What are values?

Picture aug 2014I have had some significant meetings recently on and around operational risk, having the fortune to speak with directors about the risks to a business, when interestingly enough the subject moved to conduct risk and the behaviour of staff.

Five years ago if you spoke to most executive boards across the world about operational behaviour or cultural planning or implementation you would probably hear “are these normally reserved for likes of our human resource team”, or “does our brand actually have a vision, mission, values or personality trait.” Generally these discussions are reserved for an alternative agenda, that rarely transpires due to lack of understanding or knowledge in the area of specialism.

As conduct risk and culture are now entering a new era of board discussion and to use it to make a positive change to an organisation, we have to study values. Values are a company’s most important basis for what a company represents, what they want to accomplish, commit to and how they want to behave.

When we live out our values, we commit our actions to the important matters of ethics, integrity belief and commitment. Ideas like “individual character” are built around deeply held values, and the meanings and worldviews associated with them. When we talk about good societies and democratic politics, we’re always talking about culturally held, and shared, values and worldviews.

Worldviews are sets of beliefs about ‘how things work,’ ‘how life is,’ and ‘what’s objectively important in life.’ When we talk about cultural differences across nations (or subculture differences within a country), the core of those differences often grows out of particular values and worldviews held in common within a people, or an ethnic group, not just the way they dress and talk, or quaint customs.

Values are the deepest and slowest-changing indicators we can measure with surveys, and worldviews are almost as deep, while attitudes and opinions are closer to the social surface of life, more superficial, labile and faster to change. Values and worldviews are said to be ‘deeper’ when they are part of who we think we are, are more strongly held, matter more to how we live our lives, and are more a part of our personal ‘systems of meaning and important life priorities’. The more we believe that our ideas, beliefs and opinions are ‘who I am,’ the more tightly we hold onto them.  Not only are they slower to change, but when change comes, it is rather like a ‘conversion experience.’

Values are deeper and slower changing than attitudes and opinions, which change rather fluidly as new information, many aspects of attitudes and opinions are psychological: emotional or cognitive, but they too may be filtered through a heavy cultural framing. The ones that stick become incorporated in worldviews.

So exactly how can culture’ help plan and shape a company to improvement and increased performance?

Below is a study from Kotter & Heskett’s Landmark ‘Corporate Culture and Performance,’ Across 207 large U.S. companies in 22 different industries over an Eleven-year period

Kotter & Heskett
Revenue Increase Stock Price Increase Income Increase ROI
Improvement from managing change 166% 74% 1% X%
Improvement from managing culture change 682% 901% 756% X% x2