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Ideas to Read and Pass Along

Kevin & Jackie Freiberg

Leaders as Value Shapers

Great leaders understand that it is their capacities to shape values and educate through vivid, living, personal example that ultimately directs the course of a firm. The way people think about customers and co-workers, the way they behave, and their impressions of right and wrong are all influenced by watching the way their leaders live out the organization’s values.

If you want to identify the true character and personality of an organization skip the values statement that hangs in the corporate foyer and observe the way people act in the mundane, ad hoc, isolated events of every day. Then examine the company’s systems, strategy, structure, and policies. They are the living expression of the organization’s underlying values.

What are core values?

Every firm builds its reputation based on a set of values. The question is whether the values driving the business of the firm have been haphazardly acquired or purposefully instilled, protected, and promoted. This is why leaders must become particularly interested in their role as value shapers.

Values are the emotional rules that govern people’s attitudes and behaviors. They establish boundaries that influence how an organization fulfills its mission. Values are deep-seated beliefs we have about the world and how it operates. They influence organizational outcomes and ultimately determine the quality of our lives. Values are the fundamental basis for the choices we make. They provide a framework for decision making. Values are the non-negotiables in an organization. They are the principles for which we stand – principles we find extremely difficult to compromise.

Two types of values

Two types of values exist in every organization. The espoused values and the values people practice. When there is alignment between the two types of values, leaders within the organization are perceived to operate out of personal integrity. Simply put, personal integrity is doing what you say you’re going to do.

When there is a disconnect between the espoused values and the values we practice that’s called hypocrisy. Professing a belief, philosophy, or standard to which you don’t hold yourself accountable is an act of pretension and insincerity. Hypocrisy is the practice of doing this habitually. Leaders who operate out of hypocrisy breed compliance because they lack influence and must lean on positional power to get things done. In the long-run mere compliance will only take the organization so far before people lose faith in their leaders.

Leadership functions on the basis of trust and credibility. That’s why leaders must become consciously aware of closing the gap between the espoused values and the values they practice. Leaders who live their values inspire a tremendous sense of commitment and loyalty in others. As a result they expand their influence and their ability to affect change. This is important because the highly competitive and rapidly changing world in which we live requires nothing short of a radical commitment to excellence from every person in the organization. With strong leadership people develop the necessary hope, passion, and perseverance to meet the demands of an unforgiving marketplace.

Being faithful to our values

When customers, suppliers, shareholders, and most importantly employees evaluate whether or not we are faithful to the values we profess, what criteria do they use? The following list is certainly not comprehensive, but it’s a good place to start.

  1. How you spend your time. If you want to know what an executive values watch the way he or she allocates time. We spend time on those things that are most important to us. If you really want to put yourself to the test make a list of the top 5-6 values driving your organization. Then look at your day timer or calendar program and do a content analysis of the way you allocated your time over the last 18 months. What does your schedule say to others about what you value?
  2. How you spend your money. Take out your checkbook and audit your expenditures. Thoroughly examine the last budget you prepared. Is it consistent with what you value? The way we spend money says a lot about our priorities. If you say the key to your future lies in developing your people, what percentage of gross revenues do spend on training?
  3. Your reaction to critical incidents. Whether it’s a customer complaint or commendation, how you handle the event sends a message to the people in your organization. When a customer asks your team to go above and beyond the call of duty how do you respond? When one of your people does something heroic do you celebrate and publicize their actions?
  4. What you reward and punish. Do you give out generic employee of the month awards or do your awards specifically reinforce the values that are driving your business? Do your incentives promote internal competition or cooperation? When one of your people takes an intelligent risk with the intent to benefit the company and fails do you reward or punish their effort? When someone who reports to you musters the courage to give you constructive feedback how do you respond?
  5. Questions you ask. Do the questions you ask demonstrate your concern for your employees? Do your questions primarily encourage people in your organization to focus on the customer or on the numbers? Your questions reveal a lot about the dominant themes that occupy your mind.
  6. Things you measure. If you believe your people are your major point of differentiation, are you as rigorous about measuring their satisfaction as you are about measuring their productivity or financial results? If you believe that a significant part of leadership is serving your internal customers, are those customers given an opportunity to evaluate the quality of the services you provide?

The power of a strong value system

Consider Southwest Airlines, Disney, General Electric, Federal Express, Johnson & Johnson, TDI Industries, Hewlett-Packard, and Merck just to name a few. These unique firms, all of which rank among the most admired companies in the world, find enormous strength in their core values. This is because strong values:

  1. Build trust and confidence. In organizations where a strong set of values exist leaders have more confidence to let go of power and authority. When I’m 1,500 miles away from headquarters negotiating a critical agreement on behalf of the company you will have more confidence in me knowing that we are committed to the same values.
  2. Foster accountability. A strong value system creates boundaries. When the boundaries are clear employees have more freedom and authority to act because they know that their actions will be supported by those who share the values. People are more willing to assume responsibility and be accountable when you reduce the uncertainty that comes with ill-defined boundaries.
  3. Establish a unified front. Strong values concentrate the efforts of a team. When people are drawn together by a common set of beliefs something powerful happens. The values holding the team together suddenly become more important than the agenda or special interests of any one individual. The result is a spirit of cohesiveness and a unified front that captures the diversity of gifts and talents people bring to the team.
  4. Provide guidance in times of crisis. In a chaotic world where people feel pressured to compromise ethics and cut corners in order to get results or cover up mistakes, strong values serve as a moral compass. In a complex world where there are no easy answers to difficult challenges, a strong value system can help determine the rightness of your direction.
  5. Create competitive advantage. People want to do business with leaders who have similar values. Customers want to do business with organizations they can count on. There’s a strong sense of sincerity and authenticity in firms with clearly-defined values. These companies are less likely to project a false image and make promises in their advertising campaigns that they can’t keep.

People who are not clear about those guiding principles for which they truly stand can never expect to lay a foundation for trust and credibility, let alone develop the capacity to exercise leadership. Great leaders understand that every moment of everyday is a symbolic opportunity to communicate their values. They do not underestimate the power of personal example. Through their daily choices leaders carve out the character and reputation of the organization. In doing so they provide the standard by which others calibrate the appropriateness of their own behaviors.