By Tim Mead, Managing Director, Gustin Partners

Two of the best leaders for whom I have worked in the past made no secret of the sources of their success in building substantial businesses. One called it a framework of excellence, the other core values.  In both cases, what they really created were mini-operating manuals for their managers and employees—ones that could be internalized, accessible at any time and in any situation.  Their very existence allowed for front-line decision making, rarely second guessed and for an efficient management/overhead structure. Adherence to the manuals usually produced desired results—both at a corporate level and a personal one. Deviation from them led to disappointment—failure to win an order or, worse, failure to deliver on one. 

What brings these leaders—Norman Cahners, founder of Cahners Publishing Company (which became Reed Business Information); and Jim Sims, the first CEO of Cambridge Technology Partners—to mind are a flurry of published articles and interviews  with some newly installed chieftains of Global 1000 enterprises and some increasingly visible leaders at startups where the subject of values consistently breaks through. All are coping with rapid changes to their external and internal environments; most see values, or some near relative of them, as a means of survival.

For example:

• Antony P. Jenkins, the new CEO of Barclays, has wasted little time in attempting to overhaul the culture of the 139,000 employee- bank besmirched by the LIBOR scandal and other transgressions. He has a new purpose for the institution: “Helping people achieve their ambitions – in the right way.” It’s supported by a set of values and behaviors that one would hope to find on paper (if not in practice) at most companies: Respect, integrity, service, excellence and stewardship.
• Virginia (Ginni) Rometty, CEO of IBM, is embracing a new mantra at the $105 billon technology giant: “Continuous transformation.”  The phrase, she asserts, speaks to the aspiration of IBM’s 434,000 employees to be essential to each of the company’s vital constituencies.
• Robert LoCascio, CEO of LivePerson, a $160 million (revenues) cloud-based supplier of customer interaction services to enterprise clients, threw out all but two core values in deciding how to keep his NYC headquartered company from being strangled by middle management: “Be an owner and help others” guide its 750 employees.
• Dr. John Noseworthy, the CEO of Mayo Clinic, gears the world’s largest physician-led group practice of medicine supported by research and education with but one core value: “The needs of patient come first.” While easy to remember for Mayo Clinic’s 58,000 employees, the value undoubtedly is one of the most challenging to uphold in caring for more than a million patients annually.
• Kris Duggan, the CEO of Badgeville, runs the supplier of game-based programs for enterprises on five values: Working as a team; delivering customer success; being ambitious; personal development; and having fun. “We look for people who just get stuff done,” he told the New York Times in a March 2013 interview. There’s a lot for the company’s under 100 employees to do, serving a growing list of  customers in almost two dozen countries as enterprises embrace gamification applications.

As impressive as the ethos of any such company appears, a leader should avoid the temptation to copy-and-paste its values to his/her own circumstance. Instead, one should do the work of a real leader—get out of the office, factory, R&D lab, corporate jet, etc. and learn firsthand what key constituencies value most, then distill the new-found knowledge into no more than a half-dozen value points to emphasize.

The process obviously isn’t as simple as described. A good leader obviously should engage—though not necessarily assign—colleagues in his/her value quest. And one has to do some legwork to figure out what exactly to probe when interacting with constituencies. Spending some time with business-school faculty and various domain experts is a recommended first step, as long as the temptation to hire a professor to lead the project is avoided at all cost.

Avoid dumping the values-building project on the HR function, as well. If one has to assign it anywhere, give the challenge to the Sales function. Besides being in constant touch with customers and prospects—great sources of insight for what values matter most in the market—the sales function is much less likely to choose fairy-tale-like virtues by which to live. 

Once a satisfactory number and variety of inputs is collected from one-on-one and one-to-group conversations with constituency members, the task is multifaceted: prioritize, categorize and authenticate. Important values likely will be those that are most enduring. Logic dictates separating values into an internal cluster (often the most appealing aspects of your company to prospective employees) and an external group (often descriptive elements of a value proposition to clients/customers).  And throw out any and all proposed values that don’t ring true.

Creation of a set of core values is no guarantees of success—particularly if the values grow stagnant, out of touch with external and/or internal forces shaping them. So they have to be diligently revisited and revised from time to time—with the same vigor and discipline that shaped them from the outset—to insure greater chance of thriving in an ever changing business climate.

Adherence to values of course is a prerequisite. If communication, respect, integrity and excellence were followed by the leaders of Enron as diligently as they described those values in the company’s 2000 annual report, who knows what might have been?

But even having the “right” values isn’t always enough. Teamwork, honesty, accountability and respect for the individual—all worthy values—weren’t sufficient to create an environment of innovation and involvement to the degree that allowed Digital Equipment Corp. to survive as a separate entity.

Without a genuine value system, however, the chance of failure is high…very much so.

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Tim Mead is a managing director of Gustin Partners. He is responsible for major client relationships and engagements across the spectrum of the firm's services, with a concentration on client companies in the professional services, media, communications services and advanced information technologies sectors.