The Nonsense of Corporate Values
The idea that corporate values somehow change the way people in organisations think and behave is perhaps one of the craziest unquestioned beliefs about work life. Statements like ‘everybody just needs to live our values’ are bandied about unchallenged as if they had some meaning. Internal communications teams create an industry of spin, reverse engineering initiatives and targets to line up under the values. HR teams create a parallel cottage industry to generate awards for ‘living the values’ and force the values into performance appraisal frameworks. This leaves poor middle managers to pretend that trying to assess whether employees are ‘living the values’ (whatever that even means) is firstly a good use of time and secondly makes any difference to how people behave. So much energy, focus, and time is wasted when other things - like delivering for the customer - continue to be predictably mediocre.
Values seem to fall into four categories. The first is the Silly Inverse, which contains values describing good behaviour, such as integrity, ethics, honesty, responsibility, trust, and doing the right thing. If you apply the inverse, these values become meaningless. For example, why would you want values of dishonesty, untrustworthiness, doing the wrong thing, etc.?
The second type of value is Delusional. Values in this category typically reflect the kind of organisation the CEO would like to lead, not the one they actually lead - and are, therefore, broadly meaningless fantasies. This category features innovation, agility, courage, passion, creativity, etc. The plaintive hope is that by adopting these corporate values, the organisation will somehow change itself to resemble them. I was once asked to be on a ‘pop-up board’ of external experts convened to help the HR director of a FTSE100 business think through one of their pressing issues. Her opening statement describing the issue made me laugh aloud, attracting several disapproving glances. She said: “Innovation is one of our core values, but the problem is that we’re not at all innovative.” For me, that statement perfectly captures the absurdity of the delusional value.
The third category of values is Compliance Rebadged. In this category, companies are legally obliged to demonstrate compliance, or shareholders expect action on specific topics they view as non-negotiable. Values in this category include safety, quality, diversity, inclusion, and sustainability. Finally, the fourth and probably most meaningless category is Basic Work Stuff. These values tend to be included when the team making up the values runs out of ideas. This category contains values such as teamwork, collaboration, relationships, etc. - stuff that no organisation in the world could function without anyway.
The problem with espousing Silly Inverse values is that people, in the end, will be people. Humans became the dominant species on our planet through their ability to collaborate and build large-scale societies. Partly, that was down to language development, which allowed us to create and share stories, meanings, and ideas. However, a large part was, and still is, that most people have a decent built-in moral compass, the ability to judge right from wrong, assess their actions’ impact on others, and feel a sense of empathy. A tiny minority will act in bad faith, disregard others, and maximise personal gain in ways the majority disapproves of. Research shows that power is a critical factor in this deviant behaviour.
The idea that most employees who naturally behave honourably must be told to act with ‘integrity’ or ‘do the right thing’ is insulting and condescending. Do we believe that most people would behave without integrity unless it appeared in the values that adorned their company-issued coffee mugs or stress balls? Equally ridiculous is the suggestion that employees about to misbehave would somehow change their intended course of action because a values poster over the urinals encouraged them to have the highest ethical standards (a real world example from a company I once visited). Values are the corporate equivalent of Baby on Board stickers, which new parents display on their back windshields in the misguided hope that seeing the sticker will magically persuade other drivers to behave better.
Here's an example of the typical type of twaddle about values featured in the Harvard Business Review article: It’s Time to Take a Fresh Look at Your Company’s Values (March 28, 2022).
“Values are the moral code of an organisation — the set of rules you all embrace and abide by that reflect the ethics of the people in the organisation and hold everyone accountable to the right standard of behaviour.”
It’s complete and utter rubbish. Almost every organisation where people behaved amorally or immorally had highly moral values. So, what happened? How did the values fail to uphold the proper standards of behaviour? How did this ‘moral code’ fail so spectacularly? Maybe they should have displayed the values posters in more toilets or handed out more values-branded stress balls. Here are just a few examples where values turned out to be entirely pointless - but the list is almost endless:
Wells Fargo Bank’s values: What’s Right for Customers, Ethics, People as a Competitive Advantage, Leadership.
Wells Fargo Bank agreed to $3bn in criminal and civil penalties for fraudulently opening millions of customer accounts without the customers’ knowledge. To try to redirect the blame, the bank subsequently fired 5,300 employees. Wells Fargo did what was wrong for the customers, acted completely unethically, used people as scapegoats and was slammed by a congressional committee for appalling leadership. A brilliant example of ‘values’ bullshit was contained in a 2012 document entitled The Vision & Values of Wells Fargo(1). Later-to-be disgraced Chairman, President & CEO John G. Stumpf had this to say: “Corporate America is littered with the debris of companies that crafted lofty values on paper, but when put to the test, failed to live by them. We believe in values lived, not phrases memorised.” Well said, John. Hilarious really.
Boeing’s values: Safety, Quality, Integrity.
Boeing agreed to pay $2.5bn in 2021 to settle US criminal charges that it hid information from safety officials about the design of its 737 Max planes, implicated in two fatal crashes that killed 346 people. In early 2024, after a door plug blew out in flight on another Boeing aircraft, the Federal Aviation Authority (FAA) told top Boeing officials that they had 90 days to develop a plan to address: “systemic quality-control issues to meet the FAA's non-negotiable safety standards”.
PWC Australia #1 Value: Act with Integrity.
PWC sold its lucrative government consulting business for $1 in 2023, attempting to contain a scandal in which it is accused of using secret information about government tax plans to make millions in fees from advising multinational companies on how to avoid the upcoming tax changes. This complete failure to act with integrity has led to the departure of the PWC Australia CEO and seven other senior partners, and criminal investigations are ongoing.
Ernst & Young #1 Value: [People who] Act with integrity
EY was hit with a record $100 million fine by the US government in 2022 after regulators discovered that the company knew some of its auditors were cheating on exams for several years and did nothing to stop it. The Securities Exchange Commission noted: “The SEC will not tolerate integrity failures by independent auditors who choose the easier wrong over the harder right.”
Delusional values are equally problematic because most organisations are inherently set up to defeat any attempts to resemble them. Take innovation, for example. CEOs are concerned about a lack of innovation in their organisations. One recent survey of global CEOs(2) shows that 45% think their organisation will no longer be economically viable in 10 years if it continues on its current trajectory. But why not make innovation a core value and get everyone to ‘live it’? Job done.
Or maybe it's not that simple. Do you want all your employees ‘living’ innovation – or do you want most of them to do their day job well and to think about improvements occasionally, while considering more of a ‘skunkworks’ approach to innovation away from the day-to-day? You might be better off focusing most of the organisation on doing the basic stuff well - like meeting your customers' by now low expectations (unless one of your values was customer service, in which case everything is undoubtedly fine…).
An excerpt from Magnetic Nonsense: A Short History of Bullshit at Work and How to Make it Go Away
1. http://www.damicofcg.com/files/74720/Vision%20%26%20Values.pdf
2. PwC’s 27th Annual Global CEO Survey, https://www.pwc.com/us/en/executive-leadership-hub/ceo.html