In the latest HBS Working Knowledge, Rosabeth Moss Kanter makes the case in SuperCorp: Values as Guidance System that an organization’s strategy is best steered by establishing a clear and committed foundation of values. Organizational commitments to a way of being, not the meaningless kind that sit flat on the wall plaques in most of corporate America.
For vanguard companies, grounding strategy—which businesses to pursue and how—in a sense of wider societal purpose provides many significant advantages and only a few potential disadvantages. Values and principles of this sort not only speak to high standards of conduct but also stretch the enterprise beyond its own formal boundaries to include the extended family of customers, suppliers, distributors, business partners, financial stakeholders, and the rest of society. Vanguard companies gain both a moral compass and an entire guidance system. The range of advantages for vanguard companies through their strategic use of values and principles include the following.
- Competitive differentiation
- Public accountability via end-to-end responsibility.
- Common vocabulary and guidance for consistent decisions.
- Talent magnets and motivation machines
- “Human” control systems—peer review and a self-control system.
Kanter’s book, which I have not yet read, speaks to an approach dear to the perspective I’ve worked toward accomplishing for at least a decade. The book title does not emphasize this orientation to strategic guidance: SuperCorp: How Vanguard Companies Create Innovation, Profits, Growth, and Social Good.
But we know living our organization’s values is what keeps us on track toward the social good part. Do we know how to profit from strategic values guidance?
Yes we do. In the nearly 10 years since my dissertation research on “Embedded value in process and practice” I have continued to develop research on the organizational commitment to a strategic perspective, not HR perspective, on organizational values. In the recent article:
Jones, PH. (2008). Socializing a knowledge strategy, In E. Abou-Zeid (Ed.) Knowledge Management and Business Strategies: Theoretical Frameworks and Empirical Research. Hershey, PA: IGI.
I concluded with: “Organizational values are institutionalized guiding principles and priorities that influence behavior and decision making. Changing embedded values systems requires identifying the values in-use throughout the organization or the processes of strategic interest. As opposed to changing explicit company “slogans,” the espoused values on a wall plaque, cannot be easily accomplished directly. Consistent with the definition of institutionalization, over time people accept the underlying culture and its values as given. Values in-use might be accessible to intervention if they were not deeply embedded, but they would also be much less powerful in the social functions they also serve, the purpose of orienting action and simplifying decisions based on understood (yet often unexplicated) priorities.
Overt “values programs” and new management systems driven by new managers often fail due to the resistance inherent in deeply socialized, highly stable values systems. Management has a duty to understand the human-organizational system, which compels acknowledgment of existing values orientations that structure power and mediate participation. The article proposes a strategic guidance function that enacts new values through a perpetual organization-wide process, following what I call socialization, a participatory model of structuring decision rights that complements necessary organizational authority by management.
We cannot achieve aspirational “good” organizational values when our activity is based on long-standing values systems embedded in everyday practices, of which we are largely unaware. And while traditional organizational research strongly suggests that values change “starts from the top,” my experience is that organizationally embedded values are propagated through processes at the middle levels, and may differ widely between disciplinary groups and management divisions. That is why they are resistant to change from the top – or bottom levels. Middle-level employees often propagate in the organization for much longer than CEOs as well. When a meaningful value conflict arises, the lifers know they can wait out the disturbance in the values system.
These dynamics are why I suggest socialization is a more effective way to effect values change in the contemporary large organization.