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Akhilesh Gulati

Quality Insider

Building a Company on Values

Do your actions match your intentions?

Published: Wednesday, November 7, 2012 - 16:55

Jerry, the president of a company that manufactured precision machine parts, noticed that the business environment had changed dramatically during the past four years. Although his company had done reasonably well in the aerospace industry, customers were taking longer to make buying decisions. When customers did commit to making purchases, they placed smaller orders and pushed for rock bottom prices.

Competitive pressures were felt throughout the company. Jerry was busier than ever meeting with customers, old and new, and trying to showcase products and services to domestic and international prospects. At the same time he was also trying to reduce costs, improve processes, provide innovative solutions, and motivate employees. As president, Jerry’s challenge through this changing customer behavior and the associated employee frustration was to ensure that his actions were consistent with his intended strategic direction and corporate mission.

Realizing that he could not rest on the reputation of his company’s legacy products, Jerry started creating a strategy to build on his organization’s strengths. Wanting to ensure that his employees were part of the process, he sought their input in defining the corporation’s vision and values on which to build this vision. However, other business issues took priority and the “vision and values thing” was placed on the back burner. Unfortunately, this sent an inconsistent message to the company’s employees. The strategic initiative they had devised wasn’t implemented and it became business as usual. He was concerned that their efforts on creating a shared vision would be seen as just another exercise.

“Surely, with the current economic environment, everyone understands the importance of getting and working on orders first,” thought Jerry.

Sometimes those orders sent Jerry out on the shop floor to address various operating issues when he would rather have been sending out the message of change. He needed to generate more sales, but at the same time he understood a message consistent with the initiative must be sent: Creating the vision and values strategy was not a sham. How should he do this?

Reflecting on his thoughts and talking to his peers and core team, Jerry decided on a few key steps.

Company values must be communicated—constantly. Jerry had already worked with his core team and employees to develop a list of corporate values that defined the organization’s culture. He understood how these values provided a framework for the organization’s efforts and defined how the employees felt and interacted with each other and the customers. He knew he had to fuel his organization’s growth on this foundation of integrity, reliability, employee trust, and customer focus. He posted the list throughout the organization to help with the constant communication of the values to employees and to any visitors.

He not only posted the values publicly but also gave each employee a card imprinted with the values to carry with them at work. He had been inspired by what he saw on a napkin during a United Airlines flight just the week before. It read, “Planes change, values don’t. Your priorities will always be ours.” He also remembered seeing employees of the Ritz-Carlton hotel with similar cards several years ago. He believed communicating the values outside the company would help them to be viewed in a positive light.

Living the values. Jerry realized that simply having a list of values wouldn’t do anything. The values had to be put into action. How could he use them to guide the purpose and objectives of the organization? He wanted the values to belong not only to the leadership team, but to be lived by the employees who made up the organization. He wanted these values (that enable the vision and strategic direction) to be the focus and drive for their decision-making process. They needed to represent a consistent message about who and what they were, and how they developed products and services to meet customer requirements at the best possible prices. He was sure this would create a clearer sense of direction, even though his strategic initiative was on hold.

He started holding contests to recognize those employees who could best explain how they lived by the company’s values. This helped keep the values alive and at the same time facilitated employees in understanding what was important to the organization and their role in it. The stories about these employees were posted in the lobby and the lunchroom and encouraged others to enter their own stories about how the company values influenced their lives. He did have to watch out for any employees trying to game the system by examining how the stories tied to actual business decisions.

Monitor how the people in organization perceived leadership intentions. Because Jerry’s employees had all participated in defining the company vision, listing its values, and practicing them, he wanted to ensure that the message stayed clear and consistent. He also wanted to build on this momentum to move the organization toward its vision.

The contest and the subsequent posting of employee stories ensured that there was no gap between his interpretation and his employees’ interpretation; it allowed them all to clarify, articulate, and internalize the beliefs. Additional insights and actions also reflected the kind of organization they wanted to build and how the employees perceived leadership intentions.

Although the strategic initiative itself was on hold, Jerry realized that the adoption of the company values by the employees was the first step toward building the company vision on these values.

His next challenge: How to bring about a mindset of innovation to the organization. What would you recommend that he do?


About The Author

Akhilesh Gulati’s picture

Akhilesh Gulati

Akhilesh Gulati has 25 years of experience in operational excellence, process redesign, lean, Six Sigma, strategic planning, and TRIZ (structured innovation) training and consulting in a variety of industries. Gulati is the Principal consultant at PIVOT Management Consultants and the CEO of the analytics firm Pivot Adapt Inc. in S. California. Akhilesh holds an MS from the University of Michigan, Ann Arbor, and MBA from UCLA, is a Six Sigma Master Black Belt and a Balanced Scorecard Professional.


Pandora's Box

Well, Akhilesh, you really opened it: Shakespeare would have probably re-worded the dilemma: "to be and die or to change and survive?". Mother Nature has no doubt, instead. Thorwald Dethlefsen writes that any crisis is a sign of malady, and that it has to be used to cure the living being; malady is no sin according to him, but a sign, a warning. Not naturally but culturally, people resist change, and most Change Management philosophies are all but effective: as I commented to Bill Lee, we must be one-to-one, peer-to-peer with our people, and run the same path to Change. If the Top doesn't SWEAT TOGETHER WITH the Bottom, there'll never be nor change, neither Improvement. Thank you.