The values conundrum

values

At FedEx, speed is a collective way of thinking and behaving. We refer to this collective way of thinking as an organization’s culture. It is these ways of thinking and behaving that design, produce and sell products and services that are of value to customers. Many internal practices create and sustain a company’s culture including measurements, rewards, recruitment, training, development, information management, communications, work process design, organizational structure, and leadership, writes Wayne Brockbank

Some time ago I walked into a region medical center. I noticed a wall full of hardwood plaques: one for its mission statement, other individual plaques for vision, philosophy, culture, values, core principles, purpose, long term objectives, and ethics. In its attempt to enunciate what it values; this organization had a major problem of concept clutter. As it happened at the same time, I was helping an industry-leading Fortune 100 company to organize these sometimes contradictory and sometimes redundant concepts into a useful framework.

Values Typology
Building some insightful work about human values from cognitive psychology, we developed the following logic. “Values” is one of those words that confuses rather than enhances communication. When economists use the term “values’, they mean something fundamentally different from sociologists or finance professors or psychologists or attorneys or mathematicians. At the risk of offending all of the above, I offer that the word “value” simply refers to something that is important to an individual or an institution. Something is of value to us if we would not trade something else in exchange for it.

That definition is useful in helping to distinguish among three type of values: output values, throughput values and ethical values. This typology of values may be applied to individual humans and to organizations as a whole. For today’s purposes, I refer primarily to private sector, profit seeking organizations.

Output Values
Output values may be most usefully conceived as absolute values. People have absolute values, those ‘things” that are most important in their lives. When executives are asked what is most important in their lives, they usually respond, “family, truth, religion, or the like”. These are aspects of life which, if they are taken away, result in something inside of the individual dying. Anyone who has lost a loved one or who faced the possibility of being forced to abandon their religion knows whereof we speak.

Corporations likewise have absolute values, somethings that they must achieve, or the organization ceases to exist. Corporations that fail to create profits or to achieve some level of customer satisfaction will cease to exist.

People have absolute values, those ‘things” that are most important in their lives. When executives are asked what is most important in their lives, they usually respond, “family, truth, religion, or the like”.

Throughput Values
Throughput values are those thoughts and activities which allow people and organizations to achieve their output values. For example, many people value working hard and earning money. But for most people, hard work and money are not the end; rather, they are the means to their output ends. Such throughput values are malleable and change relative to the ends that are being sought.

Companies have throughput values. The most basic throughput value is how people in the company need to think and behave in order to achieve its output values. For example, FedEx values speed of delivery. Speed is the means to its output ends. At FedEx, speed is a collective way of thinking and behaving. We refer to this collective way of thinking as an organization’s culture. It is these ways of thinking and behaving that design, produce and sell products and services that are of value to customers. Many internal practices create and sustain a company’s culture including measurements, rewards, recruitment, training, development, information management, communications, work process design, organizational structure, and leadership.

Companies have throughput values. The most basic throughput value is how people in the company need to think and behave in order to achieve its output values. For example, FedEx values speed of delivery. Speed is the means to its output ends.

Ethical Values
Ethical values create the boundaries within which throughput values function to create the output values Two types of ethical values may be differentiated: legal and moral. Most societies embody their ethical values in their legal systems. People are constrained not lie, cheat and e steal because of the legal consequences of so doing. The legal system provides the boundaries within which people may pursue their output values through the execution of their throughput values. The same holds true for corporations. They function within legal boundaries which impose negative sanctions to companies which violate the legal boundaries.

Moral values are arguably equally important but are more implicit and ambiguous. The morality of individuals sets the parameters within which they conduct their lives. Individual moral values might include giving to the poor, martial fidelity, or honoring parents. On the other hand, it is conceivable that some people may have few, if any, moral boundaries that are not reinforced by the legal system.

Some companies have moral values that are independent of their legal constraints. For example, early in the history of the Dupont company, very strict safety rules were stated and enforced. This was long before legal requirements were imposed. The founder, E.I. du Pont, simply believed that the company had a moral obligation to return its workers to their families at the end of each workday with their eyes, ears, fingers, and sanity intact. Some companies talk moral values, but moral values are only in place if they are taken seriously. Seriously means that if an employee violates the company’s moral values, they are fired – without question. They are no longer allowed to be part of the institution.

Moral values are arguably equally important but are more implicit and ambiguous. The morality of individuals sets the parameters within which they conduct their lives. Individual moral values might include giving to the poor, martial fidelity, or honoring parents.

Applying the Values Typology
Distinguishing these three categories of values is important for at least four reasons: First, clarifying the distinction among the three avoids conceptual confusion and its accompanying cynicism. Second, keeping the three separate helps to clearly communicate all three. For example, most companies simply place all three values jumbled together on a one page “Values Statement” or on nine hardwood plaques in their entrances. They then leave it to employees to sort out the conceptual differences or redundancies. Third, as described above, the mechanisms by which each of these three are created and sustained are radically different. Fourth, making clear the differences between the three helps to clarify success measures and accountability.

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