Friday 12 August 2016

Company Purpose and Values Should Be 'Built to Last'

A friend gave me a 1996 Harvard Business Review article Building Your Company's Vision by James C. Collins and Jerry l. Porras, authors of Built to Last, the classic business book. It identified the elements of an organization's identity that should change over time (vision, goals, strategies and practices) and those that should stay the same (core purpose and values) based on their research on long-term successful companies. My friend said, "Phil, you write a lot about change, why not write about what shouldn't change?" Profiling the findings from this article seemed like a good way to honour his request.

The article is an interesting read twenty years after it was published. The authors' main insight is that successful companies don't alter their core ideologies  core purpose and values  regardless of what happens in the dynamic environments in which they operate. 

An organization's purpose should be fixed. This is its reason for being. It defines the company's intent and why it exists. An unwavering purpose guides goal setting and strategies to achieve them. It also is a source of motivation for leaders and their teams to help them through tough times and difficult transitions. A common purpose to create value for its stakeholders  consumers, customers, community, etc.  can make challenges and discomforts justifiable and endurable.

Google has remained true to its purpose or mission since it was formed in the late 1990s. "To organize the world's information and make it universally accessible and useful" has guided Google's vision and strategies, driving innovation and continuous improvement in everything they do. A Google executive shared that they take their mission very seriously and continually strive to anticipate future needs to be true to it.

Core values also should remain materially the same over time. They are commonly held beliefs that act as principles to guide decision making and behaviour. They are also foundations of a company's culture; as Hubspot believes, " Our Culture Code is the operating system that drives Hubspot." 

Tony Hsieh, CEO at Zappos, created its 10 core values to formalize the company's culture and make sure "everyone was on the same page." They are woven into all management practices including the hiring and firing of employees, regardless of job performance. They define what the company is about and how its employees think, act and behave.

Values can be reworded or modernized, but in essence remain constant standards of conduct. At key inflection points, like a merger, companies can assess if adjustments are needed to reflect the behavioural norms required to achieve the company's purpose, vision and goals.  

IBM revisited its values through a company-wide online input process. Tens of thousands of employees shared their views on values and behaviour. Common themes were identified from the feedback that were used to update IBM's original values. "Customer service," "excellence" and "respect for the individual" became "dedication to every client's success," "innovation that matters for the company and the world," and "trust and personal responsibility in all relationships." The modernized versions translated the core values into relevant and relatable behavioural norms.

Given that most elements of business are constantly changing, it's refreshing to affirm that consistent purpose and values can be a source of strength and advantage. They provide common understanding of why the organization exists and how people operate within it. What shouldn't change is definitely worth writing about.