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"What Are Other Firms Doing?" Wrong! | Main | Management 101: The Failure to Communicate

Don't Let Your Firm's "Core Values" Inspire--Cynicism

A "values-driven organization."  Seductive, isn't it?  Who wouldn't aspire to belong to such an organization?  Indeed, what organization wouldn't aspire to being so characterized?

However, in the "be careful what you wish for" category, we now have a study out of Harvard Business School, examining a small advertising agency (given the sobriquet "Maverick Agency," not its real name) determined to embark on an unconventional path by, among other things:

• creating ad hoc teams for every client project, of people who would come together, do the project, and disband;
• working for clients only on a project basis, rather than the conventional "brand stewardship;" and, critically
• preaching—starting with the CEO—the virtues of openness, diversity, unpretentiousness, a sense of community and lack of hierarchy.

Interestingly, the professors first approached "Maverick" as a case study in team creativity; it was only as they got deeper into the research, and spent time at the firm interviewing employees and watching them interact, that they changed the focus of the study from team creativity to what happens with corporate values gone wrong:  Namely, "Employee Cynicism."

Here's their core finding:

"As we conducted our interviews with employees, there was a recurring theme: values. Many employees told us that the best thing about the company was its values. But employees also said that the worst thing about the company was that the CEO had been, from their point of view, breaching the values that he himself had developed for the company. Unwittingly, even a committed leader may appear to followers to be violating principles he or she has espoused."

How does this happen?  Through what the professors label as, and what we've all experienced:

"Value expansion." Empoyees, in other words, take what senior management says at face value, and then reinterpret and reapply it to their concrete situation in ways senior management may not have intended, or, far more likely, never occurred to them.

So if a core value is "a sense of community," as it was at Maverick, don't be surprised if employees think that value is being breached whenever someone receives a negative performance review or a senior person makes a unilateral decision without seeking consensus (potentially for any one of a number of very good reasons, by the way).

How, then, to avoid the impression of hypocrisy?

It starts, as so many management/leadership issues do, with communication, thorough airing of what the firm is trying to accomplish, and continuous opportunities for two-way dialogue.  Fleshing these out, senior management needs to:

• Acknowledge, explicitly, that different core values of a firm can actually be in conflict, and make sure the debate about which receives priority in what context is wide-open and conducted with all cards turned face up.  For example, the value of "professional development" can be in conflict with the value of "the client always gets our most experienced person for their issue."  Talk about this.
• Provide a "comfort zone," or a psychological safety zone, as the authors put it, within which employees can express their fears, misgivings, and even their distrust or budding alienation.  Within this zone, speak as candidly and comprehensively as possible.  For example?  Well, they cite the case of Dreyer's Grand Ice Cream (known here in the East as Edy's), which due to a combination of skyrocketing commodity prices and intense competition had to undertake a drastic financial restructuring in 1998.  Rather than simply announce the news to the financial community and let middle management carry out the dirty work, senior management flew to every Dreyer's facility in the country and explained, until no more questions were forthcoming, to all employees why they needed to do what they were and what the implications would be for everyone.

What else is to be done? 

While bare naked hypocrisy is not an approach anyone this side of Caligula would endorse, recognize that circumstances can transpire to paint one into that nasty box: 

"Hypocrisy may be unavoidable for leaders in the modern world. With rapid changes in the environment, it can be very hard for leaders to keep promises at "Time 2" that they made at "Time 1.""

If this happens to you—if, say, you've promised associates will be up for partner in their 7th year, and for competitive reasons you have to change it their 9th year—then it's time for what will be one of the more painful, albeit essential, public grillings you'll get.

Like the senior executives at Dreyer, you'd best be prepared to stand in the well of the auditorium (symbolically at least), taking questions from the floor until there are no more questions.  And do it again on a regular basis until the storm has passed.

Don't like it?  Think that it's unfair that someone such as yourself of unquestionable upright moral fiber could ever be accused of hypocrisy, when all one has at heart is the firm's best interests?

As they say on the ball field, "Suck it up."  And as I say on "Adam Smith, Esq.," "That's what you get paid for."

Posted by Bruce at July 8, 2006 12:22 PM | TrackBack
Posted to Cultural Considerations | Leadership | Partnership Structures | Practice Group Management | Strategy

Comments

It's interesting to me that the "values" debate is almost always framed in the generic plural--rarely in the specific singular. It's one thing to talk about being a "values-driven firm," and often a good thing. But it begs the question "what values?" Part of the reason for "value expansion" is that leaders don't take their own words seriously. And of all professions, you'd think that lawyers would be careful about defining their terms. Yet too often, it's a case of rounding up the usual suspects. Community, respect, collegiality, client service are frequently cited values, and all are vague enough; but the real stumpers are "trust" and "integrity." I have yet to find a company with a solid working definition of either "trust" or "integrity." And since each term is so rich in meaning, to leave the terms undefined virtually invites misinterpretation--"values expansion" by the term you cite. The solution? Not just communication, but a specific form of it: rigorous discussion about the definition of the terms, where they apply, what does and doesn't come under them. Sharing ideas about feelings is necessary, but just venting isn't going to help unless a firm truly has a shared vocabulary about what those terms mean. Firms need to answer, specifically and broadly, the question, "exactly what values do we value?"

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