If You Want to Be a Good Leader, Understand The Link Between Business Values and Leadership Value-centered leadership can build a positive and productive culture for a more successful company.
By Martin Rowinski Edited by Micah Zimmerman
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Let's look at two different lessons about leadership and corporate values:
In 1982, Johnson and Johnson (J&J) discovered that someone had contaminated their Tylenol Extra Strength capsules in at least half a dozen Chicago pharmacies and grocery stores. Because of their corporate values committed to public safety, J&J leadership responded immediately: warned customers to stop consuming it, halted advertising and removed all Tylenol from store shelves until they could determine the extent of the tampering.
In 2010, the Deepwater Horizon drilling rig platform exploded, and its owner, British Petroleum (BP), realized it had a leak. Company officials first reported the leak volume was low, but when the rig sunk days later and eleven workers died, investigations into BP's practices found they took shortcuts, cut corners and ignored early warning signs. Its leadership was dishonest from the get-go, and to recover, the company had to revisit and update its corporate values.
Business values are the guiding principles that shape an organization's culture and inform its decisions and actions. Good leadership, in turn, is essential for aligning an organization's actions with its values and creating a positive and productive culture.
Related: Are You a Leader Loyal to Your Values? Here's How to Align Your Leadership Style With Your Values
Clear values need good leadership
Since the 1994 book "Built to Last" identified adherence to core values as a best practice of top companies, most leaders have looked to establish organizational values to ensure their success. But it takes more than words to create an influential company culture built around values. According to Patrick Lencioni for the Harvard Business Review, hollow or dishonest value statements "create cynical and dispirited employees, alienate customers, and undermine managerial credibility." A company's values can be critical to its success, but only with good leadership to model and embody them.
For an organization to be effective, leaders should be personally aligned with the company values and be their biggest cheerleaders. Values are a foundation for the organization to build and provide guiding principles for more strategic decision-making. When leaders make ethical decisions and take actions aligned with organizational values, it builds trust and credibility. Good leaders act as role models, living out the company's values in their everyday work, so their team members can understand how to embrace them in theirs.
Related: 7 Steps to Living Your Life With Purpose
Develop company values
While someone can still be a good leader without explicitly setting and communicating values, it makes the task much more difficult. Values provide a framework for guiding decisions and actions, and good leaders help spread that clear direction and sense of purpose through their teams. Values also help leaders more effectively guide and motivate team members through challenges, building trust and alignment within the organization.
If you haven't already established a set of organizational values, here are five approaches to get you started:
- Your company's mission and vision statements should define what it stands for, so revisit these to see if they can provide insight into its organizational values.
- Examine the company's history. Its founding principles may help shape its values.
- Does your company prioritize sustainability, women's initiatives or social justice in its actions and decisions? These behaviors can also provide insight into its values.
- Is your company culture known for its teamwork and collaboration? Innovation and continual learning? A company's culture or operations can provide clues about its values.
- Ask team members what they value and believe in. Take surveys, hold focus groups, or take feedback through individual interviews to find commonalities to inspire core organizational values.
Values should stand the test of time and, ideally, shouldn't change, but you may find better or more appropriate values along the way. Clearly communicate the reasons for the change to team members, stakeholders, and other relevant parties, and engage and involve them in the change process to build understanding and buy-in. Solicit feedback and ideas from team members or consult with external experts to develop a detailed plan. Elaborate on the steps and resources needed to achieve specific goals and mechanisms to support team members navigating the change to ensure its smooth and effective implementation. Then, monitor and review the plan's progress, course correcting as needed to ensure the change is successful.
Related: How to Gauge and Monitor Employee Engagement
Get your team aligned
Values inform a company's culture, fostering a sense of shared purpose and creating a supportive and inclusive environment, but only when employees are sufficiently educated and enthusiastic about them. Leaders need to communicate their organizational values clearly to everyone — employees, customers, vendors, and other stakeholders — at every interaction. To create a positive and productive culture aligned around values, good leaders repeat and reinforce them among their teams, integrating them into every company process. As Lencioni put it, from their first interview to their last day of work, employees should have constant reminders of the company values – in hiring, performance management, promotions, rewards, dismissal policies, and more.
Encourage open communication and a culture of transparency by creating inclusive opportunities for team members to share their ideas and embrace business values in practice. Provide support and resources — training and development opportunities, guidelines, or toolkits — that can help team members incorporate values into their everyday work. Motivate others by recognizing and rewarding team members whose behavior aligns with company values, either through simple recognition or praise or more tangible rewards like bonuses or promotions based on the degree of performance or contribution to the company.
Employees today want to contribute more and feel a sense of personal purpose and impact where they work, and alignment around company values helps them build this connection with the organization. With values providing organizational alignment and leaders embodying and modeling them, team members better understand how to use them to guide and shape their own decisions and actions. Values allow them to connect the work they do to the company's larger goals, making them feel more capable of having a positive and meaningful impact, and less likely to leave the organization.
