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Company Values & the Business Case
- 1. Company Values AND THEIR ROLE IN BUSINESS PERFORMANCE SCOTT RUDI PRINCIPAL, TURNUP, LLC
- 2. Intro - Scott Rudi, MS, SPHR, SC-P Previously with Shell Oil, Frito-Lay/PepsiCo, Wells Fargo, Mellon Financial Enthusiastic support for aligning cultures and fulfilling company missions Communication Strategies Defining Organizational Purpose Matching Business & People through organizational health
- 3. Values & Business Review the case for values and culture Discuss example value models Determine the connection between values and business performance Integrating values and culture
- 4. The Order of Things Vision Mission Strategy Structure People Values are the glue
- 5. Strategy seems pretty important Until you recognize “Culture Eats Strategy for Lunch” ~ Peter Drucker
- 6. Cultural Buzzword of the last 3 years ENGAGEMENT Why? Retention Ownership / Motivation Focus Results Culture / Values determine Level of Engagement
- 7. “We didn’t have formal core values” (early on) “because it was something I’d always thought of as a very corporate thing to do” Tony Hsieh CEO, Zappos.com, Inc. “But, it was the very thing we needed to do to scale and grow”
- 8. Study found* Values and the S&P 500 Innovation (80%) Integrity (70%) Respect (70%) Quality (60%) Teamwork (50%) * The Value of Corporate Culture; Guiso, Sapienza, & Zingales (2013)
- 9. Core Values Example Deliver WOW through service Embrace and drive change Create fun and a little weirdness Be adventurous, creative and open-minded Pursue growth and learning Build open and honest relationships with communication Build a positive team and family spirit Do more with less Be passionate and determined Be humble Zappos
- 10. Another Example We want to work with great people Technology innovation is our lifeblood Working here is fun Be actively involved Don’t take success for granted Do the right thing, don’t be evil Earn customer and user loyalty and respect every day Sustainable long-term growth and profitability are key to our success We care about and support the communities where we work and live We aspire to improve and change the world
- 11. Google
- 12. - The Value of Having Values - Intersect the business? Is there a correlation to performance of companies with a set of “advertised” values? *Study found Tobins q – a measure of company value was negatively correlated .02 correlation found with performance (net income) Only customer satisfaction was positively correlated Conclusion: Values on paper yields little value * The Value of Corporate Culture; Guiso, Sapienza, & Zingales (2013)
- 13. The Value of Living Values Intersect the Business? Two questions from the Great Places to Work Index Highest Scores were correlated to business results Performance factors affected and shown to improve at a 99% confidence interval Tobin’s q Profitability Reduction in represented workforce Conclusion – Living Values Yields Value
- 14. Stopping a “Paper on the Wall” values culture Reinforced & threaded into the fabric of company practice But How? Hire based on the values Assimilate all to the values Teach and correct according to the values Cite values throughout company communications Reward based on the values Align performance management to values Leader model the values ..
- 15. So it is said…. “Your beliefs become your thoughts, Your thoughts become your words, Your words become your actions, Your actions become your habits, Your habits become your values, Your values become your destiny.” ― Mahatma Gandhi
- 16. Thoughts?
- 17. Questions or Assistance Scott Rudi scott@turnupllc.com 319.325.1025
Editor's Notes
- Now – I’ll say values are cultures in many ways What are the true values (not the ones on the wall)
- When do you set your values (always) = they are the glue and when used throughout – they are the culture. Really; Culture = Values being lived – culture is “a set of norms and values that are widely shared and strongly held throughout the organization” (oreilly & chatman – 96)
- Really; Culture = Values being lived – culture is “a set of norms and values that are widely shared and strongly held throughout the organization” (oreilly & chatman – 96) Who doesn’t agree with Drucker here?
- Engagement – buzz word – real word Why does it matter? C/V = Engagement; But how many believe this? How many really live the values or is it another set of values lived? What do CEO’s think – well many may think this way – (change to next slide)
- the very thing we needed to scale and grow Why would he say that? – paper on the wall! / many companies saying, not doing! 85% of the S&P 500 companies advertise values on their website. TRIVIA TIME – Values aren’t really all that different when it comes right down to it – there are a lot of similar ones used – Very Commonly – Let’s do an exercise – what do you think are the most common values used by companies in the S&P 500? Get a bunch up on the board – then show of hands the ones they think are most common (then reveal) Do an advertised values among s&p 500 survey (what are they and then ask for show of hands on who thinks it’s in the top three) So what does this mean – people value the same values pretty much. Does that make them paper on the wall, safe and “nice to say”? I think it can – but if these qualities are in evidence at a company – do they have a culture of trust and engagement?
- 85% of the S&P 500 companies advertise values on their website. TRIVIA TIME – Values aren’t really all that different when it comes right down to it – there are a lot of similar ones used – Very Commonly – Let’s do an exercise – what do you think are the most common values used by companies in the S&P 500? Get a bunch up on the board – then show of hands the ones they think are most common (then reveal) Do an advertised values among s&p 500 survey (what are they and then ask for show of hands on who thinks it’s in the top three) So what does this mean – people value the same values pretty much. Does that make them paper on the wall, safe and “nice to say”? I think it can – but if these qualities are in evidence at a company – do they have a culture of trust and engagement?
- Strengths / weaknesses?
- Lofty huh? So who is it?
- So – how many of the values do you remember from zappos and google? This is not a criticism – but a question
- DO COMPANIES WITH ADVERTISED VALUES DO BETTER THAN THOSE WITHOUT VALUES????? NO! IS THERE CONGRUITY – VALUES ON THE WALL = VALUES IN THE ENVIRONMENT OR DO THEY CONTRADICT - I HAD A PRESIDENT WHO ESPOUSED THROUGHOUT HIS MANAGEMENT TEAM THE DESIRE FOR “BRUTAL HONESTY” – SOUNDS LIKE A CULTURE OF CANDOR, RIGHT? BUT, WHAT IF THAT PRESIDENT CHOSE TO PUBLICLY DENIGRATE PEOPLE WHO HAD A DIFFERING OPINION? INCONGRUITY CREATES VALUES CONFUSION AND LACK OF ACTION. SO – CAN WE MEASURE THIS IN SOME WAY? WHETHER LEADERSHIP IS MODELING THE BEHAVIOR THEY STATE? IT’S NOT EASY BUT IT’S POSSIBLE
- OUR STUDY USED THE GREAT PLACES TO WORK SURVEY TO TRY TO SEE ABOUT WHAT HAPPENS IF COMPANIES LIVE THE VALUES REMEMBER HOW PREVALENT INTEGRITY WAS IN THE SURVEY OF VALUES? WELL THAT’S THE ONE THING THEY COULD COMPARE FOR A VALUE 400 COMPANIES REVIEWED (PUBLIC) The questions they used to determine if a company was living according to values – *Management’s actions match its words and *Management is honest and ethical in its business practices This was how they evaluated – not whether the company had stated values – but if the company demonstrated values one standard deviation increase in integrity is associated with a 0.19 standard deviation increase in Tobin’s Q, a 0.09 standard deviation increase in profitability, and a 0.24 standard deviation decline in the fraction of workers that are unionized Interesting to note that private companies significantly outscored public companies on the trust index – why?
- What are the reinforcing mechanisms? Groups of 3 consider the greatest ways/ the ways to assure Over communicate / Over 400 documents when I search my system for “core values” They include….. LEADER MODEL – OF ALL THE KEYS TO A VALUES BASED CULTURE NONE IS GREATER.
- And so goes engagement
- Like a copy of the presentation? Presentation on this or other HR Strategic topics?
- A FEW CRITICAL FACTORS FOR ENSURING VALUES ARE TANGIBLE TO PEOPLE