Some might decide—heroically—to try to work to change the company's values and urge the company to become more ethical in its practices. However, changing a company's values is a Herculean task with significant risk to the participants. At best, it will take many years and many allies to accomplish, including strong support from the top of the organization.29
Still others may recognize the lack of overlap between the corporate values and their own personal values, and decide to live with the difference. They don't tilt at windmills, but neither do they check their values at the door when they go to work. In its negative form, this stance may result in cynicism toward the corporation and its values (or lack thereof). In its positive form, it may result in individuals' embodying their own high ethical standards in the way that they conduct themselves at work. Indeed, some writers argue that the workplace should be a testing ground for the expression of ethical values. Personal example can encourage others to aspire higher.30
Distinguish Operational Values from Espoused Values
Whether instrumental or ethical, values are not just another management gadget. They are something to be lived, to be embodied in action.
It's easy to fall into the trap of espousing values that never become operational. Espoused values are ones that we think we should have. Operational values are the ones actually working in our lives. Sometimes there's a huge gap between the two. This is particularly true of organizations. Most value statements or lists of values that companies put together are dead on arrival and end up as wallpaper, just as Enron's “Statement of Values” failed to become the operational values of that failed corporation.31
Human beings are exquisitely sensitive to inconsistencies between what is said and what is done. Companies where executives purport to have certain values but don't consistently act on the values they profess end up with espoused values. The hypocrisy involved in espousing values that are not acted on generates significant distrust. The following example is typical:
On his first day at work, a newly appointed CEO of a large international organization sent a letter to all staff announcing that he looked on them as family, although any external criticism of the organization would not be tolerated. The idea that staff would be treated as family was well received, while the remark about external criticism caused concern. Over the next several years, he systematically eliminated more than a thousand of the most senior and experienced managers and staff, particularly anyone who dared challenge his views, while he himself repeatedly bad-mouthed the staff of the organization to outside audiences. Not surprisingly, the values of “treating staff like family” and “abstaining from external criticism of the organization” never jelled as organizational values.
If companies want to embody certain values, then they have to begin by ascertaining what values are currently operational. Only then can they decide which values they want to change and how to go about it.
Changing values isn't quick or easy. As Karen Dietz, former executive director of the National Storytelling Network, told me, “Companies often say that innovation is a value, but in assessments of operational values, innovation ends up near the bottom of the list. So the gap between the espoused value and operational value is huge. If the company decides that innovation really is important, then they are looking at a multiyear effort to influence that value and get it embodied in the organization's operational values.”
If Values Are Absent, Take Action to Reestablish Them
Sometimes a firm faces a values bankruptcy even though it remains solvent in financial terms. Such a case was the giant conglomerate Tyco, which was wracked by a spectacular corporate governance scandal. Systematic illegality and fraud at the very top of the organization had created a climate of uncertainty and a reputation that was toxic. Yet Tyco did not implode like Enron. Beneath the cloud of scandal, Tyco had solidly profitable manufacturing businesses providing a broad range of products, including duct tape, sprinkler systems, industrial valves, and security systems. It was a $35 billion company with 260,000 employees.
When the fraud was discovered, a new management team was installed, and part of their reform effort involved obvious structural measures: separating finance from operations, appointing a credible board of directors with real power, and conducting exhaustive audits. But the more difficult challenge was changing the hearts and minds of the people who worked there. How could they instill a new set of values? How could they establish the honesty and integrity that had been singularly lacking in the very recent past? Although the vast majority of the company's employees hadn't been involved in any wrongdoing, the scandals at the top of the firm had established an atmosphere where anything goes.
When new management took over, in addition to establishing new governance procedures, they set about trying to change the ethical climate and reestablish the firm's values.32 They developed a guide whose intent was not simply to teach people to spout the right answers to obviously worded questions but rather to acknowledge that the issues are often nuanced and complex. How would you know if you're moving into territory where ethical judgment was required? How would you notice when things were beginning to smell bad?
The Tyco “Guide to Ethical Conduct” uses simple narrative vignettes to explain the meaning of abstractions like “fraud” or “inappropriate political activity.”
Fraud looks like …
Jordan's client takes him out for dinner after he makes a sales presentation at the client's company. Jordan then expenses the same US$65 dinner.
Yin, a software training specialist, makes copies of software programs for use on her computer at home and gives copies to all her family and friends.
Sophia, a comptroller, loans her employees money from the company, charges them interest and deposits their repayments into her personal bank account.33
Tyco managers did more than distribute the guide. They also created six short videos dramatizing the situations, three of them set in an office and three in a factory. Employees gathered in several thousand Tyco locations not only to get their copies of the guide but also to see the videos and begin an ongoing dialogue about the content.
Making values explicit was a first preparatory step. Making the values operational comes through action.
Establish Values Through Action
Leaders establish values through action. Thus, the publication of Tyco's “Guide to Ethical Conduct” will have no impact at all unless it is backed up by the consistent action of the management.
For values to take hold, leaders have to live them on a sustained, consistent basis. The implication is, “Look, if I can do this, so can you.” I experienced this myself as a manager in the World Bank:
In 1990, when I was appointed director of the World Bank's Southern Africa Department, I inherited an excellent staff, though attitudes to work-life balance were poor. Many staff members often worked in the office until midnight, in part because my predecessor had also worked late most nights. Part of the dynamic was that people had wanted him to see that they were there late. I had no desire to stay late at work, as I wanted to spend my evenings with my wife and my three-year-old daughter.
As a result, in my first meeting with the department managers and staff, I announced that I would be leaving every day around 5:30 p.m. and I encouraged all of them to do likewise. My subordinates looked at me in disbelief and suggested that this would not be possible: there were always last-minute demands and deadlines that prevented them from finishing the work in the regulation 9-to-5:30 period. But I was adamant: I would leave no later than 6:00 p.m. I would answer e-mail from home if necessary, but I wouldn't be physically in the office.
And so I began, day after day, leaving at around 5:30 p.m. At first, no one believed my story. Almost everyone continued to stay late, amid underground rumblings that I would soon be forced to work as late as my predecessor. But I continued to leave at least by 6:00 p.m. And staff could also see that I answered e-mail promptly from home, so that no substantive question
remained unanswered. And if anyone wanted to discuss an issue face-to-face, I made myself available during the day for anyone who wanted to drop by.
After I'd spent several months on the job, as the story about my not working late in the office was confirmed by my actions, the number of people who stayed late fell significantly. It slowly dawned on people that I was not going to participate in the late shift in person, so there would be no one to observe their late-night dedication, and more and more of them went home at the regular time.
This also meant that they worked more effectively during the day, as extended lunches and lengthy coffee breaks gave way to a focus on getting the job done. With only eight hours available, people now used their time more wisely.
Yet a few hard-core late-nighters persisted, lamenting my unwillingness to join them. When they complained to me directly, I would tell them to “get a dog,” “develop an interest in stamps,” or “find a significant other”—anything to create an alternative source of interest in their lives beyond the office. Eventually everyone went home.
Thus, merely telling the story of my values in itself had little effect. It was only when people saw that my actions coincided with the story that the value of proper work-life balance became established as a value of the department.
Transmitting Values Through Narrative
Once values have been established, they can be transmitted by narrative. In this area, conventional management techniques are useless, if not counterproductive:
Giving people instructions to be ethical or putting up posters with lists of values just doesn't register.
Talking about sanctions for wrongdoing gets people's backs up.
Issuing corporate value statements that require ethical behavior from employees and loyalty to the firm but offer no reciprocal commitment from the firm to the employees typically elicits cynicism.
In fact, transmitting values is one of the trickier management challenges. That's because it's easy to slip into moralizing and dictating behavior. We've all had the experience of a parent saying, “I know better than you, so do what I say.” Most of us at some level resist moralizing and the command to comply. Moralizing is easy to discredit because as human beings, we are not perfect and our moralizing sets us up to be knocked down for our own imperfections.
Work can be dictated, but behavior only influenced. So how can leaders transmit values but not have them sound preachy or arrogant or parental? Telling a story embodying the values and letting the listeners themselves see the point can be effective. A light touch is desirable, without ramming home the point with an abstract label or a moral. For example, Jim Sinegal, cofounder, CEO, and president of Costco Wholesale, regularly uses stories to convey Costco's corporate values. He retold one of his favorites, the salmon story to Evelyn Clark, as she recounts in Around the Corporate Campfire:
In 1996 we were selling between $150,000 and $200,000 worth of salmon fillets company-wide every week at $5.99 a pound. Then our buyers were able to get an improved product with belly fat, back fins, and collarbones removed, at a better price. As a result, we reduced our retail price to $5.29. So they improved the product and lowered the price.
The buyers weren't finished with the improvements, though. Next our buyers negotiated for a product with the pin bone out and all of the skin removed, and it was at an even better price, which enabled us to lower our price to $4.99 a pound. Then, because we had continued to grow and had increased our sales volume, we were able to buy direct from Canadian and Chilean farms, which resulted in an even lower price of $4.79.
Over a five-year period, a significantly enhanced product was lowered from $5.99 to $4.79. The final improvement was that the belly was removed, and the customers got the top fillet, and price further reduced to $3.99 a pound….
We've used that story so much as a teaching tool that I've had other buyers in the company, such as a clothing buyer in Canada, come up to me and say, “Hey, I've got a salmon story to tell you.” The story explains the essence of what we do.”34
Sinegal tells and retells the salmon story because it exemplifies Costco's core values of delivering value to customers through high-quality products at low prices. It also demonstrates the results that can be achieved by staying focused on the organization's values.
Avoid Moralizing
Don't begin the story by naming the value. For example, starting with, “Let me tell you a story about courage,” is likely to be ineffective. People will assume you are going to moralize and they will stop listening. Besides, it's also telegraphing the ending, which any good storyteller avoids since it removes any interest in the story.
Similarly, don't end by saying, “So you must do this too.” Instead, the leader has the opportunity at the end of the story to say, “And this is what it means to me,” or “And this is what I learned from that experience,” or “These are the decisions I've made because of that.”
Transmitting values through a narrative allows a leader to demonstrate a particular value and provide the meaning of that value, while at the same time allowing others to adopt their own interpretations of that value. It also allows the listeners the opportunity to reflect on their relationship with that value and understand more about it.
Thus, companies like 3M use stories to communicate the value they attach to innovation. The story of the invention of the sticky note has become legendary:
It took five years from the time Dr. Spence Silver invented the peculiar substance—an adhesive that didn't stick very much—to the time a new-product development researcher named Art Fry came up with the concept that turned into the Post-It note. Recalling his frustration at trying to keep his place in his church choir hymnal, Fry realized that Silver's “failed” adhesive could make for a wonderfully reliable bookmark.35
What is less well known is that the innovation stories 3M tells put emphasis less on single serendipitous flashes of insight like this and more on a sustained effort involved in making innovation actually happen. Even after Fry's insight, it was still a struggle to get his idea accepted within 3M. Thus, the 3M story continues:
There remained skeptics within 3M as attempts were made to launch this new product. Engineering and production people told Fry that Post-It notes would pose considerable processing and coating difficulties and would create much waste. Fry's response demonstrated the approach of the true innovator and saw the obstacles as an opportunity for 3M to excel.
Market research (always difficult with revolutionary new products) was another hurdle. Who would pay for a product that seemed to be competing with free scrap paper? Despite initial decisions to kill the program, Geoff Nicholson (a development manager for new products) persuaded the division vice president to come with him to Richmond, Virginia, and pound the streets to see if they could sell the product. They did, and Post-It notes went on to become 3M's most famous product.36
More recent stories at 3M have focused on career-long innovation. Such stories aim at helping 3M staff understand the importance of challenging and encouraging one another to look for innovative ways to meet customer needs and solve customer problems.
Use Parables to Illustrate the Conflict of Values
We can learn a great deal from the religious leaders who for thousands of years have transmitted values by way of parables, such as Jesus Christ's parable of the talents:
A man about to travel to a far country called his servants together, and put them in charge of his property. To one, he gave five thousand gold coins (the original word talents is still used metaphorically today), to another two thousand, and to another one thousand, to each according to his ability. Then he left on the journey.
The man who had received the five thousand gold coins traded with them and made an additional five thousand gold coins. Similarly the man who had received two thousand coins made another two thousand. But the man who had received only one thousand coins went and dug a hole in the earth, and hid the money.
After a long time the master of those serv
ants came back and settled accounts with them. The man who had received five thousand gold coins came and brought another five thousand coins, saying, “Master, you gave me five thousand coins: look, I have earned another five thousand.” His master said to him, “Well done, my good and faithful servant: you have been faithful over a few things. I will put you in charge of many things.”
The man who had received two thousand gold coins came and said, “Master, you gave me two thousand coins: look, I have earned another two thousand beside those.” His master said, “Well done, good and faithful servant; you have been faithful over a few things, I will put you in charge of many things.”
Then he who had received the one thousand gold coins came and said, “Master, I knew that you are a hard man, reaping where you have not sown, and gathering where you have not scattered seed, and I was afraid. So I went and hid your gold coins in the earth. So here, I am giving back what is yours.”
The Leader's Guide to Storytelling Page 16
