A significant sign of good leadership and good governance is how well your company honors the corporate values set by you and your leadership team – those values that guide culture, product/service development, customer service and how individuals work together internally.
While it’s fairly easy to tell whether or not corporate values are being expressed at the interpersonal and highly visible decision-making levels, it can be difficult to keep tabs on how well they’re being honored within the deeper, inner workings of your company – in the functions that keep it afloat.
Yet staying on top of this is one of the most critical roles you have as a leader, because when those inner workings sneak out of alignment with corporate values, well, that’s when companies get into serious trouble.
This is especially true in relation to a company’s financial and operational functions, where a breakdown can cause serious compliance issues, ethical and legal dilemmas and ultimately harm profitability, sustainability, reputation and decrease the value of the company.
In fact, the concepts of corporate accountability and business sustainability rely heavily on how strongly your company’s finances and operations are driven by core values – and values might even be selected with these critical business functions in mind.
To see how this plays out, let’s use an example of a company with a set of commonly held corporate values: Stewardship, Teamwork, Accountability, Transparency, Safety and Innovation.
If this company pays only lip service to these values (and to go beyond the obvious), its financial department might:
- Take less responsibility for exploring alternative options for funding growth.
- Neglect to set up a system for sharing data with other departments during decision-making periods, resulting in last minute scrambling.
- Stop short of sharing bad news caused by, for example, a mistake made in accounting practices.
Equally, a company that hasn’t actively integrated these values into operations risks finding itself in situations where:
- It’s always a step behind its competition in terms of leveraging new technologies.
- Information and skills are lost because there’s no formal process for knowledge transfer.
- Waste is needlessly created as a result of faulty equipment, lack of systems redundancies and/or employees completing tasks “their own way.”
From these examples you can also see how mixed messages from leadership might be a contributing cause:
They say they value safety, but they talk a lot about speed.
They say they value innovation, but they’re needlessly cutting technology budgets.
They say they value transparency, but employees are chastised for sharing bad news.
No one is being overtly “bad” and indeed misalignment creep can be very subtle. But it’s exactly why such conscious care needs to go into choosing values that truly make sense for the company, its industry and how it wants to do business. And, once chosen, worked into the mindset, vocabulary and actions of the culture.
So, how can you ensure your company’s financial and operational functions are aligned with (and stay aligned with) corporate values?
Quite simply, leaders need to make sure corporate values live beyond a piece of paper.
In an exploratory survey conducted by the University of Notre Dame under the Notre Dame Deloitte Center for Ethical Leadership program, alumni from Notre Dame’s MBA program were asked about the presence and expression of corporate values. According to Notre Dame:
“70 percent of respondents reported that their employer had a formal values statement (although 27 percent couldn’t recall any of the values it actually contained). Still, all of the respondents to the survey believed that the company had clear values. And for those reporting a value [sic] statement, most felt there was a strong correspondence between the statement and what was truly important to the firm’s managers and owners.”
The survey also looked at the extent to which employees would choose an option out of a group of options that provided the opportunity to honor a corporate value.
What they found was that if corporate values only existed in values statement, they did not influence decisions. That said, the survey also found that:
“When a value was frequently discussed with one’s boss, or when it was included in formal performance evaluations, it tended to have a greater effect. Discussions with peers and subordinates, or more casual discussions of values, didn’t have the same impact.
While these findings are preliminary, they suggest that the simple presence of values statements—and even their presence in an organization’s general “culture” — may not be enough for them to have an effect.”
The takeaway? It’s vital to include values-alignment as measurement when assessing your company’s overall financial and operational performance, as well as when taking a look at how each department operates and reports.
Because when finance and operations walk the talk in these arenas, it translates into far more than preventing problems. It translates into growth and success through better and easier decision-making, less risk and stronger foundation from which to take next steps.
While taking on the task of bringing values-driven practices down to the very ground level of how your company conducts its finances and operates takes conscious, consistent work, doing so provides undeniable proof of organizational integrity and your own authenticity as a leader. Something that can only serve to take you and your company forward.
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