Living Our Values

“Most business problems require common sense rather than legal reference. They require good judgment and honesty of purpose rather than reference to the courts.” Edward N. Hurley

My most recent missive included survey data stating business leaders are viewed poorly by a large majority of its surveyed population [see “Business has a PR Problem”]. That same essay argued that those perceptions are not consistent with the economic and social benefit produced by American business. It concluded by suggesting that business leaders could more actively affect the public’s perception about the good that results from American businesses.

While in the long term this might prove correct, those negative survey results are fueled by such things as the recent United Airlines forcible removal of a passenger and the massive opening of fictitious bank accounts by employees of Wells Fargo. Such occurrences materially undercut the good work that is done by so many employees at the companies. It also highlights how easy it is to adversely impact public perception. I believe that these occurrences have their root in incentives. There is a likelihood that employee incentives are aligned more with profit making than they are with the values that the companies state as their guiding principles.

Every company has a culture. That culture is determined through the actions of its employees and by the governing principles established by its leaders. Typically, that culture is guided by a set of values that are intended to establish norms of behavior. The leadership team agrees on a “mission statement” that is then implemented through a statement of values or guiding principles. It is common to include words like “customer focus,” “integrity,” “humility,” “respect,” or “responsibility”. In fact, United Airlines has a statement on “Customer Commitment” that became effective March 13, 2017 – approximately three weeks prior to the date when United Airlines received adverse publicity for forcibly removing a passenger from a flight.

United Airlines states that “our goal is to make every flight a positive experience for our customers. Our United Customer Commitment explains our specific service commitments so that we can continue a high level of performance… [and] explains our policies in a clear, consistent and understandable fashion…” Among the guiding principles United espouses is one that states the company will “treat passengers fairly and consistently in the case of over-sales.” Obviously, there was a huge disconnect between what transpired on April 9 with respect to Dr. Dao and the way United Airlines’ employees acted that day. (Note: My objective is not to single out United Airlines or Wells Fargo, but to use these actual occurrences to make a larger point about living your values. It is every CEO’s nightmare that actions will be taken that substantially and negatively affect the reputation of the company over which they preside. None of us are immune to the possibility.)

I do not believe enough attention is given to those values that are critical to building the culture for which a company wants to be known. Yes, there is often a strategy session devoted to their development. Perhaps there is money spent on consultants to help author those values. But once created, what action is taken by the leaders of a business to inculcate those values into the very being of the company? Are employees rewarded for behavior that is consistent with those values? Do bonus plans and employee reviews take the company’s values into consideration? When considering a thorny issue as to what action to take or what decision to make, those values should be the basis from which an answer is derived, when an obvious answer does not immediately present itself.

The individual “on task” should be determining their course of action by reference to the question: how would our guiding principles or values require me to act? For this to occur, all employees need to know and understand those values. They should be empowered to act in accord with them. What occurred on Flight 3411 certainly is not consistent with the commitment to “Treat passengers fairly and consistently in the case of over-sales.” My view is that the huge public relations backlash sustained by United Airlines, and the likely material financial cost resulting from this misguided behavior, could have been avoided if its employees clearly understood the commitment it makes to each passenger, and if those employees had been clearly instructed in the need to have those commitments guide their decision making and action taking.

We tell employees, customers, partners, investors, and other third parties that we are a “values based” organization. That can only be true if we live up to that statement and, we can only live up to it if every one of our colleagues knows our values and understands them. Each of us needs to commit to acting in accord with those values. Each must be given the authority to adhere to them in times when ambiguity or uncertainty are present. Values should be accorded stature in compensation structures. They should not be subordinated to the pursuit of company profitability. Systematic steps need to be adopted to ensure each employee understands the company’s values and is committed to acting in accord with them.

It seems to me that we can all do well by doing good.

By Stan McCammon

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of JGC

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