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Leadership and organizational values

“Organizational values” is an over used and perhaps an abused term in companies across the world. You find a well decorated and eye catching board carrying values statement or credo statement in every executive’s room and at many prominent places in a company. Why are values so important and how are they useful for the organization?
Why are values important?
Values signify the principles or moral standards of a person, group or organization that are considered to be valuable or important. Values are basic beliefs and convictions which govern
behaviour of people in their work, dealing and decision making. But is it sufficient? Is the leadership role limited to facilitating the process of strategic planning in an organization?

Organizational values establish standards of behaviour, which serve to encourage or discourage certain behaviours. In other words organizational values help people to identify priorities at workplace.
It all starts with leadership
Leaders are not only the source but also the most important means of establishing organizational values. Leaders not only set direction for the organization, they also establish the means to achieve the goals. These represent the beliefs and behaviours that can not be compromised for the sake of results. It is through this handle of values that leaders shape people’s behaviour and build organizational culture.
For example, Masaru Ibuka, the founder of Sony, had spelt out his ideology during 1946 – long before Sony had made its first profits, as teamwork, technological innovation, ethical and fair practices, and emphasis on ability and performance. This ideology had driven Sony for no less than three decades, when it was rephrased by Akio Morita.
Creating common understanding
Putting the values in writing is important and more important is to create common understanding of the values in the organization. Leaders must clearly communicate why the value is important for achievement of goals. In other words leaders clarify the meaning of the quoted values for the organization. J&J credo says service to customers is their top priority, even ahead of their shareholders. The credo statement clearly articulates organization’s responsibility towards each of the stakeholder.
Enabling and encouraging people to live by values
Leadership must very clearly specify the positive behaviours and negative behaviours with respect to the values and must put in mechanisms to encourage positive behaviours. The legendary Jack Welch’s story of linking individual performance with compliance to organizational values is well known. At GE he said that there is always a second chance for people who acted according to GE values and yet could not deliver the results. And those who achieved the results by exhibiting positive behaviours with respect to values are people who go up the ladder. Decision was equally easy with people who could not deliver on either aspects – they had only way to go – out. Difficulty was with people who delivered on performance but not believing in GE values. Such people would be warned to mend their ways and if they still persisted with their old behaviours, the direction for them was the same – out.
Most critical aspect – walking the talk
No matter how genuine and moral your values be, no matter how well articulated your values be, no matter how you well you communicate your values, as leader, what really matters is how you behave. People see, believe and do what you do, not what you say. However well articulated and publicised youe values might be, it is only when people see their leaders "living the values", do they understand the spirit behind and understand the significance of values in the game plan of the company.

Ability to "walk the talk" is ultimte test of leaders' character. As the famous Hewlett-Packard story demonstrates role-modelling behaviour by its co-founder Bill Hewlett, when he broke open a lock put on a store room and placed the lock with a short note on the manager’s desk. The note read that locked store rooms do not reflect the HP value of respect for employees.

It is through such exemplified role modelling behaviour that leaders create leaders at all levels which are in fact the extension of their own personality. The philosophy of leaders thus becomes a way of life for the organization. This is what differentiates winning leaders from the rest.

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