The media has had a field day with the collapse of ethical leadership in many large corporations over the past few years. Companies have had their executives pilloried in the business press for behavior that rewards the few at the top while penalizing employees and customers.
In our studies of effective organizational cultures, we found abundant evidence that leaders who are clear about their company’s reason for being (purpose) and who define what “good corporate citizens” look like (values) are able to deliver and sustain both performance and employee satisfaction over time. The creation of a purposeful culture—one that holds employees accountable for exceeding performance expectations while modeling the organization’s declared values—is critical for business leaders in today’s marketplace.
Two Blanchard colleagues, Garry Demarest and Bob Glaser, and I developed a proven culture change process to help senior leaders create a high performance, values-aligned culture.
Developing a high performance, values-aligned culture requires three integrated steps. They are:
- Defining the organization’s purpose and values,
- Defining performance expectations, and
- Leveraging these declarations with accountability systems.
In simpler terms, culture creation is about consequence management—making plain both the outcomes needed and the appropriate ways to accomplish those results, and providing immediate consequences (positive or negative) for every staff member.
Some organizations attempt to define their culture by establishing elaborate purpose and values statements, and then publishing these statements far and wide—posting them in the workplace and on company web sites. However, the most effective approach is to draft straightforward declarations of purpose with values defined in behavioral terms, which enable values metrics to be established. Few organizations go to these lengths. Without a behavioral definition of values, confusion reigns when staff members try to hold each other accountable for those values. An example might prove helpful.
“Integrity” is a value embraced by many organizations. One company did an admirable job of defining it for their staff: “We work with customers and prospects openly, honestly and sincerely. When we say we will do something, we will do it; when we say we cannot or will not do something, then we won’t do it.” This value is clearly defined, but evidence of behavioral definitions of this value is missing. Worse, there is evidence of inconsistent accountability for demonstrating these values. History proves that these issues lead to some very costly decisions in the executive ranks at this organization. The company? Enron.
Making Values Measurable
In contrast, one of our clients worked harder to make their “integrity” value actionable. They defined integrity as: “Each commitment we make is a promise. We do what we say we will do by keeping our commitments to our peers, our customers, and our stakeholders. We honor our team members, customers, and shareholders by acting on our company values, demonstrating these valued behaviors daily.” The leadership team then defined the “behaviors that model our commitments to our commitments” as the following:
- I make promises and commitments in the present, keenly aware that I’m guaranteeing my performance on that promise.
- If I hold any doubts that I can deliver on a deadline or requirement, I communicate with all key partners what I can and cannot commit to at that point in time.
- I hold team members accountable for the commitments they have made, seeking immediate performance when a deadline has been missed. I listen fairly and work to help my team members keep their promises.
If you were a staff member in this organization, you would have little doubt about how you must behave with integrity, day-to-day, with internal and external customers.
Clarify Performance Expectations
The second step in creating a high performance, values-aligned culture demands that performance expectations be clear for each contributor in an organization. Ken Blanchard says, “All good performance starts with clear goals,” yet it is amazing how unclear goals are in many organizations. Organizations can help contributors gain an understanding of their performance expectations through formal planning forms or more informal discussions with leaders and customers. The critical outcome is for everyone to agree on standards for key goals. This step reduces confusion, clarifies targets, and focuses efforts for everyone.
Hold All Staff Accountable for Performance and Values
The most important step at this stage is to create accountability systems to ensure performance is delivered using the agreed-upon valued behaviors. Such systems include performance management, feedback tools, incentives, and recognition and rewards. Leaders must reward staff members who are performing well and who are modeling the valued behaviors, while redirecting those who don’t. Over time, consistent application of these consequences will lead to a critical mass of staff and leaders who are high performing, values-driven assets.
Feedback tools provide valuable insight into the perceptions of staff members and leaders. We created an assessment tool that offers quantitative feedback to leaders about the extent to which their organization is modeling the best practices of a high performance, values-aligned culture. Confidential responses are gathered from leaders and their direct reports, and are then presented in a profile format to measure differences between employee and leader perceptions. One item in the assessment states, “Team member behaviors indicate strong alignment with the team’s purpose and values.” Scoring is based on level of agreement with the item, from 1 (strongly disagree) to 6 (strongly agree). In one client organization, a division leader we’ve been working with ranked this statement as a 6, while his 14 direct reports ranked this statement across the spectrum (1 through 6), with an average ranking of 4.1. The difference of nearly two points clearly indicates that the valued behaviors are not as strong as the leader believed. Thus, insights gained from these assessments help leaders modify systems or behavior in order to increase accountability for performance and values.
The process of creating a high performance, values-aligned culture requires consistent attention by company leadership and day-to-day reinforcement by managers throughout the journey. It can take 18-24 months from the process kickoff to achieve the demonstrated values-aligned behaviors across the organization. Each step taken progressively builds understanding of performance expectations and commitment to behaviorally-defined values, and accountability systems will reinforce the commitment of the organization to creating a purposeful culture. While this is not a process to be approached casually, the increased employee commitment, company performance, and satisfaction derived from working in a values-driven culture more than compensates.
To what degree is your company living a high performance, values-aligned corporate culture? Share your insights in the comments section below.