I know, and so do you, countless companies that set financial goals and develop strategies to achieve those goals with their beliefs about execution securely insulated inside a financially driven bubble. When numbers rule, aligned cultures are assumed into existence.“Of course, our people will do it. How can they not buy into the unarguable truth of the numbers?”

Some people do, in fact, react well in a numbers driven culture. Most, however, don’t. Most people need more substance beyond numbers in order to produce great numbers.

It’s imperative that sustainable, high performance companies adhere to a set of Values (to which people are held measurably accountable) that are comprised of both moral guidelines and customer experiences. That mixture of Values can define the context in which high performing cultures can form, thrive and have the potential for brilliant execution of strategies and goals that align with your chosen Values.

Wells Fargo Bank, Volkswagen, and if you want to go back in time, Enron are good examples of misguided, numbers driven organizations. They all tried to execute ambitious strategies, while believing that the appeal and need for material wealth could overpower the cultural conflicts that would ultimately rise up and destroy their reputations, diminish their earnings, reduce shareholder wealth, and in the case of Enron, destroy the company itself. And all three got away with it for years before they were exposed, had their ill-gotten gains and then some erased in a media dramatized heartbeat.

In the final analysis, it is people that believe, conceive, execute and create results.    

In the absence of having a healthy, balanced culture, sustained high performance is impossible. Paying attention to that foundational element does not diminish the importance of numbers. It actually increases the possibilities for you to set and achieve ambitious goals. At AXIES GROUP, we spend a lot of time developing ways to help companies set that course.  Numbers are a way to keep score. They are not the game itself.

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A value suspended can become a hurricane whose damaging force wreaks havoc for years.

Here’s how one company experienced that reality. 

Their strategic objective:Aggressively increase revenue by cross selling existing products to current customers who do not know about those products.

Underlying logic:It is easier, more cost effective and profitable to sell products to existing customers than it is to pursue new customers. Cross selling to existing customers deepens relationships and increases customer life cycles. Trust is already established; the selling cycle is shorter.  

Execution tactics:Mid-level personnel will become the sales force for the cross-selling initiative. They are already here, have some knowledge of the products to be offered and can get up to speed faster than new employees. Give them extremely ambitious sales goals and lean hard on them to achieve those goals – by any means necessary. Do not accept any excuses for failure. 

Applicable Company Values:

• What’s right for customers.We place customers at the center of everything we do. We want to exceed customer expectations and build relationships that last a lifetime.
• Ethics.We’re committed to the highest standards of integrity, transparency, and principled performance. We do the right thing, in the right way, and hold ourselves accountable.

How to connect and weave those values into the execution of the strategy. Ignore them. They are an impediment.Revenue and earnings – increasing shareholder wealth are all that matters.  

Welcome to Wells Fargo Bank.

Could they have adhered to their stated values, executed their strategic objective, achieved their goals and reaped the intended rewards? Of course. But more slowly. Their employee training investment to properly sell the products would have been greater. Perhaps they were blinded by the need for speed. If so, their experience taught all of us a graphic lesson about what happens when your strategies and your values are not aligned. The whole world can see that the long-term cost of doing it right is a small fraction of the horrendous financial and opportunity cost, and the cultural destruction that results from doing it wrong. Wells Fargo is still experiencing those costs and that destruction. Five thousand people fired – needlessly. $3 billion in hard-dollar costs – more to come. A government-imposed moratorium on growth until they get their house in order. The list goes on. 

Wells Fargo was not the first. They won’t be the last. Their experience begs these questions. What would it take to live our values all the time? How will living our values impact the creation and execution of our strategies?Apparently history is not an effective teacher.  

More on the alignment of values and strategy in upcoming blogs. 

By Bill Leider, Managing Partner, Axíes Group

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The impact your values have on your business and your leadership is pervasive. It’s incalculable. The values you choose to live define you – visibly and subconsciously – whether you know it or not and whether you believe it or not. Harnessing the power of values is fundamental to the quality of your leadership and the sustainability of your success.

How Our Values Are Tested:

Adversity, the crisis of the moment, short-term needs that conflict with your vision and your long-term objectives test the validity of what you say are your values – those lofty words on wall plaques – intended to define you, but too often turned into the basis of public anger  when a few people clearly march to a different drum beat. When that happens, oftentimes some bad PR makes people wonder whether you are apologizing for your behavior or for getting caught.

Five Reasons We Fail:

Here are the primary reasons why our (supposed) values fail us. Actually, my title has it backward. Our values don’t fail us – we fail them. What makes us believe that we have certain core values and that we faithfully live them – except when we don’t?

1. We don’t hold people (including ourselves) measurably accountable for living them – and there are no consequences for not living them, even when everyone sees that our failure has caused significant consequences.
2. We live our values situationally. We choose when they apply and when they don’t. When we do that, those proclaimed beliefs are no longer our values – they are our strategies.
3. We apply our values selectively. Some people are held accountable; some are not. When that happens, we become hypocrites in the eyes of others. The price for hypocrisy is the loss of trust. Do you trust hypocrites?
4. There is a lack of constant awareness on the part of too many people as to what our values are, what they mean and how they must permeate everyone’s behavior all the time, in every interaction, under all circumstances.
5. We live them conditionally – I will honor my values ONLY if you treat me that way in return. When that occurs, what happens is that other people control our conduct – we are actually living THEIR values, not our own.

What you can do:

If you haven’t already done so, put your intended values in writing. Define them as you interpret how you want to live them. Then, begin conversations with your people at all levels. Ask them if they think that those are the values you actually live every day. And ask them if they believe that everyone is held accountable for living them; and what happens when people don’t live your stated values.

If there are no surprises, congratulate yourself; you’re in a small minority of organizations. On the other hand, there’s a good chance that your people are telling you what they think you want to hear. Then what?

I will address all of these elements and how to deal with them in more detail in the continuing series. I’ll start by giving you some ideas about how to create a culture of accountability. The approach may surprise you. Stay tuned.

Bill Leider

Bill is a Managing Partner at Axies Group – a consulting firm, focused primarily on helping leaders develop Balanced Organizations, focused on Vision, Values, Values-driven leadership, Culture, Strategy and Greater Purpose. Clients range from Fortune 500’s to mid-size companies to start-ups in many industries He has also been the CEO of both publicly held and privately owned companies. His book: Brand Delusions looks at Brands from a holistic perspective and has been critically acclaimed. You can learn more about him at: www.axiesgroup.com.

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