Harvard Business School’s Working Knowledge Newsletter (February 27th) features a great Q&A article on Corporate Values and Employee Cynicism.

“Many studies have shown the power of meaningful values to energize employees, providing them with a sense of purpose and identity in a world that is in flux. But our research shows that values must be managed with care.

“Hypocrisy may be unavoidable for leaders in the modern world. With rapid changes in the environment, it can be very hard for leaders to keep promises at ‘Time 2’ that they made at ‘Time 1.’ Companies also have more stakeholders—parties to whom the public feels they are responsible—than ever before. The public itself is a powerful stakeholder that is increasingly demanding about issues ranging from the environment to employee benefits. With the incredible speed and reach of modern communications, companies are now under unprecedented scrutiny, not only from their employees and shareholders, but also from advocacy groups, watchdog organizations, and an ever-savvier public.”

Hypocrisy, as it turns out, can be both real and imagined (sometimes leaders and employees interpret the same value differently). So not only must leaders “walk the walk,” but they must also communicate with employees and other stakeholders very, very well.

By the way, the article presents a great example of perceived hypocrisy, ripped from recent headlines:

“The news these days is filled with stories about leaders and organizations that are seen as hypocritical by either employees or the public. For instance, the public has reacted negatively to Google’s compliance with restricted access to information in China; this is seen as breaching the company’s motto, ‘Don’t be evil.’”

Hmm, don’t be evil, in deed or perception…

Fast Company: “Look beneath the surface of many great business successes, and you’re likely to find a trail of failures that preceded them. Describing the painstaking trial-and-error process that led eventually to the creation of the incandescent light bulb-and General Electric-prolific inventor Thomas Edison said ‘I have not failed. I have merely found 10,000 ways that won’t work.’”

My comment:

Failure isn’t a strategy, but I’ve read that something like 90 percent of well-conceived strategic plans are never successfully executed. And two-thirds of corporate change efforts fail. So we’re all failing, most of the time. Having witnessed failing, dysfunctional organizations up close and personal, what has struck me most is how many corporate executives and directors gloss over seemingly obvious failures, creating an environment that inhibits useful change efforts. Designed to Fail is the phrase that often comes to mind.

Lisa Haneberg on standards for managers, including:

Managers ought to have the courage to make tough decisions and solve difficult problems.

I agree, but consider this story. During a meeting to discuss our strategic plan, one of my colleagues asked, “What’s the biggest problem for managers around here?”

Before any of us could respond, he went to the whiteboard and wrote his answer:

C R U C I F I X I O N

He was right.

Lisa correctly focuses her attention on middle managers, but if we’ve learned anything from Enron it’s that a company’s culture can require heroic efforts from employees to simply do the right thing. And the cultural environment, while impacted by middle managers and employees, is really determined at the top.

Standards are good. We need them for managers and we really need them for leaders.