Lapin International

Impotent Values and Imploding Cultures

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Published by David Lapin under Uncategorized

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November 27, 2011

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4 comments

We’re in crisis. We know this: economic crisis, social crisis and political crisis. Most of all, we are in a crisis of values. Not that people today don’t have values or have bad values. This is not true. People today, young and old, have surprisingly good values. Pretty much all of us believe in good things and want them for our children and our children’s children. So where’s the crisis?

The values crisis is not that we don’t have good values, it is that our values have atrophied; they have become impotent and irrelevant to our daily activities and choices. They do not manifest in the business cultures we craft, in the educational and other institutions we build or in the day-to-day economic decisions we make.

Take a closer look at business and business cultures, and consider how often organizations who believe in and espouse great values don’t come close to living them. Executives might spend long hours and large amounts of money articulating their companies’ values and enshrining them in lofty mission statements and bureaucratically verbose codes of ethics. Enron had a good set of values and a perfectly good code of ethics. I am sure Bernie Madoff believed in good values too.

The gap between a person or an organization’s values and their actions does not always manifest in criminality. Mostly, it just manifests in a massive disconnect that undermines the person or organization’s integrity and effectiveness.

The Deloitte’s 2010 Ethics and Workplace Survey highlights the values vacuum in business cultures:

One-third of employed Americans plan to look for a new job when the economy gets better. Of this group of respondents, 48 percent cite a loss of trust in their employer and 46 percent say that a lack of transparent communication from their company’s leadership are their reasons for looking for new employment at the end of the recession. Additionally, 65 percent of Fortune 1000 executives who are concerned employees will be job hunting in the coming months believe trust will be a factor in a potential increase in voluntary turnover.

The reason for this trust-implosion is not that corporate leaders are personally untrustworthy or dishonest. The reason is that they see business only as a process of meeting investor demands for growth of short-term returns, and not also as a place to develop human character and make a meaningful difference to the lives of its customers and other stakeholders. Unintentionally, business leaders often create cultures of fear, motivating people by reward and consequence rather than inspiring them with meaning, purpose and principles.

The Economist (September 24, 2011) reported on the Boston Research Group‘s National Governance, Culture and Leadership Assessment based on a survey of thousands of American employees, from every rung of the corporate ladder. It found that 43% of those surveyed described their company’s culture as based on command-and-control, top-down management or leadership by coercion. The largest category, 54%, saw their employer’s culture as top-down, but with skilled leadership, lots of rules and a mix of carrots and sticks. Only 3% fell into the category of self-governance, in which everyone is guided by a set of core principles and values that inspire everyone to align around a company’s mission.”

Furthermore, it seems that command and control cultures breed unethical conduct and damage innovation:

Nearly half of those in blind-obedience companies said they had observed unethical behaviour in the previous year, compared with around a quarter in the other sorts of firm. Yet only a quarter of those in the blind-obedience firms said they were likely to blow the whistle, compared with over 90% in self-governing firms.

More than 90% of employees in self-governing firms, and two-thirds in the informed-acquiescence category, agreed that “good ideas are readily adopted by my company.” At blind-obedience firms, fewer than one in five did.

Perhaps the most serious aspect of the study is that bosses and HR professionals are often out of touch with the cultures they are building:

Bosses are eight times more likely than the average to believe that their organisation is self-governing. (The cheery folk in human resources are also much more optimistic than other employees.) Some 27% of bosses believe their employees are inspired by their firm. Alas, only 4% of employees agree. Likewise, 41% of bosses say their firm rewards performance based on values rather than merely on financial results. Only 14% of employees swallow this.

Here again, the reason for these broken cultures is not that the leaders of these organizations are tyrants in their personal lives or believe that motivating people with fear is the way to get the best out of people. It is just that many people fail to integrate their personal values and beliefs with the way they operate at work and in their businesses.

Recognizing this and the vast amount of value lost by this modus-operandi drove me to write Lead By Greatness, a book that shows leaders how to use their personal greatness of character (which most of us have) as a leadership tool and a way to unlock value.

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  • shawmu

    David,
    This is an important topic that historically has been re-prioritized repeatedly by too many leaders with authority. And placed in from of it are items that give immediacy to action and quite possibly results. Our bias for the need to see what’s changing – P/E ratio, ROI, ROE, budgets – is blinding us to nurture the vital elements that sustain the relationships necessary for those tangible results.

  • shawmu

    David,
    This is an important topic that historically has been re-prioritized repeatedly by too many leaders with authority. And placed in from of it are items that give immediacy to action and quite possibly results. Our bias for the need to see what’s changing – P/E ratio, ROI, ROE, budgets – is blinding us to nurture the vital elements that sustain the relationships necessary for those tangible results.

  • http://LeadByGreatness.com David Lapin

    Thank you for that, Shawn, you are so right. On the other hand we like to demonstrate to leaders the correlation between human greatness in leaders and economic outcome – this helps make it urgent for them and helps them justify the time and expense entailed in investing in themselves and their people. I believe that qualitative inputs are beyond measure, but there are always ways to measure at least part of the quantitative output that results. What do you think?

  • http://LeadByGreatness.com David Lapin

    Thank you for that, Shawn, you are so right. On the other hand we like to demonstrate to leaders the correlation between human greatness in leaders and economic outcome – this helps make it urgent for them and helps them justify the time and expense entailed in investing in themselves and their people. I believe that qualitative inputs are beyond measure, but there are always ways to measure at least part of the quantitative output that results. What do you think?

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