Register for free to become a member and enjoy access to all HRD content.
Member benefits:
Register below, or sign-in if already a member
In a regular contribution series, Paul Devoy, CEO of Investors In People (IIP) will discuss areas of leadership and people development needed within overall business. In his latest article, he talks about the importance of companies living by their own values and influencing others to do the same.
One of the most important tenets of people management is the principle of leading by example. All too often, business leaders undermine the integrity of their management by failing to live by the v
alues that they have sought to instil across the wider business.
However, before leaders have the chance to lead by example, the actual process of devising and implementing a distinct set of organisational values has been proven to be a powerful driver of employee satisfaction and business performance.
In this context when I’m referring to values, I’m using the definition that in the workplace, organisational values are a guiding set of principles and behaviours that employees can look to when fulfilling their day-to-day functions.
There have been several studies and reports produced which evidence the impact that developing a clear set of internal values can result in industry-leading business performance. One such piece of work conducted by Jim Collins and Jerry Porras showed that companies that focused on cultivating strong values‐driven cultures over a period of several decades were outperforming companies who didn’t by six times. These organisations were duly christened ‘visionary’ by Porras and Collins. These visionaries were shown to outperform the stock market by fifteen times across the period of study which concluded in 1990.
Similar studies over an even longer period of analysis yielded similar results. For example, companies that care for all stakeholders grew four times faster than companies that did not. Indeed, in his book ‘The Culture Cycle’, Anthony Heskett has stated that a company that consistently cares for the development of a values-driven culture can expect an improvement of as much as 30% in its corporate performance.
Finally, research from the Barrett Values Centre, a case study of a company that began to embed values into its business planning in 2005 revealed an increase in revenue per capita of 38% by 2011. This represents a tangible increase in business output as a result of a stronger values-driven workplace culture.
Even beyond the productivity and engagement gains that stem from a values culture, there are myriad day-to-day benefits that an organisation can enjoy. Employees who work in an environment where values are championed are more satisfied. This is largely because when an employee can see how their daily functions feed into the achievement of a broader ambition, they are more likely to work hard to achieve the organisation’s ambition.
My intention with these blogs is to share one of the pillars of IIP’s Standard of good people management and explore it every month. As part of this, I’ve been providing an example of how an IIP accredited company has utilised our advice around the one specific area to improve how their organisation interacts with employees in that realm. However, when looking at the principle of living the organisation’s values, I felt compelled to share IIP’s own internal journey to developing and embodying a set of reflective, meaningful values.
In early 2017, Investors in People transitioned from a government- entity into a Community Interest Company (CIC), with the Department for Education retaining a 49% stake. For myself and the rest of the team, this presented an opportunity to reflect on our past performance and think about the sort of organisation that we wanted to be going forward. For us, it wasn’t a case of gathering our directors into a meeting room and picking some abstract words with which to guide our organisation. We wanted our values to grow organically.
Thus, over a period of a few months, we held several values sessions with the wider team, giving plenty of opportunities for every member of the team to make suggestions as to which values they’d like to see us work by and how these would feed into our broader purpose of creating more good workplaces across the UK.
These sessions culminated in our first Away Day as a CIC in September of last year. Here, the team broke out into groups, with each suggesting their top value out of the list we’d developed in the months prior. We then came together and debated the top choices, distilling them into just five key values to drive our behaviour.
At IIP we are:
I cannot recommend this collaborative approach to the process highly enough. For me, values should not be an artificial list of three or four adjectives that sound good in board papers. Rather, an organisation’s values- journey should involve staff of all levels at all points of consultation. This guarantees that the culture that ensues from these values is reflective of the motivations of the team and capable of delivering real unity.
The development of organisational values must be a bottom-up, intuitive and communicative process, not a top-down exercise driven solely by management. This will directly impact the extent to which employees buy-in to the process of evolving organisational culture. It is then down to leaders to ensure that they are embodying these values and leading by example.