Peters and Waterman in their blockbuster book “In Search of Excellence” write:
“Let us suppose that we were asked for one all-purpose bit of advice for management, one truth that we were able to distil from the excellent company’s research. We might be tempted to reply, “Figure out your value system. Decide what you company ‘stands for’. What does your enterprise do that gives everyone the most pride? Put yourself out ten or twenty years in the future: what would you look back on with greatest satisfaction?”
“Every excellent company we studied is clear on what it stands for, and takes the process of value shaping seriously. In fact we wonder whether it is possible to be an excellent company without clarity on values and without having the right sorts of values. Not only the articulation of values but also the content of those values, and probably the way they are said, makes the difference’.
“Truly great organizations ‘think’ of themselves in a fundamentally different way than mediocre enterprises. They have a guiding philosophy or spirit about them, a reason for being that goes beyond the mundane or mercenary”. (Built to Last p ix)
Each and every Visionary Company has a Statement which is a declaration of
- This is who we are
- This is what we stand for
- This is what we are all about
It’s like the National flag (colors) carried, by soldiers, into battle.
These Statements became the shaping force of each Visionary Company. Significantly, their core ideologies transcended purely economic considerations. Profitability was a necessary condition for existence and a means to more important ends, but not the end in itself.
Collins and Porras in “Built to Last” set about identifying the characteristics and dynamics common to the eighteen companies. They found that the fundamental element of each of the Visionary Companies is its Core Ideology – its Core Values and its sense of Purpose beyond just making money. The Values Statements of each Visionary Company was what guided and inspired them.
Corporates need to craft a Statement of Common Purpose and Shared Values.
Probably the best examples of Purpose and Values come from “Built to Last”, authored by Jim Collins and Gerry Porras. After six years of research, the authors gave definitions of a Common Purpose and Shared Values. In their book they also give examples Corporate Purpose and Shared Values:
CORPORATE PURPOSE CAPTURES THE SOUL OF THE ORGANIZATION
DEFINITION OF PURPOSE
- Purpose is the fundamental reason for being in business beyond just making a profit.
- It is what we aspire to become, to achieve, to create.
- Core Purpose is important for guiding and inspiring the organization, it is also more difficult to identify than Core Values.
- Purpose reflects the importance people attach to the company’s work—it taps into their idealistic motivations—rather than just describing the organization’s output or target customers.
- Purpose should not be confused with specific goals or business strategies. Whereas you may achieve a goal or complete a strategy, you cannot fulfill a purpose; it’s like a guiding star on the horizon—forever pursued, but never reached.
- While purpose does not itself change, it does inspire change. The very fact that purpose can never be fully realized means that an organization can never stop stimulating change and progress in order to live more fully to its purpose.
DEFINITION OF VALUES
The guiding principles of the organization (the most important behaviours which are essential and fundamental and not negotiable) Collins and Porras: Built to Last.
- Core Values are the organizations essential and enduring tenets—a small set of guiding principles that require no external justification; they have intrinsic value and importance to those inside the organization.
- Core Values define what we stand for and they are what we will hold even if they become a competitive disadvantage.
- There is no universally “right” set of core values.
- Do not confuse core values with operating practices, business strategies and cultural norms.
- In most cases a core value can be boiled down to piercing simplicity that provides substantial guidance eg “We put the customer ahead of everything else. If you’re not serving the customer, or supporting the folks who do, then we don’t need you”. Sam Walton of Wal-Mart.
Visionary companies tend to have only a few core values, usually between 3 and 6..
“Value is a lofty and a vague word but all it really means is behaviour. Values are how a company wants their employees to act. Managers have to make sure that everyone in the company knows the values. They have to demonstrate the values themselves and lavishly praise and reward them in others and basically always talk about the company values”. Jack Welch, former CEO of General Electric
COLLINS & PORRAS – VERY IMPORTANT POINTS:
- Do not fall into the trap of using core values from visionary companies as a source for core values in your own organization. Don’t mimic others. The key is to capture what is authentically believed in your own company.
- Understand that core ideology exists as an INTERNAL element, largely independent of the external environment.
- Core values need no rational or external justification. They don’t sway with the trends and fads of the day, nor do they shift in response to changing market conditions.
- In knowing how to satisfy the needs of clients, staff and shareholders the roots of your core values can be established