Every Company should have a Mission, Vision and set of Values. Right? Well, yes…. but I want to put a caveat round that.
Let’s start with a news story I saw in January, that announced a certain Bank, under a new CEO’s stewardship, were tightening their Values and asking everyone to re-sign the code of conduct. They even sent a stern worded email that said if people read it and didn’t agree, then they could just leave. Well, that told them! When I saw this on the news I had a wry smile on my face and it made me wonder just how seriously the folks at this particular Bank would take that? If you were given two choices by your employer: 1) Read a document and sign it and receive your bonus or 2) Resign, chances are most of you would read and sign. Regardless of whether you agreed with what the document said, you would do so because, why not?! As long as they’re not asking you to sign away all your possessions (unlike the documents they have their customers sign) then it’s a pretty safe exercise.
So, everyone’s happy. The employees get to keep their jobs and get their bonuses and the Bank gets to show the world how compliant they are and how well they can be trusted because hey, all the employees electronically signed up to 5 new values – respect, integrity, service, excellence and stewardship. And don’t forget, they’ll renew their commitment on a yearly basis!
I’m sorry but I find that hard to swallow.
Now, call me a cynic but I think it’ll take a little more than a bunch of bankers signing a document to have the world trust them again and more importantly to be a catalyst for a fundamental change in behaviour. So many MNCs believe that if they have the right Mission Statement above the door, if they give all employees a Values card and have them electronically sign a document that states what “thou shalt and shalt not do”, then they are covered. As we all know though, unless people see a compelling reason to change i.e. a reward or a punishment then the likelihood is, they won’t change.
So, what could MNCs do to encourage their employees to take these things more seriously and make cynics like me, sit up and take notice? Here are four things:
1. Keep it Simple
Whilst companies should keep it simple, I don’t mean in this case that less is more, in fact they should not be afraid of being too wordy. Quite often, PR and branding companies get paid a fortune for developing campaigns that communicate values, mission statements etc and they generally come up with a couple of words that we find in our everyday vocabulary like “Respect”, “Service” etc. The problem is, what do these words mean? I know the dictionary definition but how I understand Respect is very different from how someone in Singapore may understand it. So, whilst companies should keep it simple, being too simple can actually hurt them.
The best Values / Mission statement I have read is ‘Our Credo’ at Johnson and Johnson, which is not a collection of buzz words and fancy icons but is instead a ~100 word statement that details what it will do for Customers, Suppliers, Employees, the Community and last but not least the Shareholders. This is not simple in the usual meaning of the word, it’s a wordy document, that takes a while to read and more over it was written about 50 years ago! You ask anyone at JnJ about Our Credo and they smile and nod their head in absolute agreement. Employees believe it because they understand it. It leaves nothing to interpretation. That is what I mean by simple. And you need to use more words than less!
2. Link to Performance
The next step would be to measure their employees against the Value criteria. Now, this may be the intention of the Bank I was talking about before (and I genuinely hope it is) but if they have not weaved these values into their performance management system then they have missed a trick. Ensuring that everyone is measured not only on what they deliver but HOW they deliver it is paramount. That means no matter how slick a Sales man (or woman) you may be, if you’re cutting corners or bullying people to meet your targets, then you won’t get the promotion.
I saw this put into practice in GE. Everyone received two ratings that when combined together, gave the overall performance rating for that year. It was equal weighting between performance and values and in fact there was more impact if you got a low Values rating vs. a low performance rating. Now, lots of people have criticised GE for the forced ranking approach that was alive and well in Jack Welch’s time (CEO before the current, Jeff Immelt) and it has softened slightly in more recent years, where the focus is on development rather than punishment but it really made people sit up and take note. This wasn’t just a tick the box exercise, GE didn’t just pay lip service to the values they set out but they made people accountable.
Now, there will be people who disagree with me about how consistently GE applied the performance ratings and that it was all talk and no action but my experience of it was that whilst it may not have fundamentally changed everyone’s behaviour, it made people think twice about what they were doing and made performance reviews a little more meaningful.
3. Create a Meritocracy based on the Values
So, you have spelt out what the Values are and have left nothing to interpretation and you have included them in the performance management system so that all employees are measured on them. Now you need to tie people’s compensation to that performance rating so they get awarded based on their accomplishments and behaviour, as opposed to who they are and how long they have been with the company. This is what we call a Meritocracy. And it’s not a new concept but I am seeing so many organisations not doing this, or should I say, not enforcing their Managers to apply the salary increase in a way that ties to the performance rating. If you want people to sit up and take notice of anything, you need to give them a reason to. You need to reward them or hit them where it hurts and in both of these instances, where people feel that is their wallets. If I’m not getting a raise because I didn’t perform in the right way (regardless of what I did), then I’ll definitely make sure I read the next memo that comes from HR on the topic of company values! I will ensure I know them and demonstrate them regularly.
4. Make Tough Decisions and Act on Them
So, if going through all these measures, there are still employees in the organisation that do not meet the mark, companies need to weed them out. GE did this well: bad performers could not hide and the pressure that comes with underperforming in a company like GE, generally created a scenario where the employee decided it wasn’t the place for them. Rather than the company needing to go through a protracted performance improvement plan and process (which is no fun for anyone involved), it was easier when the employee could bow out gracefully, reputation intact. But it doesn’t always happen that way and it’s down to the Manager and HR to make the decision and then act on it and go through the exit process. This is a necessity if you want an organisation to truly live and breathe the Mission, Vision and Values that it tells the public and shareholders about.
So, I wish the Bank a lot of luck in enforcing its new values and making staff accountable. To truly be an organisation that upholds its values and stays true to the Mission and Vision takes a lot of work, a lot of time and determined individuals. It could be bordering on impossible but even I’m not that cynical…