By Thomas E. Ambler, Senior Consultant
Strategic Planning Expert
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.
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© 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