005 2006 2007 2008 2009 2010 2011 2012 Share Price Cutlural Entropy Low entropy organisations are extremely resilient.
  • 66. Implementing Culture Change
  • 67. The Culture Change Process PERFORMANCE ENTROPY 1. Culture/Risk Values Assessment 6. Implement changes and programmes 2. Share results and start dialogue 5. Create culture development plan 3. Prioritize values 4. Identify behaviours www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 67
  • 68. The Culture Change Process PERFORMANCE ENTROPY 1. Culture/Risk Values Assessment 6. Implement changes and programmes 2. Share results and start dialogue 5. Create culture development plan 3. Prioritize values 4. Identify behaviours www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 68
  • 69. The Culture Change Process PERFORMANCE ENTROPY 1. Culture/Risk Values Assessment 6. Implement changes and programmes 2. Share results and start dialogue 5. Create culture development plan 3. Prioritize values 4. Identify behaviours www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 69
  • 70. The Culture Change Process PERFORMANCE ENTROPY 1. Culture/Risk Values Assessment 6. Implement changes and programmes 2. Share results and start dialogue 5. Create culture development plan 3. Prioritize values 4. Identify behaviours www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 70
  • 71. The Culture Change Process PERFORMANCE ENTROPY 1. Culture/Risk Values Assessment 6. Implement changes and programmes 2. Share results and start dialogue 5. Create culture development plan 3. Prioritize values 4. Identify behaviours www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 71
  • 72. The Culture Change Process PERFORMANCE ENTROPY 1. Culture/Risk Values Assessment 6. Implement changes and programmes 2. Share results and start dialogue 5. Create culture development plan 3. Prioritize values 4. Identify behaviours www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 72
  • 73. The Culture Change Process PERFORMANCE ENTROPY 1. Culture/Risk Values Assessment 6. Implement changes and programmes 2. Share results and start dialogue 5. Create culture development plan 3. Prioritize values 4. Identify behaviours www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 73
  • 74. Create Culture Development Plan OVERARCHING GOALS 1. REDUCE CULTURAL ENTROPY OF ORGANISATION • System wide changes Employee engagement Employee recognition Employee fulfilment Structural alignment • Targeted changes Specific high entropy teams/units 2. REDUCE PERSONAL ENTROPY OF LEADERS • Leadership coaching and mentoring (specific leaders) Leadership values assessment Leadership development report • Leadership development programmes Leading self Leading a team Leading an organisation www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 74
  • 75. Leadership Development A Leadership Development Text Book for the 21st Century Part 1: Fundamentals Part 2: Leading Self Part 3: Leading Others Part 4: Leading an Organisation Part 5: Leading in Society www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 75
  • 76. TNLP Web Site A State-of-theArt, Customisable Multi-media, Web site www.newleadershipparadigm.com www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 76
  • 77. The Journals and Workbooks A Customisable Leadership Development Learning System Leading Self (43 Exercises) Leading a Team (28 Exercises) Leading an Organisation (33 Exercises) Leading in Society (30 Exercises) www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 77
  • 78. The Journals and Workbooks Leading Self Feedback Loops Feedback Loops Leading Others Leading an Organisation Leading in Society Begin with learning to lead yourself—personal mastery and personal alignment. Then learning to lead others. As you learn more about leading others, you continue to learn more about leading yourself. www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 78
  • 79. Four Conditions for Employee Engagement
  • 80. Four Quadrants of Human Organisations Interior Exterior Individual Character Personality Collective Culture Society www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 80
  • 81. Four Conditions for Employee Engagement Interior Exterior Character Personality Personal Alignment Employee Engagement Mission Alignment Values Alignment Individual Structural Alignment Collective Culture Society www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 81
  • 82. What engaged employees want to experience Interior Exterior Character Personality Values Alignment Individual Mission Alignment Culture Society Collective www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 82
  • 83. What leaders must do to create engagement Interior Exterior Character Personality Individual Personal Alignment Collective Structural Alignment Culture Society www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 83
  • 84. Personal Alignment Interior Character Individual Exterior Personality Personal Alignment In order to effectively lead others, leaders must first learn how to lead themselves. This involves personal mastery—overcoming the fears that make you ineffective as a leader, and personal alignment—becoming your authentic self and displaying high levels of integrity. www.valuescentre.com Powerful metrics that enable leaders to measure and manage cultures. 84