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…

In My money, your cause, what now?, Seth Godin writes about the growing conflict between corporate practices and the values of individual consumers:

“I have a valued business partner that creates products I’m ashamed of. What do I do now? Do I have an ethical obligation to change how I work in order to make my feelings clear? Do I have a marketing obligation?

What happens when consumers use the power of their money to make their feelings clear? What happens to Chick-fil-A or Bennetton when every purchase becomes a political act?”

Seth thinks the “disconnect between what we spend and what we believe” is about to change.

Well, it has changed in the past. For example, the Montgomery bus boycott was an example of citizens using their purchasing power to protest governmental policy in 1955. But the times have changed. Corporations have much more power today, and that power is increasing. With the internet, cell phones and other world-flattening technologies, citizen-consumers have more power too.

I’ve been searching for an article written by Jim Collins in the April 1999 issue of Inc. Magazine. The title was “When good managers manage too much.” What grabbed my attention was the tease on the cover, “How to know when you’ve hired the wrong person,” and the subtitle should have been, “And what to do about it!” The answer is, you get rid of them

Today, I came across an interesting entry on Don Blohowiak’s Leadership Now blog:

“What are the most pressing problems facing your business today?” That’s a question my good friend Michael Hudson, Ph.D., put to managers in a wide variety of businesses across the USA.

“Surprisingly,” Michael writes, “the most frequent answer is not recruiting or retaining people. It is, in fact, the exact opposite: How to get rid of the people who don’t belong.”

Blohowiak cites Hudson’s plan for “making sure you have the right people on the bus.” It’s a good approach, but very difficult to implement anywhere, especially in public enterprises. I wonder how Hudson and Blohowiak think about evaluating your team members for performance and values?

A few years ago, a colleague and I were in a conference room discussing Jack Welch’s Values vs. Production model. I drew the following diagram on the white board and explained how the model worked:

We talked about how to apply this model in our company. We discussed the performance of each of our top managers (“did they make their numbers?”), and how each lived the values. And of course, we started filling in the grid. It looked something like this, with each “X” representing a manager:

Continue reading ‘Embrace and Extend’

A few years ago, I happened upon a Jack Welch interview on C-Span while flipping channels. Jack was asked, “How do you evaluate people at GE?” Note that this was before publication of his autobiography (Jack, Straight From The Gut). Before I knew much more about him than his role as CEO of one of the world’s largest companies. I also knew of his reputation as a leader, but none of the details.

Jack explained that he always asks two questions about each person: Continue reading ‘Management by Values’