Business planning emphasizes strengths, weaknesses, opportunities and threats. A Vision and/or Mission are standard fare. However, the most meticulous strategy plan can still derail without the guidance of core values. They are the standards for behavior that define your culture. Defining core values is a critical step. From there, the real work begins.
Two high profile cases offer classic examples. Both companies have carefully crafted value statements. The difference in outcomes lies in leadership walking the talk.
Case #1: Johnson & Johnson Value Statement
We believe our first responsibility is to our doctors, nurses and patients, to mothers and fathers and all others who use our products and services. In meeting their needs, everything we do must be of high quality.
The Tylenol poisoning deaths that occurred in the Chicago area proved to be regionally isolated. Johnson & Johnson’s management took no chances and immediately recalled all product from all store shelves nationally. They acted instantly in accordance with their values. If their statement read our first responsibility is to our shareholders, we might have seen a more short sighted response. Strong adherence to values simplified their decision and not only preserved but strengthened their brand.
Case #2 Arthur Andersen Value Statement
We believe in integrity, respect and always speaking as one firm. We believe in maintaining a passion for excellence in people, service and innovation. And we believe in demonstrating a commitment to personal growth through training and development. In fact, these values are minimum standards for anyone within our organization. Each has roots in the thinking of Arthur Andersen himself. And each guides us toward a brighter future ahead.
Andersen has become an easy target. But, there are lessons to be learned. Integrity was their number one stated value. At some point, integrity was replaced by greed. Andersen developed a cavalier consulting arm to design and build businesses, while its other arm audited those businesses. They successfully lobbied to prevent legislation to limit such conflicts of interest. Are these the actions of an organization that stands for integrity? We witnessed the results, a values domino effect. In contrast to Tylenol’s customers, Andersen clients rushed for the exits, never to return.
Impact on Customers
Who is the number one over-the-counter pain relief brand today?
Who has fallen from Big Three Accounting status?
How did the adherence to core values contribute to each scenario?
Are core values just for big companies?
If you are a restaurateur, what happens when an expensive cut of meat accidentally falls to the floor? What if it was the last serving? Do you maintain the same standards for meat in the kitchen as you do for spoons in the dining room? Core values cannot be conditional.
You are a manufacturer and are potentially late with an end of month delivery. Defective product is discovered as the truck is being loaded. What do you do? Prioritized values provide your people with the answer. If you have institutionalized your values, executive involvement is unnecessary.
What are your organization’s values?
If your business plan was written primarily to impress your bankers and investors, a values statement is likely missing. If you need to check to find out, it might just as well be missing. If your core values are not communicated and understood by all, what are your criteria for decisions in times of crisis?
Sustained Success and Values Driven Leadership When a crisis occurs, your success depends on your people’s ability to make prompt decisions. Will you prosper like Tylenol or collapse like Andersen? Does your organization possess both the values and character it will need in time of crisis? Your customers will sense the strength of your leadership and quickly respond either with deeper loyalty or permanent departure.