John Kotter along with fellow Harvard Professor James Heskett studied the performance of more than 200 large firms. "We found that firms… that emphasized all the key managerial constituencies (customers, stockholders, and employees) and leadership from managers at all levels outperformed firms that did not have those cultural traits by a huge margin. Over an eleven-year period, the former increased revenues by an average of 682 percent versus 166 percent for the latter, expanded their work forces by 282 percent versus 36 percent, grew their stock prices by 901 percent versus 74 percent, and improved their net incomes by 756 percent versus 1 percent."
Many organizations have bought in the fallacy that exceptional performance results from having a strong core value statement and clearly communicating it to their employees. My observation is that BEHAVIOR IS ALL YOU GET! No matter how well written, communicated and framed for hanging by the front door, values do little to drive profits.
As a former Chief Financial Officer and Senior Executive of several corporations, I was often asked to write policies and guidance documents on a wide range of issues stemming from employee inappropriate behavior. My favorite was a policy on Not Using Corporate Credit Cards for Personal Purchases. This was requested by a Divisional General Manager shortly after he hired a new Sales Manager and told him he should invest in a couple of new suits. The GM did not intend for the Sales Manager to purchase new clothes on the company’s credit card, but understood how his conversation could have been misunderstood. In the Sales Manager’s second month with the company he purchased all new living room furniture for his home on his corporate credit card. When questioned, he justified the purchase as a business expense, because he used his home to entertain customers. That didn’t fly with anyone and, in my opinion he was just unethical. If having a value statement guided employee behavior there should be no need for corporate policies, as the overall guiding principles are written on the wall, right?
Companies are not stagnant every time a person is introduced into or taken out of an organization, it changes incrementally. The real uncertainly however is whether the company improves, deteriorates or shifts direction entirely. Consider the Asch conformity experiments . Groups of students were asked to participate in a "vision test." In reality, all but one of the participants were confederates of the experimenter, and the study was really about how the remaining student would react to the confederates' behavior.
Each participant was put into a group with 5 to 7 "confederates" (people who knew the true aims of the experiment, but were introduced as participants to the naive "real" participant). The participants were shown a card with a line on it, followed by another card with 3 lines on it labeled A, B, and C. The participants were then asked to say which line matched the line on the first card in length. Each line question was called a "trial". The "real" participant answered last or next to last. For the first two trials, the participant would feel at ease in the experiment, as he and the confederates gave the obvious, correct answer “B”. On the third trial, the confederates would all give the same wrong answer. There were 18 trials in total and the confederates answered incorrectly for 12 of them. These 12 were known as the "critical trials". The aim was to see whether the real participant would change his answer and respond in the same way as the confederates, despite it being the wrong answer. In a control group, with no pressure to conform to an erroneous view, only one participant out of 35 ever gave an incorrect answer. However, when surrounded by individuals all voicing an incorrect answer, participants provided incorrect responses on a high proportion of the questions (32%). Seventy-five percent of the participants gave an incorrect answer to at least one question If you want a quick laugh click on the following link from a classic Candid Camera video posted on Youtube and you will recognize the Asch Experiment in action. https://www.youtube.com/watch?feature=endscreen&NR=1&v=OC_JfCWYnTQ
So how do you get the kind of performance that Kotter and Heskett’s research shows is possible? First you must understand that behavior is all you get from your people. You pay for it whether it's productive, pointless, or pernicious. Second it is a fallacy that companies operate under that if you hire people who share your core values they will behave accordingly. Evidence is overwhelming, values do not drive behavior. However, behaviors are completely manageable. Managing behaviors starts with doing the hard work of defining the behaviors you want and the behaviors that are absolutely not acceptable. You use values to motivate that behavior. And finally, defining and executing the leadership behaviors that deliver the desired employee behavior that is highly motivated. Behavior, motivation and leadership are tightly bound. This innovative approach calls for a deeper and more professional role for Human Resources, including the careful work of constructing jobs that cause the employee to be self-motivated and taking complete ownership of staffing decisions.
Finally, since your current management team is responsible for the corporate culture, accepted behavior and results that you presently experience, it is not unreasonable to bring in outside assistance in transforming your company. Start by changing your own behavior and taking action. Start by contacting the experts at THNK. See our company page at Built in Chicago.
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