The rapid pace of innovation, the proliferation of technology, access to data, connectivity and previously non-existent mobility have all redefined organizational boundaries and resources. Behemoth companies that relied on the scale to succeed are constantly being challenged by new entrants as barriers disappear. In this rapidly evolving business landscape, how can leaders help their companies define and stay true to the company’s purpose and values and ensure these guide the decisions they make?
This is where the enterprise’s purpose and values as they are reflected in its people, processes, and products come into play.
Success today comes from continuous innovation, fueled by a purpose that represents an enterprise’s commitments not just to employees, customers, partners, and shareholders but also to the community at large.
Translated into daily activities, it shapes the interactions between employees, customers, suppliers, shareholders, partners, and the wider community that define your business. These interactions are visible evidence of your business culture. This behavior is what the wider world sees and expects from you. And they play a huge part in your success or failure. Positive behavior improves your company’s performance and reinforces your brand. Negative behavior, as many a fallen giant knows from bitter experience, can destroy it.
The culture iceberg
Anthropologist Edward T. Hall’s iceberg model of culture indicates that behavior rests on the beliefs that are held by the community. When the community is a business, these are often explicit in mission statements or brand purpose.
Look at Walmart’s mission: “We save people money so they can live better.” Or Google’s: “To organize the world’s information and make it universally accessible and useful.”
What makes them beliefs rather than simply good marketing slogans is that they sum up values and convey the enterprise’s purpose. In Hall’s model, it is the values that form the bulk of the iceberg, 90% of what makes up a culture, hidden from view.
For an enterprise to be truly successful, it needs to share and embody values that will lead to the right behavior.
Charles Handy, one of the most influential thinkers on management and organizational behavior, put it simply: “In a knowledge economy, a good business is a community with a purpose, not a piece of property.”
What successful companies have in common is that their values are true to their purpose, serving as their North Star and guiding their employees’ purposeful behavior:
Learning and sharing – giving access to opportunities, building skills and investing in people’s development.
Integrity – being open, honest and genuine, and inspiring trust among all stakeholders.
Excellence – leading by example, ensuring quality, and building communities.
Leading change – expressed in a willingness to be bold and take risks, a passion for collective growth, and a desire to drive innovation and support sustainability.
The value of values
A culture based on the right values isn’t a “nice to have” to make people feel warm. It is fundamental to the bottom line.
Management consulting firm McKinsey’s Organizational Health Index analyzes the culture of more than 1,000 organizations, encompassing three million people. It clearly shows the correlation between culture and financial performance. Companies in the top quartile returned 60% more to shareholders than median companies, and 200% more than those in the bottom quartile.
Impact beyond the business
Shareholders aren’t the only ones who benefit – and nor should they be.
People spend more of their waking time at work than they do with their friends and families. Working for an organization that values them, and shares their values, can be the difference between a fulfilled life and a frustrating existence. The research firm Gartner found supporting what employees value, and not just what they need, increases performance by 20%. This is backed up by analysis from Gallup, that shows employee engagement consistently affects key performance outcomes, regardless of the organization’s industry or company.
Customers are increasingly demanding that the businesses they interact with share their values too. Surveys show as many as 90% say they expect companies to do more than make a profit. Not only do they want products and services that make a tangible difference to their own lives, but they also require businesses to be responsible corporate citizens, addressing social and environmental issues that they care about.
Salesforce has worked hard to create a company culture that transcends the workings of the business through the Salesforce Ohana community that brings together Salesforce employees, users, partners, and the community. For Salesforce CEO, Marc Benioff, empowering the Ohana Groups is the number one priority to carry the company’s equality culture forward.
No company can address today’s social challenges on their own, so coalitions such as the Chief Executives for Corporate Purpose (CECP) can help facilitate the pivotal role the world’s leading CEOs can play to build a better world through business.
Firms that are guided by their values and stay true to their purpose will lead the way in having a positive impact on their industry, and the wider world. A clear purpose empowers people to make a difference. People who make a difference are happier and more fulfilled, giving them the impetus to perform even better. As they do, their impact grows in a virtuous circle for success that brings benefits to all.
About the author(s)
Business & Technology Services
TCS’ Business and Technology Services organization combines the power of business excellence with digital innovations to help enterprises and leaders be purpose-driven and performance-oriented, making the shift from shareholder value to stakeholder value. By harnessing the abundance of data, talent, connectivity and capital, B&TS helps leading companies around the world build ecosystems that fuel growth and innovation, foster collaboration and engagement across ecosystems, improve health, safety, and well-being, enabling empowerment and inclusivity, and driving sustainability and positive environmental impact.