It all starts with leadership

Leaders are not only the source but also the most important means of establishing organizational values. Leaders not only set direction for the organization, they also establish the means to achieve the goals. These represent the beliefs and behaviours that can not be compromised for the sake of results. It is through this handle of values that leaders shape people’s behaviour and build organizational culture.

For example, Masaru Ibuka, the founder of Sony, had spelt out his ideology during 1946 – long before Sony had made its first profits, as teamwork, technological innovation, ethical and fair practices, and emphasis on ability and performance. This ideology had driven Sony for no less than three decades.

Creating common understanding

Putting the values in writing is important and more important is to create common understanding of the values in the organization. Leaders must clearly communicate why the value is important for achievement of goals. In other words leaders clarify the meaning of the quoted values for the organization. J&J credo says service to customers is their top priority, even ahead of their shareholders. The credo statement clearly articulates organization’s responsibility towards each of the stakeholder.

Enabling and encouraging people to live by values

Leadership must very clearly specify the positive behaviours and negative behaviours with respect to the values and must put in mechanisms to encourage positive behaviours. The legendary Jack Welch’s story of linking individual performance with compliance to organizational values is well known. At GE he said that there is always a second chance for people who acted according to GE values and yet could not deliver the results. And those who achieved the results by exhibiting positive behaviours with respect to values are people who go up the ladder. Decision was equally easy with people who could not deliver on either aspects – they had only way to go – out. Difficulty was with people who delivered on performance but not believing in GE values. Such people would be warned to mend their ways and if they still persisted with their old behaviours, the direction for them was the same – out.