AXIS Performance Advisors

Demystifying sustainability

Value of Values


Copyright 1998 AXIS Performance Advisors, Inc.

The Value of Values

Courtesy Stuart Miles,

Courtesy Stuart Miles,

According to Paul Ray, author of “The Great Divide: Prospects for an Integral Culture,” Americans can be identified with three different world views: traditionalists (at 29% with religious, “small town”values), modernists (at 47%, linked to the modern middle class, valuing science and consumerism) and a new group, cultural creatives, whose values are more idealistic and spiritual. This last group already comprises 24%of the population and is the only group that is growing. They have more concern for relationships and psychological development and pay more attention to environmental issues. The study begs the question ­ what will be the impact on our society if, in fact, our primary paradigms and values shift?

This research stimulated our thinking and got us wondering what impact a new value set would have on organizations and their operations. We’ve decided to dedicate this issue, as well as this year’s research study, tothe exploration of organizational values.


Why are values important?

Whether or not they are explicitly identified and discussed, most of us recognize that the operations of any organization are determined by the values held by those with decision authority. Values shape the behavior of the people in an organization. They determine how people treat each other,how they approach their work, and how they interact with customers. Sometimes values are so strong and widely shared that they are evident even to those outside the organization. Who does not know what Nordstrom’s core value is?

In today’s competitive environment, organizational values can play an important role in positioning an organization for success.

“Organizational commitment and perseverance are driven by the desire to make a difference in people’s lives ­the bigger the difference, the deeper the commitment.”

­Gary Hamel and CK Prahalad, Competing for the Future

More and more organizations are coming to realize that employees provide the only meaningful hope for competitive advantage. Without the commitment,energy, and intelligence of the work force, organizations will be hard pressed to keep pace. But if you really want committed employees who will go the extra mile, you must tap into their passion and provide the opportunity for them to do what they feel is right and good. Do your employees see themselves as stone cutters or cathedral builders?

Our turbulent times make it impossible to manage by rule. You can’t write a policy or procedure to govern every possible situation. Remember Johnson and Johnson’s quick response to the Tylenol scare? It was their Credo, nota procedure, that guided their actions. Compare their response to that ofthe toy company with their hair-eating doll this past holiday season. Values matter!

It’s more effective and more expedient to provide a set of guiding principles and values and then give employees the latitude to make decisions. Because the Nordstrom value is so strong and clear, their one-page employee handbook lists but one rule for employees: “Use your good judgment at all times.”They know what their jobs are – to please the customer. What more guidance do they need?


What do organizations value?

For most organizations values are influenced, if not determined, by purpose.In the 70’s and 80’s, if you asked most executives what they considered their organization’s purpose, they would likely respond that it was to make a profit and to provide a fair return for the owners. Though this mind set is still clearly the predominate one in business, it surprisingly has not always been so.

In the beginning corporations were chartered for the purpose of meeting larger societal needs that individuals or governments were not prepared to meet. Like the Hudsons Bay Trading Company, corporations were formed to support trade. Typically their charters were limited to 25 years. It wasn’t until this century that business’ focus narrowed to profits. According to Ralph Estes, author of Tyranny of the Bottom Line: Why Corporations Make Good People Do Bad Things, this shift from focusing on society to owners came about because accounting/finance was the only commonly used measure of organizational performance..

Then in the 1980’s, with the popularity of Total Quality Management,the focus shifted to another stakeholder, customers.

Research suggests that our organizational expectations are changing again.Today, many businesses are recognizing a responsibility to their employees,their communities, and the environment. This values shift will lead to different systems and practices.

“In the next two decades our world will either be dramatically better or dramatically worse. The one thing that cannot happen is ‘more of the same.’ Most trends of the past are simply not sustainable.”

­Paul Ray, The Great Divide

How will organizations change?

If the purpose of an organization goes beyond satisfying customers and shareholders, how does that impact policies and operations? How do the values of the individual corporate members influence the direction and practices of the organization?

Pitney Bowes, for example, holds annual worker stakeholders meetings in addition to its shareholders meetings. Ben and Jerry’s makes business decisions that are in the interest of their shareholders and society. 3-Mhas saved millions of dollars in their Pollution-Prevention-Pays program.Tom Chappell of Tom’s of Maine says, “Once you choose to do good, you will find it all around you and in every area of your business. Our job as business leaders is to be open to the possibilities of goodness, to find it unexpectedly, in places we wouldn’t have guessed.”

If you focus on serving society, will your shareholders suffer? Not necessarily.For example, the Domini 400 Social Index, which tracks stocks of socially responsible organizations, outperformed the S&P 500 since its inception in 1990.

If you want to learn more. . .

  • Business for Social Responsibility (association)
  • Tyranny of the Bottom Line : Why Corporations Make Good People Do Bad Things by Ralph Estes
  • Soul of a Business : Managing for Profit and the Common Good by Tom Chappell
  • Choosing a Sustainable Future by National Commission on the Environment
  • When Corporations Rule the World by David Korten
  • Rediscovering the Soul of Business: A Renaissance of Values by Joseph Jaworski

Article Review

The Great Divide: Prospects for an Integral Culture

by Paul Ray

According to Paul Ray Americans can be identified with three different world views. This is a significant discovery as just a generation ago there were only two identifiable value sets. The two values sets which have been driving our culture for the better part of the century are traditionalism and modernism.

The Traditionalists, who make up about 29% of the population, are those people who would try to recreate the religious and cultural environment of the early part of the century when crime was low, morals were clear,and communities were small.

The Modernists represent the bulk of our current population (about 47%)and are identified most closely with the modern middle class. This group’s roots are linked with the modern economy and in the rise of scientific and intellectual beliefs.

The newest group on the cultural horizon are what Ray calls the Cultural Creatives because they are operating on the edge of cultural change. The values of this group are more idealistic and spiritual. They have more concern for relationships and psychological development and pay more attention to environmental issues. In large part they are open to creating a positive

The interesting point of the research is that this last group already comprises 24% of the population and is the only group of the three showing growth in its ranks. The study begs the question ­ what will be the
impact on our society if, in fact, our primary paradigms and values shift?


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