In the current environment, as we navigate the impacts of COVID-19, we are also watching in real time as companies make decisions that either reaffirm their corporate values or demonstrate a complete tone-deafness to the needs of their employees and the local communities in which they operate.
We have recently witnessed companies engaging in profiteering or price-gouging, rushing their employees back to work or neglecting to consider employee welfare in strategic and operational decisions. At times like this, we often see both the best and worst of human behavior.
This caused me to reflect on the nature of value-driven leadership. On September 11, 2001, I was walking to work toward the World Trade Center when the planes hit. While my focus was to ensure the safety of my family and find a place to stay, the company I worked for took several steps to ensure the well-being of its employees.
First, it set up a call chain. I received a call from one of the company’s top executives, asking me to check in with him on his personal mobile to let him know that I was safe. Second, in the days that followed, the company set up a helpline to keep employees posted on how the company was managing through the crisis. Third, the company provided flexibility on when to return to work and paid leave until employees were able to do so. Once a semblance of order was restored, free mobile phones were provided to ensure continuous communication, and counseling was offered to employees who needed it. This has stayed with me as an example of how companies can and should rise to meet a crisis.
When faced with risk and uncertainty, companies may reach a point where they have to decide between what is expedient versus what is morally right. In some cases, executives view a certain course of action as economically costly, but that is not the right lens. To paraphrase Peter Drucker (subscription required), while a company needs profit as much as a person needs oxygen, if you think your life is about breathing, you’re clearly missing something.
Why should a company focus on its corporate values? What is the value add? Simply put, a company’s values reflect its culture. If values are absent or opaque, that already communicates volumes on how that company is run and how values are prioritized. Tangible benefits of a focus on corporate values include:
• Risk Mitigation: Values provide clarity in times of crisis. Many experienced executives and business school graduates are familiar with how Johnson & Johnson’s former CEO, James Burke, managed the Tylenol crisis. In brief, in 1982, seven customers died after consuming cyanide-laced Tylenol capsules. Tylenol’s market share plummeted from 35% to 7%. Johnson & Johnson spent $100 million to recall the product and relaunched it in tamper-proof packaging two months later. Market share rebounded to 35% by the end of 1983, and this has since become a high-profile example of solid crisis management.
• Branding: Customers are growing increasingly sophisticated, not to mention vocal, on social platforms. Their perspectives often determine which companies they support with their consumer spending. In September 2015, Turing Pharmaceuticals acquired the American marketing rights to Daraprim. Overnight, the company increased its sale price (subscription required) from $13.50 to just shy of $750, effectively placing the drug out of reach for those who needed it most. The social media backlash was swift and vehement, with Martin Shkreli, Turing’s CEO at the time, rapidly labeled as the “most hated man in America.”
• Talent Attraction And Retention: Similarly, potential hires will look into a company’s reputation and how it treats its employees as part of their consideration on which companies they will join to advance their careers. In light of the COVID-19 epidemic, many are watching closely to see how companies will return to work and focus on safeguarding employees.
Perhaps most importantly, leading by example according to a company’s values provides employees with a sense of purpose (subscription required). This enables values to take on a life of their own — employees understand intuitively how to make the right decision for your company, even without executive guidance.
As executives, how do we make values actionable? Whether you are a global organization leading multiple offices or a startup company looking to strengthen your corporate culture, your approach does not need to be complicated:
1. Conduct an audit. Ask at least five people across your organization (from your executive leadership team down to your line managers) to communicate what your company’s values are. If they don’t have a clear answer without referencing a document, then that tells you there is work to be done.
2. Assess your values. Review your corporate values. Do you see these reflected in your company’s daily operations or through interactions with customers, partners and employees? If not, brainstorm ideas for what this means for your company and how you can strengthen the characteristics you want your employees to embody.
3. Define your messaging by touch point. Examine your website, physical offices, mobile apps, events, marketing collateral, customer service calls and other channels. Every encounter with an external party is an opportunity to showcase your values. While your individual messaging might need to be attuned to who you’re targeting, your values and your overarching message should remain timeless.
Your corporate values should connect your people with a purpose that inspires and engages. They should also embody what your company represents when it is at its best. This is especially true in times of crisis, but it needs to be firmly in place in advance of when it is most needed.
Where are the opportunities to live your company’s brand? What messages do you explicitly/implicitly want to send to your customers, your employees and other stakeholders? Are your corporate social responsibility initiatives aligned with both your values and your business model?
Taking the time to ask better questions will lead you to a clearer answer that is tailored uniquely for your organization.
Published in Forbes.