Author: Tom Ambler

By Tom Ambler, Senior Consultant

Note:  This article is part of a series taken from Thomas E. Ambler’s article The Strategic Value of  Values originally published in Compass Points in April 2002.  In Part 1, we introduced the series.  In Part 2, we discussed Values’ Value.  In Part 3, we discussed Market Value.  In Part 4, we discussed Internal Value.  In this post, we discuss Defining Your Values.

Defining Your Values

Workable processes for initially defining your Values are available in plenty of books. For example, check out the Mission Statement and Goals sections, pages 178 to 183, in Simplified Strategic Planning, by Robert Bradford and Peter Duncan.

Here we will limit ourselves to mentioning several key principles and techniques as follows:

• Define no more than 6 Values at the deepest, most fundamental level possible, without regard for how they match up with the outside environment; these are your Core Values.
• Don’t try to define your Values using a democratic process – the top leaders have much greater weight in selecting the final set because they must authentically exemplify Values which inspire their followers.

Once established, these Core Values should be subjected to two tests. The first test is the Credibility Test. Have the behaviors of you and your people inside and outside of the organization been consistent with these Values over the past year? If not, are they really core and/or what must change?

The second test determines which individual Values or combinations of Values have particular strategic worth, in that they can provide sustainable competitive advantage. The technique, borrowed from Simplified Strategic Planning, is the same as that used with Competencies to determine which are strategic. (See page 86 of Simplified Strategic Planning.)

Recognizing Values in Strategic Planning

When you analyze and strategize your markets, be sure to consider the Values dimension explicitly, looking for competitive openings within which you can leverage your distinguishing Values.

Use your Core Values as a “gate” through which any new opportunity must pass. If an opportunity can’t be structured in such a way to pass, dump it!

Deal with the strategic issue mentioned earlier, “which customers and suppliers should you ‘fire’ because they don’t fit your Values?” If your participation in a core market segment becomes too small due to a Values conflict, challenge your Values only to the extent of seeking a deeper, more timeless value or principle to replace the one that conflicts with your market. For example, a hallowed practice of making your product “super-rugged” may need to be challenged by a deeper Value like “satisfying the customer”.

The next topic in this series will be Alignment of Values Within The Organization.

For information on how to take your strategic planning to the next level, please listen to our webinar: Why Isn’t My Strategic Planning Working?

© Copyright 2016 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

Tom Ambler is a Senior Consultant with Center for Simplified Strategic Planning, Inc. He can be reached by email at ambler@cssp.com

By Tom Ambler, Senior Consultant

Note:  This article is part of a series taken from Thomas E. Ambler’s article The Strategic Value of  Values originally published in Compass Points in April 2002.  In Part 1, we introduced the series.  In Part 2, we discussed Values’ Value.  In Part 3, we discussed Market Value.  In this post we will discuss Internal Value.

Internal Value

Now, how about the internal operation and culture of an organization? Can we logically support the assertion that Values cause success there too?

Nowhere are relationships more important than in the internal workings of an organization. Unity in those relationships is crucial for fostering the synergistic cooperation that produces high performance. Colonial theologian Jonathan Edwards’ statement, “one alone is nothing” rings true. Creating unity in a team is a crucial leadership function. It depends heavily on shared Values as well as shared vision. Cultures attract leaders with like Values and Leaders attract followers with like Values and, thus, build strong cultures based on shared Values. This implies that even strategic alignment, which we know causes success, is dependent on Values alignment.

Values-driven organizations win because they utilize leadership power properly. As Covey points out in Principle-Centered Leadership, power in an organization has three forms that lead to different results:

• Coercive Power – based on the fear that the leader can do harm to the follower; promotes ultra-reactivity among followers;
• Utility Power – based on leader and follower each offering something of value to the other; tends to foster individuality and situational ethics on the part of followers; still tends toward follower reactivity;
• Principle-centered (Values-centered) Power – based on the trust and respect earned by the leader over time; results in high follower proactivity.

So Values-driven leaders enjoy more power and greater follower productivity, loyalty and teamwork. That permits them to implement more effectively the changes demanded by their strategies. Paraphrasing Covey–“the ability to make change is limited unless the leaders driving the change are secure in their Values, and their Values are fundamental values that do not change and are, therefore, not challenged by the change.”

Clearly, a focus on shared Values causes long-term success. This conclusion should not come as any surprise. After all we have on supreme authority that, “if we set our hearts first on God’s rule and His goodness, we will receive the material things we spend so much time and energy worrying about – He already knows we need them.” (Paraphrase of Matthew 6:31-33)

Hopefully, everything we have covered to this point motivates you to make sure your organization has a well-defined set of Values at its core and is consistently living them out everywhere. Two related questions beg to be addressed.

1. What process should you use to clearly define your Values and recognize them in your strategic planning?
2. How can you achieve alignment with the Values throughout the organization?

The next topic in this series will be Defining Your Values.

For information on how to take your strategic planning to the next level, please listen to our webinar: Why Isn’t My Strategic Planning Working?

© Copyright 2016 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

Tom Ambler is a Senior Consultant with Center for Simplified Strategic Planning, Inc. He can be reached by email at ambler@cssp.com

By Thomas E. Ambler, Senior Consultant

Note:  This article is part of a series taken from Thomas E. Ambler’s article The Strategic Value of  Values originally published in Compass Points in April 2002.  In Part 1, we introduced the series.  In Part 2, we discussed Values’ Value.  In this post we will discuss Market Value.

Market Value

Now let’s shift attention specifically to the impact of Values in the marketplace. If you have been highly successful in the marketplace you likely have consistently done an excellent job at answering three Strategic Questions:

• What are you going to sell?
• Who is your market?
• How are you going to beat or avoid your competition?

All three questions are totally wrapped up with Values. For example, will you offer only products and services that provide social benefit? Which customers (and suppliers) should you “fire” because they cause you to constantly spin your wheels over a misfit of Values? What benefits can you provide that differentiate you and your offering from your competitors’. Even if you have to compete on a Commodity basis, where price is king, what can you do to get your act together internally to reduce your customer’s total transaction costs and still satisfy your Values, including profitability?

Everywhere you look you see anecdotal evidence that Values and market success are causally related. Scores of our clients report that their Values such as trustworthiness and integrity are the reason their customers choose them over their competitors.

Values will become even more critical determinants of market success in the future as the marketplace evolves. What is known as the Experience Economy is superseding the Service Economy and will itself be superseded by an emerging Transformation Economy, in which the highest product forms are the customers themselves, transformed the way they want to be. So it is not hard to conceive of markets where Values become the most important, explicit part of an organization’s offering.

Conclusion? Values of organizations cause market success today and in the future.

The next topic in this series will be Internal Value.

For information on how to take your strategic planning to the next level, please listen to our webinar: Why Isn’t My Strategic Planning Working?

© Copyright 2016 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

Tom Ambler is a Senior Consultant with Center for Simplified Strategic Planning, Inc. He can be reached by email at ambler@cssp.com

By Thomas E. Ambler, Senior Consultant

Note:  This article is part of a series taken from Thomas E. Ambler’s article The Strategic Value of Values originally published in Compass Points in April 2002.  In Part One, we introduced the series.  In this post we will discuss Values’ Value.

Values’ Value

Now we can address our question “does a Values-centered approach make companies significantly more successful at achieving their strategic goals over the long run than they otherwise would be?” Studies resulting in hard information are very difficult to structure. The best-known and widely accepted study is the one reported in Built to Last. As you are probably aware, this study selected 18 world-class Visionary Companies that were the best of the best, enduring winners in their industries, and compared each to a similar Comparison Company whose long-term performance was substantially less stellar. One of the major areas explored was the difference in the existence and role of a core ideology in the paired companies. The following statements encapsulate the findings:

• “In nearly all cases (of Visionary Companies) we found evidence of a core ideology that existed not merely as words but as a shaping force.”
• Although profit is consistently a value in all Visionary Companies, profit maximization does not rule. They pursue their ideological aims profitably.
• Visionary Companies tend to have only a few core values – 3 to 6.
• “In a Visionary Company, the core values need no rational or external justification. Nor do they sway with the trends and fads of the day. Nor even do they shift in response to changing market conditions.”

The points above clearly indicate that companies with Values they live out enjoy greater success than those that don’t. If there is strong logic as to why this indication should be true, we can elevate its status from being simply a statistical correlation to that of a cause-and-effect relationship.

Enterprise is composed of transactions. Behind every transaction lie relationships–some good, some bad. Constructive, long-term relationships require Trust and Respect, inseparable, intertwined Values. Trust and Respect depend on fulfillment of the expectations of one party by the other. Expectations are based on Values. Everything else being equal, two parties sharing deeply held Values in common are drawn toward one another and develop a productive rapport. Conversely, where Values conflict, developing rapport and “Getting to Yes” becomes much more difficult.

Clearly, Values are logically a cause and the type and strength of relationships are direct effects, anywhere relationships occur.

The next topic in this series will be Market Value.

For information on how to take your strategic planning to the next level, please listen to our webinar: Why Isn’t My Strategic Planning Working?

© Copyright 2016 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

Tom Ambler is a Senior Consultant with Center for Simplified Strategic Planning, Inc. He can be reached by email at ambler@cssp.com

By Thomas E. Ambler, Senior Consultant

Note:  This article is part of a series taken from Thomas E. Ambler’s article The Strategic Value of Values originally published in Compass Points in April 2002.  In Part One, we will introduce the series.

Daily our headlines shout of blatant disregard both for the law and for right vs. wrong by obscure and prominent businesses alike. We see headlines like “If you violate the law, you will pay for it”, quoting Harvey Pitt of the SEC in response to questions related to the Enron debacle with its possible auditor complicity, witting or unwitting. Or headlines like “Tyson Foods Executives Indicted” for smuggling illegal aliens, aiding them in obtaining false documents and paying INS undercover agents “recruiting expenses”. Deplorable? Yes. Shocking? Maybe. New? No. The products of human greed and moral expediency have been with us ever since Adam and Eve decided they wanted to be God.

Unfortunately, seldom do we see headlines that highlight those companies and organizations that consistently live out positive values. Our guts tell us that these businesses must benefit from their positive, Values-centered approach. But how much? Do the benefits rise above simply having well-rested employees with easy consciences? Does a Values-centered approach produce a payoff that makes these companies significantly more successful at achieving their strategic goals over the long run than they otherwise would be?

Values – A Definition

Let’s define the term “Values”. Consider first what Values are not. They are not operating or cultural practices, processes or policies. These are subject to continual revision in response to environmental changes. These may be values-based, but are not Values themselves. Instead, (borrowing from the definition of “Core Values” in Built to Last), Values are the organization’s essential and enduring tenets – a small set of general guiding principles; not to be compromised for short-term financial gain or expediency. Values are the “proven, enduring guidelines for human conduct” called “Principles” by Covey. Values include both the Commitment Statement portion of the Mission Statement and Goals in the Simplified Strategic Planning (SSP) process. For example, statements like “establishing Trust and Respect as the basis for relationships with all stakeholders”; “the Company exists to alleviate pain and eliminate disease” (Johnson & Johnson Credo); the biblical Golden Rule and “respecting and encouraging each individual’s ability and creativity” (Sony); would all qualify as Values.

The term “Values-centered” applies to an organization that only makes decisions which satisfy its Values. A Values-centered organization is more likely to take a profit hit in order to better satisfy other Values.

In a future post we will discuss Values’ Value.

To learn How to Think Strategically Beyond Profits, click here.

© Copyright 2016 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

Tom Ambler is a Senior Consultant with Center for Simplified Strategic Planning, Inc. He can be reached by email at ambler@cssp.com

Note: This review previously appeared in Compass Points April 2004

Thomas Ambler reviews:

Good Business, Leadership, Flow and the Making of Meaning
By Mihaly Csikszentmihalyi
Viking Penguin, 2003, 211 pages

Are you a leader who intentionally seeks to practice “bad business”? Of course not, that’s ridiculous! But maybe you are and don’t know it.

The title reveals much about the content of this book. It deals with what constitutes “good business,” is focused at leaders, promotes the concept of Flow and seeks to heighten meaning in our world.

The author is a professor of management and director of the Quality of Life Research Center at the Drucker School of Management and author of multiple, widely read books dealing with Flow, creativity and other positive psychological topics. He brings to his writing a deep understanding of history and a multi-disciplinary, philosophical approach that dares to grapple with the purpose of life.

He chose to base Good Business on intense interviews of 39 “visionary” business leaders, mostly CEO’s/owners, chosen by their peers as exemplifying “high achievement with strong moral commitment”. These leaders include people like Leon Gorman of L.L. Bean, Anita Roddick of The Body Shop, Jack Greenberg of McDonald’s, C. William Pollard of ServiceMaster, Robert Shapiro of Monsanto, Alfred Zeien of Gillette and Norman Augustine of Lockheed Martin. The author draws on quotes from these leaders as his springboard to introduce and develop each new, stimulating and often controversial idea.

You a can get a flavor for this book from the following smattering of its ideas:

• Business has the most important role of any institution in providing human happiness, Aristotle’s ultimate goal of existence.
• “Good business” is not limited to the generation of profit. It refers instead to transactions that make a genuine contribution to human happiness.
• Flow–the experience of having a deep sense of enjoyment in which “one becomes totally absorbed and loses oneself”–is the primary source of happiness.
• Leadership of “good businesses” must provide the conditions conducive to Flow for their employees and contribute to Flow for their customers and other stakeholders.
• The traits shared by all visionary leaders in this study are optimism, integrity, ambition coupled with perseverance, curiosity and empathy.

“For business to really contribute to the common welfare and, thus, assure its own survival through the support of society, it will need to nurture a greater number of visionary leaders who can infuse soul in the organizations, and who can convince the rest of us that it is worth investing in their projects.” This quote begins to encapsulate the essence of Good Business.

Do I recommend this book? Absolutely! I like to visualize the organization of my knowledge as a tree. When I encounter new knowledge, I add it to my tree, if it fits well enough to be grafted. Most business-related books only qualify as twigs on that tree. Good Business is a significant idea book that is seeping into my consciousness and forming major branches on my “knowledge tree.”

Does this sound like a book that you want to read? It should, if you are a leader and are willing to risk having your intellect and values challenged. I rate it a 10 on significance and a 7 on ease of absorbing (author’s or reviewer’s problem?). Good Business is a “must read”.

For information on how to take your strategic planning to the next level, please listen to our webinar: Why Isn’t My Strategic Planning Working?

© Copyright 2015 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

Tom Ambler is a Senior Consultant with Center for Simplified Strategic Planning, Inc. He can be reached by email at ambler@cssp.com

By Tom Ambler, Senior Consultant

Note: This article was previously published in Course and Direction in January 2006

View Commodity Industries in a Global Way
Commodity industries that are highly capital intensive, have cyclic markets and high transportation costs are particularly susceptible to price fluctuations caused by unexpected supply/demand imbalances. This price variability makes investment in additional capacity very dicey. The long-term result is product substitution and periods of over-building capacity once companies overcome their uncertainty about the duration of shortages, thus beginning another cycle of supply/demand imbalance.

A good example of this situation involves the cement industry, which historically has been an industry where plant capacity was localized to the market due to very high freight costs and general availability of raw materials. The simultaneously high demand in the Sunbelt and high demand in China has caused a significant shortage of cement. The results are 20% increases in pricing and significant stretch-outs in the construction schedules. The cement companies are not likely to remedy this shortage very quickly.

Strategy Tip: If your industry is cyclical and capital intensive, make sure you understand the global economic situation – not just the local situation. You may need econometric models describing the long-term relationships that drive demand as the basis for capacity expansion. You should also be aware that your industry may be ripe for consolidation among suppliers in order to make it a more attractive investment.

Making a Healthy Culture a Priority
Getting tangled in your own web of unethical practices has become almost epidemic. It appears to know no industry boundaries and often involves multiple players in a company, either in cahoots or acting independently within the same unhealthy culture.

An example of this is reported in the Wall Street Journal 9/8/03. Ahold, an international food marketing giant, has come under the gun of financial scrutiny as a result of improper accounting for vendor rebates by executives of one of its large U.S. divisions, U.S. Foodservice. This scandal forced a restatement of earnings amounting to close to $1 Billion, which has thrown the spotlight on the company’s heavy debt. Reducing this debt will require the unraveling of much of Ahold internationally, with massive spin-offs and radical changes in its future course.

Strategy Tip: A culture that places huge emphasis on short-term performance and global market share, without adequate concern for integrity at every level and in every circumstance, becomes a festering sore in an organization. It has the potential to become a burning fuse just waiting to set off a bomb with financial and human devastation many times greater than the cost of fixing the culture in the first place. A company that loses sight of its values is one that loses its value.

For information on how to take your strategic planning to the next level, please listen to our webinar: Why Isn’t My Strategic Planning Working?

© Copyright 2015 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

Tom Ambler is a Senior Consultant with Center for Simplified Strategic Planning, Inc. He can be reached by email at ambler@cssp.com

Thomas E. Ambler, Senior Consultant, CSSP, Inc.

Recruiting disciplined people requires a well-tuned filtering process that determines if there is a fit of the candidate’s skill sets and passions with the job requirements of the organization and determines whether the candidate is self-disciplined. We can take a cue as to how to do this from the recruiting process used by the football program of an academically elite Division 3 university with needs for self-disciplined candidates. Their process attempts to determine through hard and soft measurements what candidates have attempted and accomplished in their previous academic and athletic careers.  However, it goes even deeper by looking at less obvious things like the load and difficulty of the courses they took and other activities they pursued, and their success.

We can use an analogous approach by looking for evidence and language that strongly suggest that the candidate practices the Seven Habits of Highly Effective People codified by Stephen Covey, particularly the following:

• Be proactive
• Begin with the end in mind
• Put first things first
• Sharpen the Saw.

Once the person is recruited, we need to complete the job of building discipline, manifested in both thought and action, through our leadership and with our systems. This requires that we devote almost fanatical attention to modeling discipline, setting clear expectations, reviewing performance, assigning developmental jobs and rewarding disciplined behavior and contributions to a whole culture of discipline.

We can promote the application of the Hedgehog Concept personally and help lift their skills and passions to a whole new level. A culture of discipline with all key people on the Hedgehog Concept bandwagon has tremendous transformational power.

For more information on how to take your strategic planning to the next level please listen to our webinar: Why Isn’t My Strategic Planning Working?

© Copyright 2015 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

Tom Ambler is a Senior Consultant with Center for Simplified Strategic Planning, Inc. He can be reached by email at ambler@cssp.com

Thomas E. Ambler, Senior Consultant, CSSP, Inc.

In his outstanding book about great organizations, Good To Great, Jim Collins concludes, “Sustained great results depend upon building a culture full of self-disciplined people who take disciplined action, fanatically consistent with the three circles.” (The three circles for an organization are (1) what it can be best in the world at, (2) what its people are already deeply passionate about and (3) what drives its economic engine. Focusing on the intersection of these three circles he calls the Hedgehog Concept.) He further states, “A culture of discipline is not just about action. It is about getting disciplined people…who engage in disciplined thought and…who then take disciplined action.”

First, let’s define what is meant by “discipline.”

• The dictionary defines “discipline” as exhibiting “training, especially of the mind or character,” “a trained condition of order and obedience” and “the training effect of experience, misfortune etc.”
• Discipline comes primarily from within and it is “grooved”.
• Typically finish things they start.
• Capable of facing and dealing with brutal facts, even about themselves.
• Willing to adhere to the organization’s systems for getting work done.
• Having a passion for doing certain types of work or advancing certain purposes.
• Possessing unique skill sets.

We want our organization to be “full of self-disciplined people.” Most important is the CEO, who exhibits not only self-discipline, but also models and practices the other attributes of Collin’s “Level 5 Executive” (see Chapter 2 in Collin’s book). We also need to recruit and/or raise a host of other disciplined adults.  We will address this in a future article.

For more information on how to take your strategic planning to the next level please listen to our webinar: Why Isn’t My Strategic Planning Working?

© Copyright 2015 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

Tom Ambler is a Senior Consultant with Center for Simplified Strategic Planning, Inc. He can be reached by email at ambler@cssp.com