Shared values.pdf

7/26/2019 Shared values.pdf

1/15

Chapter One

Basic Concepts

Shared values are fundamental principles and beliefs that inspire a group to

consistent and purposeful behavior, sustained despite changes inmembership and leadership of the group.

A communityneighborhood, team, or businessis an association ofindividuals who share a common purpose. To achieve their purpose,each member of the community must meet some mutual expectationsfor behavior: People expect neighbors to respect their property, carefor the environment, and demonstrate social responsibility; theyexpect teammates to be committed and supportive; they expectemployers to be fair and employees to be productive. Shared valuesare the principles that underly these mutual expectations and serve asthe touchstone for practical, day-to-day decisions and activities insupport of shared goals. They are the source of what General Electricchairman and CEO Jack Welch sees as "an affinity among people whowant to grapple with the outside world and win. Their personalvalues, dreams, and ambitions cause them to gravitate toward eachother ..."[1]

Implicitly or explicitly, our values influence every decision we makeas individuals and as communities. They are expressed in thealliances we seek, the people and achievements we celebrate, and thestories we tell. They are revealed by our responses to people andevents; sources of pride, satisfaction, and disappointment; by whatwe spend our time on and what we view as significant.

1


2/15

Part Two: About Shared ValuesChapter 1

The values of a business are expressed in product and service quality,environmental policies and practices, company publications andadvertisements, and office heroes and legends. Other indicators ofvalues in the workplace are the emotional climate (degree offormality or familiarity, openness, humor); management style(suggested by the presence or absence of such artifacts as time clocks,

bells, and reserved parking places); and the language used to describepositions and relationships. (At Disney theme parks, for example, allemployees are "members of the cast," who are "on stage" during theirworking hours. This captures significantly different values fromthose of the company that speaks of employees as "shifts" or "hands.")

Because values are so fundamental to our thoughts and actions, wetend to believe they are absolutes"the way normal people seethings." We may not readily accept that other individuals and groupshave equally compelling, but different, values. In fact, we are likelyto be suspicious and mistrustful of people whose behavior isinconsistent with our values, using our values as a reference for

interpreting their behavior and responding with hostility, as did thevarious organizations in pre-1991 IMS. Team members who operateat cross-purposes and neighbors who constantly bicker over the backfence are often operating by different sets of values. In thinkingabout values, it is important to distinguish between virtues(standards of moral excellence) and values (principles that motivatebehavior).

Personal Values and Shared Values

Personal values determine and support individual and socialpriorities such as life, liberty, and justice. Personal values arestrongly felt and highly emotional (for example, dignity, truth, and

honor). Our personal values are communicated and reinforced byparents, teachers, and peers; by formal publications about what is"right" behavior, and by the ceremonies, legends, and folklore of thecommunity. Personal values guide our behavior in allrelationshipswith families, communities, employers andemployees, and with society at large. They can be thought of asrelationship values, creating the environment in which we live andwork. Personal integrity demands constancy of relationship valuesacross all the dimensions of this environment, family, community,societal, professional, business, and other associations.

2


3/15

Basic Concepts

In addition to relationship values, a second order of values supportsthe unique goals and priorities of each of the many communities ofwhich we may be members. The medical professions, for example,highly value excellence, dedication, and selflessness; financialinstitutions value accuracy and accountability. In the workplace,particular goal-oriented valuescustomer focus, innovation,

teamworksupport specific business priorities, such as customersatisfaction, market leadership, or profitability. These second-ordershared values tend to be taskvalues, influencing how we get the jobdone. Task values generally have a rational and pragmatic appeal,although ideally they, too, engage the spirit and emotions. Safety, forexample, a shared value in the old Bell System, reflected a concern forpeople as well as a business need to minimize costs associated withjob injuries.

Task values are communicated and reinforced by the behavior ofleaders, the formal policies and practices of the business, and thecollective wisdom and tradition passed on in everyday conversation.

Task values do not necessarily carry over into all dimensions of ourlives, but we consciously and unconsciously seek alignment of valuesin relationships, memberships, and career choices. The stronger thealignment, the stronger our personal commitment and ability tobehave consistently with our values.

It was a perceived conflict of task values with fundamentalrelationship values that undermined IMSs early attempt at gainingcommitment to the original set of values. In focus groups, forexample, IMS people challenged the notion of "a passion for winning"as a justification for uncaring, manipulative behavior aimed at"winning at all costs."

Some companies make a point of acknowledging the distinctionbetween task and relationship values. General Electrics valuesstatement, for example, balances "business characteristics"lean,agile, creative, ownership, rewardwith "individualcharacteristics"reality, leadership, candor, simplicity, integrity,dignity.[1]

3


4/15


Values Are Not Rules

Both values and rules promote predictable and consistent behavioramong the members of a group, but values are not rules or laws.Rules govern primarily byprohibiting specific actions and behaviors.Compliance with a code of conduct, for example, is measured by the

absence of activity. Values influence us to make decisions and takeactions that are consistent with a particular standard of conduct,although they may vary considerably from one individual to another.Outside forces form and shape our values, but we decide how totranslate them into action. Values are, by definition, an expression ofchoice and self-control, whereas rules tend to control and constrainfreedom of choice.

Which is the more helpful way to provide travel information fromone point to another: a road map or a set of directions (15 miles on thefreeway; right at the exit ramp to the second stop light; left when youcross the bridge, etc.)? Directions free the traveler of any need tomake decisions; they may make it possible to predict time of arrivalwith a fair degree of accuracy. If the ramp is closed or the bridge isout, however, the traveler has no idea what to do. A road map offerschoices, though not necessarily the same ones you would make. Italso provides guidance for circumstances you may not anticipate.

We can think of shared values as a road map for the workenvironment, and of rules and regulations as a set of directions: Bothhelp an organization move from one place to another, but managingby values permits each traveler to discover the unique opportunitiespresent in the journey.

4


5/15

Basic Concepts

Why Are Strong Shared Values Important to the Business?

"The world of the American corporation has changed dramaticallysince 1960 and ...we are indeed in a transforming era," Rosabeth MossKanter concluded in The Change Masters.[2] The pace of change hasaccelerated even more since 1983, when Kanter identified increasing

diversity and the growing presence of women in the workforce,higher education levels, family lifestyles, and social andenvironmental awareness among the significant changes that havechallenged peoples fundamental working assumptions. Additionalchanges noted by Tom Donaldson include media influence oncustomer and employee expectations, the global evolution toward aless hierarchical workplace, a change in the focus of work activities(from delivery of products to delivery of information and services),and a revised social contract in industrialized societies: InDonaldsons view, economic, political, and social changes of thetwentieth century have redefined the very nature of the contractbetween business and society. No longer tolerant of risks to

employee, community, or environmental well being in the pursuit ofprofit, society today holds the corporation accountable to all itsconstituenciesemployees, customers, and community, as well asshareowners.[3]

These profound changes have affected the corporation in severalways:

They have thrust people into positions of responsibility forwhichin an earlier, more hierarchical erathey would haveserved lengthy apprenticeships. Lacking maturity and experienceand without strong values to guide them, they tend to makeexpedient decisions. Faulty o-rings, devastating oil spills, and

savings and loan failures are a few of the all-to-common examplesof the potentially disastrous consequences.

Family, community, and other social institutions traditionallyshaped and reinforced a commonly held set of values. As theinfluence of these institutions has been diluted, and as their valueshave tended to be less aligned, corporations can no longer assumegeneral commitment to a common set of core values.

Markets, economic realities, strategies, and goals have beenredefined. Old task values may have little relevance in the contextof these new markets. AT&T, for example, has traditionally

5


6/15


maintained high standards of individual excellence.* However, ina marketplace that grows ever more competitive, a higher prioritymust be given to the value of teamwork.

Shared Values Engage and Empower People

As AT&T and other institutions have discovered, a clear statement of

fundamental values and beliefs becomes doubly urgent in this climateof change. From the employees perspective, values help to establishthat

this is what it means to work for this company

this is what I can expect.

From the business perspective, a commitment to shared valuespromotes trust and fosters true empowerment. Employees whosubscribe to the values of the business are trusted to act in the bestinterests of the business because their choices and decisions and thoseof the business owners and senior managers are made in the same

spirit.A values-based approach to managing the business engages andempowers people in several ways:

The energy of the organization is directed into productive channelsand at the same time liberated to explore those channels creatively.

Innovation is encouraged, as well as the risk-taking that leads tobreakthroughs. Without shared values, people are inclined to clingto tried and true actions and safe behaviors to protect their jobs.

People are governed in exceptional situations by the sound,objective standards that guide their behavior in unexceptional

situations. Formed and framed in the context of the everydayexperience, shared values are especially powerful in moments ofcrisis, enabling people to respond to the crisis as an everydayoccurrence.

________________

* "The old Bell System was like a great football team with the best athletes and the best equipment. Every Saturdaymorning, wed run up and down the football field and win 100 to 0 because there was no one on the other side ofthe line of scrimmage; we were a monopoly. Being human, the football players found their competition inside theteam...Cross-departmental competition raised costs and prevented new initiatives."[4] (Ray Smith, Bell AtlanticCEO).

6


7/15

Basic Concepts

Because shared values have a life and meaning beyond any oneindividual, they represent stability and continuity in times ofchange and reorganization.

Finally, shared values create a business environment in whichpeople can focus more effectively on quality and business goals.Recall how feelings of distrust and internal competition preventedthe IMS leadership team from dealing with the real problems of thebusiness. How much easier it is to identify improvementopportunities and true root causes in an atmosphere of trust,cooperation, and caring, in a work environment where integrity,teamwork, and respect are strong and vital.

Values Support Quality and Business Goals

A total quality approach emphasizes empowered, fully involvedpeople working in teams, often across functional and operationalboundaries. These teams come together in the work environment, notas a voluntary union of kindred spirits, but as representatives of

operations and functions that support a larger process. Membershipmay be stable or temporary, or more likely a mix of the two. Sharedvalues play a critical role in enabling these teams to make decisionsrapidly and act in concert. Without a common base of values, teammembers can become locked in endless conflicts and power struggles,as did the IMS EQC in its early daysstalled and, as Osl observedthen, unable even to recognize, far less to resolve, their real problems.

Total Quality, like shared values, is aspirational, representing "thebest of what we strive to be." Through process management andstrong partnerships with customers and suppliers, AT&Ts TotalQuality Approach[5] provides the operational structure for continuous

improvement. Shared values constitute the inspirational system thatenables involvement, cooperation, and shared commitment to acommon vision and long- and short-term plansthe essentialelements of the Total Quality Approach.

Shared values help to determine quality and business goals, andinfluence how the goals are defined, deployed, and pursued. Forexample, AT&Ts Universal Card Services (UCS) business unitannounces its primary value in the Jacksonville headquarterslobby: "Customers are the center of our universe." From thisexplicit value

7


8/15


of commitment to customers, UCS derives long-term business goals(to be the benchmark for customer service) and short-term plansand programs (identify and develop new customer options; offercustomers a single point of contact).

Shared values foster the behavior that enables a business to achieve

quality and business goals. Results of a recent study of over 200leading companies suggest that relevant, appropriate values are akey factor, along with a strong and adaptive culture, in the successof leading performers.[6]

At UCS, human resource policies and practices train and rewardemployees for demonstrating commitment to customers.Individual efforts by UCS employees contribute to the success ofthe larger teamthe UCS business unitwhose devotion toattentive, cheerful, responsive customer service has rapidlyattracted a large and loyal customer base.

Shared values help to ensure successful business relationships. For

example, the outcome of hiring decisions, mergers, andnegotiations with suppliers depends on compatibility of values.

Arnold Hiatt, retired CEO of Stride Rite Shoes, offers a goodexample of this. Over the years, Hiatt steadfastly resistedacquisition of his childrens shoe business, Blue Star, by companieswho did not share Blue Stars commitment to the health andcomfort of the young customer. Eventually, Hiatt sold thecompany to Stride Rite on the strength of their shared values."When a mother bought a pair of Stride Rite shoes, it wasnt an actof commerce, it was an act of confidence."[7] Today, StrideRitescore valuesembedded in a culture characterized by respect forpeople, social responsibility, participation, and expertiseare thebasis of relationships with customers, suppliers, and dealers."Have our stockholders suffered?" Hiatt asked in a retirementinterview. "Well, those that invested $10,000 in 1984 would now[1992] have $155,000. Not bad."[8]

8


9/15

Basic Concepts

Can a Business Successfully Adopt New Values?

As many U.S. businesses have discovered in recent decades, changesin purpose or priorities may require new behaviors and emphasis ondifferent task values. Rapid growth, new direction, and regulation orderegulation, are a few examples of changing business conditions that

call for reexamination of corporate values. Another is the decision topursue international business: A look at the global marketplacereminds us that standards for acceptable behavior in one location orculture vary widely from those of another. Across cultures, thevariation is often significant.

Changes are not accomplished easily, however, nor can we expectnew values to be internalized quickly. An organization can restate orredefine values as a way of redirecting energy to new goals or ofresponding to changes in the environment. Intellectually, the newvalues may win ready acceptance throughout the organization as thelogical way to advance the common purpose. But the old values mayhave deep roots.

According to McKinsey & Co.s Jon Katzenback, there are no clearexamples of unqualified success in effecting cultural change. Wherecompanies have made significant progress, it is when people have "ashared sense of urgency, have common goals, and organizethemselves into small teams."[9] The successful introduction of newvalues in the business also requires that:

The change address the level of task values, rather thanrelationship values.

The change is not too great; the new values are not drasticallydifferent from the old values.

The change is evolutionary, rather than fast and abrupt.

New values are compatible with the values of the othercommunities to which employees belong and which are constantlyreinforcing their values.

The appeal to change is not based entirely on reason, butaccommodates the personal and emotional dimension associatedwith values.

9


10/15


People are involved and inspired, rather than required, to change.

Leaders visibly demonstrate that they will live the values andempower and enable the transition to new supporting systems thatreinforce the values.

Transformation Takes Time

In large companies like GE and Xerox, cultural change has takenplace over a period of seven to ten years. Four years seems to be theminimum even in smaller companies.[6]

Management commitment to the values, as evidenced by visiblechanges in operating style and systems, determines how readilypeople accept new values and how rapidly new values are reflectedin new behavior. Size of the business is a factor as well. Like a shipheading for an iceberg, a corporation must deal with its ownmomentum when a change in course is necessary. The larger theship, the more difficult it is to change its course and the longer ittakes.

The rate of change is affected by the pervasiveness and strength of theold values. As Welch observed of GE, "We built much of thiscompany in the 1950s around ...plan, organize, integrate, measure.We brought people in buses over to Crotonville and drilled it intothem. Now were saying, liberate, trust, and people look up andsay, What? Were trying to make a massive cultural break. This is atleast a five-year process, probably closer to ten."[1]

In the IMS story, we can recognize several distinct stages in thetransformation effort. These stages, typical of the experience of otherbusinesses that have adopted a values-based approach to business,

can also be seen in the story of AT&Ts Common Bond. (Appendix Bprovides a more detailed description of the development of OurCommon Bond.)

1. People are drawn together in the name of a common purpose orvision.

IMS Story: Several AT&T reorganizations occurring between1984 and 1989 contributed to the development of a centralizedinformation management division.

Common Bond: A century-old business attracted a large, loyalworkforce dedicated to a tradition of universal service.

10


11/15

Basic Concepts

2. An outside forceopportunity or threatenergizes thecommunity.

IMS Story: As Osl reminded the EQC in January of 1990, "ourcustomers are warning us. Our marketplace is warning us."

Common Bond: Divestiture, economic forces, and the 1988

Direction for AT&Tredefined the organizational structure andworking relationships.

3. As members of the community translate energy into action,their shared values emerge.

IMS Story: The Horizons experience helped the EQC to expressthe values of respect and teamwork. During the summer of1990, focus groups participants from across IMS describedstrong, emotional responses to decisions and practices thatconflicted with their values.

Common Bond: Decentralization forced business units to

question old assumptions, develop new approaches, and makepainful decisions, guided by both traditional "Bell System"values and emerging market-focused values.

4. These shared values are captured in language.

IMS Story: The Core Values Team worked from November 1990through January 1991 to identify and articulate the commonthemes in the data from focus groups, surveys, and the EQC.

Common Bond: Bob Allen responded to employee requests forclarification about "what we stand for" by drafting a statementof seven values and chartering an officer task force to championa corporate values initiative. The team of AT&T business unitand division leaders represented Microelectronics, CapitalCorp., Istel, Consumer Products, Universal Card Services,Consumer Communications Services, and NCR, as well as IMS;all organizations had shared values in place.

5. The fit of the shared values is evaluated against vision, purpose,and individual values.

IMS Story: The EQC "signed on" in February 1991; each IMSemployee develops a personal commitment after reflection andexperience of values in the Horizon program.

11


12/15


Common Bond: Review and discussion over an 18-monthperiod involved analysis of two company-wide surveys (1991Employee Attitude Survey and Employee CommunicationsReadership Survey) and telephone and focus group interviewswith employees from eight states, four countries, all parts of thebusiness, and all job levels. Rewritten as five statements

expressing the hundreds of AT&T voices, The Common Bondbecame Our Common Bond in April 1992.

6. Positive, critical, desirable values are reinforced; negative,unsupportive values are discouraged or ignored.

IMS Story: Values-based decisions and actions are rewardedand communicated, meetings and programs emphasize values,and policies are reviewed for inconsistencies. Managementdecisions are openly challenged when they are perceived asfailing to "walk the talk."

Common Bond: First step will be an anonymous senior

management feedback process aimed at recognizing andchanging behaviors that do not support Our Common Bond.Extensive changes in support systems (training, education,appraisals, compensation) are planned as part of a continuingprocess for enrolling, reinforcing, and renewing Our CommonBond.

Change is rarely comfortable, but it can be especially threateningwhen it is initiated by an outside agent. Diving in may befrightening, but not nearly as terrifying as being thrown inunexpectedly. Resistance to new values is likely to be stronger in anenvironment where business conditions contribute to an insecureworkforce. People who have achieved success in one culture tend toresist a new order in which

their strengths have become liabilities, or

they must re-establish their competence against a new set ofcriteria, with no guarantees that they will be successful.

The skills required to manage in a highly controlled and predictableenvironment, for example, have less relevance in an innovative,flexible, adaptive workplace characterized by teamwork andcooperation, innovation and customer focus. Such a transitionredefines the role of management.

12


13/15

Basic Concepts

Other transition issues include contracts with represented employees,impact of regulatory agencies, and relationships with customers,suppliers, and other partners.

The business must deal with these issues sensitively and thoroughly,and provide the training, education, and other support to reorient

employees and develop the skills required in the new order. Chapter3, Living Our Values, examines the support required to engage andsustain the enthusiasm and commitment of employees throughoutthe business.

13


14/15


14


15/15

REFERENCES

1. Tichy, Noel and Ram Charan. "Speed, Simplicity, Self-Confidence: An Interviewwith Jack Welch." Harvard Business Review. September-October 1989.

2. Kanter, R.M. The Change Masters. 1983. New York: Simon and Schuster.

3. Donaldson, Thomas. 1983 "Constructing a Social Contract for Business." In EthicalIssues in Business. New Jersey: Prentice Hall. p.165.

4. Kanter, Rosabeth Moss. 1991. "Championing Change." InHarvard Business Review.January-February.

5. insert ref

6. Kotter, John and James Heskett. 1992 Corporate Culture and Performance. New York:MacMillan, Inc.

7. Stone, Nan. 1992. "Building Corporate Character: An Interview with Stride RiteChairman Arnold Hiatt." InHarvard Business Review. (March/April).

8. "Seeing Public Service as an Investment." In Newsweek. May 4, 1992. p. 609. "Pulling Ones Weight at the New IBM." In The New York Times. July 5, 1992.

15

Shared values.pdf

Documents

Transcript of Shared values.pdf