The Value of Corporate Values. Increasingly, companies around the world have adopted formal statements of corporate values, and senior executives now routinely identify ethical behavior, honesty, integrity, and social concerns as top issues on their companies’ agendas. The meaning of this new emphasis on values, however, is less obvious than the trend itself. So to explore how deeply these values are embedded in organizations and to examine the role that values are playing, in 2. Booz Allen Hamilton and the Aspen Institute, a nonprofit and nonpartisan forum focused on values- based leadership and public policy, conducted a global study of corporations in 3. Value For Money Strategy Housing Association 2012Senior executives of 3. CEOs or board members. That’s a change — quite a significant change — from corporate practices 1. The ramifications of this shift are just beginning to be understood. At Xerox, CEO Anne Mulcahy says that corporate values “helped save Xerox during the worst crisis in our history,” and that “living our values” has been one of Xerox’s five performance objectives for the past several years.
Competition is one of society's most powerful forces for making things better in many . The study of competition and the creation of value. These values — which include customer satisfaction, quality and excellence, premium return on assets, use of technology for market leadership, valuing employees, and corporate citizenship — are “far from words on a piece of paper. They are accompanied by specific objectives and hard measures,” adds Ms. According to market and social trend analyst Daniel Yankelovich, the public’s widespread cynicism toward businesses today is the third wave of public mistrust about corporations in the past 9. The first, set off by the Great Depression, continued until World War II; the second, caused in part by economic stagflation and the Vietnam War, lasted from the early 1. Singapore's #1 deep value investing course. Learn an entire step by step strategy to zoom in on bargain stocks with huge return potentials. For eCommerce companies, one of the biggest marketing challenges can be setting yourself apart from the crowd. By creating effective value propositions, you can help. Introduction The Treacy & Wiersema Value-Discipline Model was first published in the ground-breaking Harvard Business Review article In each of these periods, Dr. Yankelovich wrote in the May 2. Making Trust a Competitive Asset: Breaking Out of Narrow Frameworks,” companies tended to be reactive, blaming “a few bad apples,” dismissing values as “not central to what we do,” or ignoring opportunities to improve because “we don’t have to make major changes.” The current wave of disapproval began in 2. Enron, World. Com, Tyco, and others. But this time, according to the survey, the response appears to be different. More and more companies are looking inward to see what has gone wrong and looking outward for answers. They are questioning the quality of their management systems and their ability to inculcate and reinforce values that benefit the firm, its various constituencies, and the wider world. Rather than wall themselves off from critics, more companies are listening to them and looking for new ideas. And more firms are taking action to turn their corporation’s values into a competitive asset. If the new attention to values were simply a transitory reaction to the business scandals of recent years, or merely a public relations device to direct or deflect media and investor attention, it would be worth little note. But more companies are going well beyond simply displaying values statements: They are engaging in values- driven management improvement efforts. Among those efforts are training staff in values, appraising executives and staff on their adherence to values, and hiring organizational experts to help address how values affect corporate performance. Moreover, companies are showing little patience for executives who place their businesses at risk by crossing the line from prudent to unethical behavior. A recent example was the prompt decision by Boeing’s board to oust CEO Harry Stonecipher over a sexual affair he was having with an employee. Stonecipher had been appointed to the top job 1. Boeing’s standing with the Pentagon, its largest customer, after a series of ethics breaches. The board did not specifically indicate what ethical rule Mr. Stonecipher had violated, but it was clear that in the current climate, any obvious ethical lapse would be an indiscretion that the company could not tolerate and that would affect the bottom line. It is not adequate to meet the letter of the law — the spirit and the intent are what have to be kept keenly in mind.”For the purposes of this study, we defined values as “a corporation’s institutional standards of behavior.” Generally, companies follow the same “values cycle”: They articulate a set of corporate values and attempt to embed them in management practices, which they hope will reinforce behaviors that benefit the company and communities inside and outside the firm, and which in turn strengthen the institution’s values. The fundamental findings were. Of the 8. 9 percent of companies that have a written corporate values statement, 9. Further, 8. 1 percent believe their management practices encourage ethical behavior among staff. Ethics- related language in formal statements not only sets corporate expectations for employee behavior; it also serves as a shield companies are using in an increasingly complex and global legal and regulatory environment. Of the companies that value commitment to customers, 8. Substantial majorities also categorize employee retention and recruitment and corporate reputation as both important to their business strategy and strongly affected by values. However, few think that these values directly affect earnings and revenue growth. Fewer than half say they have the ability to measure a direct link to revenue and earnings growth. Companies that report superior financial results emphasize such values as commitment to employees, drive to succeed, and adaptability far more than their peers. They are also more successful in linking values to the way they run their companies: A significantly greater number report that their management practices are effective in fostering values that influence growth, and executives at these companies are more likely to believe that social and environmental responsibility have a positive effect on financial performance. Asian and European companies are more likely than North American firms to emphasize values related to the corporation’s broader role in society, such as social and environmental responsibility. The manner in which companies reinforce values and align them with company strategies also varies by region. Eighty- five percent of the respondents say their companies rely on explicit CEO support to reinforce values, and 7. It is considered the most effective practice among respondents in all regions, industries, and company sizes. Companies have wasted millions of dollars and countless hours of employees’ time agonizing over the wording of statements that are inscribed on plaques and hung on walls. There is a clear assumption that people’s behavior will change because the pronouncements on plaques are “inspirational” or certain words “integrate our strategy and values.” There is an implicit hope that when people — especially managers — hear great words, they will start to exhibit great behavior. Sometimes these words morph as people try to keep up with the latest trends in corporate- speak. A company may begin by striving for “customer satisfaction,” then advance to “total customer satisfaction,” and then finally reach the pinnacle of “customer delight.” But this obsession with words belies one very large problem: There is almost no correlation between the words on the wall and the behavior of leaders. Every company wants “integrity,” “respect for people,” “quality,” “customer satisfaction,” “innovation,” and “return for shareholders.” Sometimes companies get creative and toss in something about “community” or “suppliers.” But since the big messages are all basically the same, the words quickly lose their real meaning to employees — if they had any in the first place. Enron is a great example. Before the energy conglomerate’s collapse in 2. I had the opportunity to review Enron’s values. I was shown a wonderful video on Enron’s ethics and integrity. I was greatly impressed by the company’s espoused high- minded beliefs and the care that was put into the video. Examples of Enron’s good deeds in the community and the professed character of Enron’s executives were particularly noteworthy. It was one of the most smoothly professional presentations on ethics and values that I have ever seen. Clearly, Enron spent a fortune “packaging” these wonderful messages. It didn’t really matter. Despite the lofty words, many of Enron’s top executives either have been indicted or are in jail. The situation couldn’t be more different at Johnson & Johnson. The pharmaceutical company is famous for its Credo, which was written many years ago and reflected the sincere values of the leaders of the company at that time. The J& J Credo could be considered rather quaint by today’s standards. It contains several old- fashioned phrases, such as “must be good citizens — support good works and charities — and bear our fair share of taxes” and “maintain in good order the property that we are privileged to use.” It lacks the slick PR packaging that I observed at Enron. Yet, even with its less- powerful language and seemingly dated presentation, the J& J Credo works — primarily because over many years, the company’s management has taken the values that it offers seriously. J& J executives have consistently challenged themselves and employees not just to understand the values, but to live them in day- to- day behavior. When I conducted leadership training for J& J, one of its very top executives spent many hours with every class. The executive’s task was not to talk about compensation or other perks of J& J management; it was to discuss living the company’s values. My partner, Howard Morgan, and I recently completed a study of more than 1. As it turns out, each of the eight companies had different values and different words to describe ideal leadership behavior. But these differences in words made absolutely no difference in determining the way leaders behaved. One company spent thousands of hours composing just the right words to express its view of how leaders should act — in vain.
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