Day: October 20, 2016
Walking the Talk-Aligning Core Values with Practices
Posted or Practiced?
I have frequently walked into organizations and seen corporate values posted on the walls. In churches, nonprofits and businesses, they are displayed prominently for public viewing. Unfortunately, many of those same organizations are also rife with mistrust, backbiting and ethical breeches, which cause them to operate in a legalistic, contractual manner.
This doesn’t mean that we can or even should eliminate the use of contracts. Our modern world sometimes demands that contracts be used as a standard part of doing business. But this still doesn’t justify operating in a strict contractual manner.
Purpose of the Contract
For a contract to work well it requires an assumption of good faith and trust among the people involved. That good faith is based on some underlying values such as integrity, cooperation, a sense of common purpose and respect; values that are shared and therefore central to relationships. We stress the importance of these virtues in nonprofit and church leadership consulting alike.
Walking the Talk
Of course, it will not do simply for organizations to have stated values. There must be alignment between those values and the daily practices within the organization. That alignment is the responsibility of leaders. In fact, misalignment between values and practices often is where the seeds of an ethical breach take root and the covenant begins to be broken. That’s why leaders must assume responsibility for ensuring that relationships are respected and core values are aligned with practices daily. As strategic planning consultants we frequently counsel clients on the importance of this alignment.
Lessons From Enron
Consider the case of the Enron Corporation. Boldly stated in their company literature were their core values of Respect, Integrity, Communication and Excellence. No doubt, when these values were developed they were intended to guide their company’s operations. However, at some point something caused the company decision makers to operate quite contrary to the stated values.
Even as the company was deteriorating, the founder and corporate chairman, Kenneth Lay, continued to tout those values and encourage people to buy Enron stock. In fact, at the same time he was telling employees that the stock was an “incredible bargain,” he and about two dozen senior executives were cashing in more than $1 billion worth of that same stock. Two days before filing bankruptcy, Enron gave $55 million in retention bonuses to “key managers,” yet they refused to provide severance pay to the 4,500 employees they laid off of work.
The Cost of Values Not Upheld
In total, the company’s indiscretions caused 15,000 employees to lose $1.2 billion, and the CFO alone to be charged with 109 counts of fraud, money laundering, conspiracy and obstruction of justice. Eventually, in May of 2006 the late Ken Lay was convicted on all six counts brought against him including conspiracy to commit securities fraud. Likewise, CEO Jeff Skilling was convicted on 19 counts of conspiracy and fraud.
Clearly, the courts determined that the misalignment of Enron’s values with its practices was a leadership responsibility. They had failed and eventually violated the law and they were held accountable. Had the Enron executives taken their stated values more seriously and aligned their practices with those values, there would not have been an ethical breach of the covenant that was implied in the values they publicly stated.
