When communicating a business’s values, authenticity is most effective, according to an executive and professor who has written books on the subject.
Value statements are a good way to engage people with an organization and its goals, said George H. Labovitz, founder and CEO of ODI, an international management training and consulting company, but he notes that often they are vague, aspirational statements. Labovitz is also professor of management and organizational behavior at the Boston University School of Management, and co-author of “Making Quality Work” and “The Power of Alignment.”
“I think they serve a purpose – a valuable purpose – when they’re done properly. Most of the time they aren’t done properly, in my experience,” Labovitz said.
In 2000, an energy giant published to its shareholders a value statement that included communication, respect, integrity, and excellence. The now-infamous value statement certainly didn’t reflect the core values, the values that actually drove the business of Enron.
The best value statements are backed up with action. Start with a “main thing” and allow that to drive management of the organization, Labovitz said.
After “The Power of Alignment” was published, Labovitz was contacted by Shirley Watkins, who was then the secretary of the U.S. Department of Agriculture’s Food, Nutrition and Consumer Services Agency. Upon their first meeting, Labovitz asked Watkins if her organization had a “main thing,” and she promptly responded that it was to end hunger in this country.
Recalling her response, Lavovitz said, “I thought, … ‘that’s what I meant when I wrote you’ve got to have a main thing.’” “I think (Watkins), to me, personifies the idea of a value statement that defines what we do here. What’s our purpose? What’s our value to society?”
More than words: FedEx measures quality, leadership
Examining the 100 best places to work, each one would likely have an articulated statement of values, Labovitz said, but the great ones reward, recognize, measure, track, and align those statements with action.
A corporation that lives its value statement is FedEx Corp., Labovitz said. In 1989, Labovitz, working as a consultant, met with the senior executives of FedEx.
In the meeting, Fred Smith, founder and CEO of FedEx, said that FedEx is in the service business and could not deliver world-class service without world-class people, so their goals must be people, service, and profit, in that order, according to Labovitz.
In order to align company culture with the values, FedEx employed a leadership index. It surveyed employees and asked specific, targeted questions about how they were being managed. Then, they tied the results to the performance management system.
It also employed a service quality index, which was a mathematical representation of everything that happened at FedEx the day before. Every manager at FedEx, from supervisors to executives, received the SQI at 10 a.m.
“There’s an old axiom, as you probably know, in management that says, ‘You can’t manage if you can’t measure.’ I believe it,” Labovitz said. “…Measurement drives behavior. Behavior creates culture.”
Say it again, Do it again
Measurement is the best way to ensure that values are aligned with the company value statement, and repetition is one of the best ways to communicate to employees what is important to the organization.
Vern Clark, former Chief of Naval Operations for the U.S. Navy, made “The Power of Alignment” required reading for his admirals, Labovitz said.
As Labovitz retells it, In Clark’s first year, he gathered master chief petty officers and senior chief petty officers in San Diego to learn what they wanted from the Navy: What type of Navy did they want to be part of?
The transformation began after this meeting. After a year, he brought them together again. Under the advice of an admiral, he repeated what he had said the year before because many hadn’t met there the previous year, many didn’t remember, and many needed reinforcement.
Repetition also was a factor in an anecdote Labovitz related about American Express.
In the early to mid-1980s, James D. Robinson III was named chief executive officer of American Express, which at the time was not doing well, Labovitz said. Robinson planned to save the company by converting it into a customer service star. Louis V. Gerstner Jr. held the position of executive vice president there. Labovitz said Gerstner told him a story about Robinson making customer service the company’s core value and how important it was to the transformation of the company. “When the old man — Jim Robinson — when the old man comes into your office every day for a year and says, ‘What are you doing to improve customer service today?,’ … you begin to think he’s serious,” Labovitz recalled Gerstner saying.
Perhaps the most effective way to employ values is to “walk the talk.” FedEx employees tell a story about Smith, the CEO of FedEx, taking a red-eye flight to Seattle to save a big account, Labovitz said. He said he does not know if it’s true, but he knows that the employees believe it because Smith is the type of leader who embodies the values of his organization.