A crisis in consumer confidence has provoked a reappraisal of corporate values. But many companies are still talking platitudes.
Dr. Daniel Yankelovich, a market and social trend analyst, believes the public’s widespread cynicism towards business practices today has driven organisations to look inward to see what has gone wrong.
Businesses are listening to criticisms, questioning their management systems and reinforcing values to build trust with the consumer, using the latter as a source of competitive advantage.
Following the global financial crisis, Barclays then-CEO Antony Jenkins announced a new corporate strategy which would, he said, ensure the Bank made money ‘in the right way’ in the future. Underpinning the seriousness of this commitment, he called for employees to quit if they didn’t agree to the bank’s renewed principles of respect, integrity, service, excellence and stewardship.
However, publically declaring their corporate values does not always give companies a competitive edge. In some cases it can do the opposite. Although senior executives themselves might see a benefit in creating value statements, if the values are empty and not genuinely part of a business’s core fabric, they can in fact be destructive. Questions are raised regarding managerial credibility, employees become dispirited and customers are alienated.
Proctor & Gamble is a good example of how a company has made its core values (trust, ownership, a passion for winning) intrinsic to its entire ethos by recruiting employees who share those beliefs. This strategy was founded on a principle expressed by a former CEO, Ed Harness, who said, “though our greatest asset is our people, it is consistency of principle and policy that gives us direction.”
Originality is vital to developing corporate value statements that build genuine competitive advantage. An analysis of the publicly stated values by FTSE 100 companies highlights this issue clearly. Integrity, innovation, respect, trust and leadership are routinely defined as part of the corporate value set. In this context, they are meaningless platitudes.
Values must be genuine and differentiated. To deliver competitive advantage, there must be a rigorous commitment to upholding the values through the outlook and behaviour of every member of the organisation.
Many businesses start out with a simple idea, and with that idea comes a set of values that for the most part are intrinsic, never spoken, but totally understood. The longer a business exists, however, the greater the capacity for corporate amnesia. The challenge facing many businesses today is how to rediscover the beliefs and attitudes that made it successful in the first place.
Working recently with a banking group in the Middle East we found that one of the essential truths about the business was the phenomenal vision and ambition of its founders. There was something so telling about the pioneering days of the founding team that could still resonate today.
In helping the business articulate its positioning and developing its brand we needed to look no further than its early history to discover that essential truth. It was not something you could make up. It was clear, compelling and still relevant in a fast changing, ever growing market.
But just re-stating founding principles will not be enough. It is not only the ‘what’ but the ‘why’ that is vital. To engage employees and customers, companies need to provide a compelling narrative and the reasoning behind it.