Key Concept

For organizational values to have an impact they must be turned into practices. Effective values practices are not stamped in place by top-down management pronouncements but rather emerge from precipitating events that draw concerned people together who seek preventive solutions. These solutions are eventually, after a period of contention and rework, manifested in concrete practices.

Idea Summary

Organizational values can exemplify the old saying that “words are cheap.” Inspiring words about ethics, diversity or sustainability etched on a lobby wall mean nothing if they are not reflected in the performance of actual practices within the organization.

While such practices might seem to be developed and formulated at the top management level and then distributed to the organization, a 10-year research study showed that the genesis of effective values practices occur long before top management takes notice, emerging from concerned people galvanized to act by precipitating events. At first glance, for example, it appears that the business school honour code at the heart of the study was launched by a newly hired dean who promised to make integrity one of the school’s core values. The research reveals, however, that work on the honour code had been progressing for five years before the dean was hired.

Based on the study, the researchers determined that values practices are developed and implemented through four interrelated processes:

Dealing with pockets of concerns: Different events will raise the concerns of different groups (or ‘pockets’) of people.

Knotting local concerns into action networks: The next step in the development of values practices is when different groups of concerned individuals with different concerns start to network and work together. This can be done informally and organically as well as deliberately. An important point: top managers are often not the original catalysts for these networks, becoming involved only later as the process unfolds.

Performing values practices: Once the values are formulated, the words must be transformed into actions. This process occurs in many ways, and can be contentious: individual and collective value practices are not always aligned; values practices are often a ‘heterogeneous bundle’ that is not universally accepted by all stakeholders; and actions required by a new set of values may conflict with previously accepted values practices. As a result of these and other challenges, values practices are often reworked and adjusted over time.

Circulating values discourse: Given the hard work required to translate values into practices, it is no surprise that the discussion about values is ongoing. In addition, while values practices may originally have narrow boundaries — an honour code for MBA students, for example — the question of values and values practices can spread to other parts of the organization or other organizational practices.  

Business Application

While the subject of corporate values is ubiquitous in many management and leadership books, the development and implementation of values in an organization is, according to this research, often simplified in these texts beyond recognition. CEOs or business owners might believe from the literature that pulling together a few key statements of values and then distributing the statements to the managers and employees of the firm is all that’s required. After all, as one interviewee asked the researchers, “Who could be against honesty? It’s like apple pie.”

In truth, values emerge from concerns in the rank-and-file, not necessarily from the top. They are formulated as stakeholders with different concerns start to coalesce and network. And the implementation of practices based on those values will be slow and contentious — and some values may even need to be reworked in the process.

In short, top-down commands might lead to platitudes in the company literature, but not to real change. Leaders who want to instil values in their organizations must encourage and facilitate the bottom-up development of values and recognize the difficult road to values practices.