Are we doing this just for money? Is that it? Some companies will answer, yes, absolutely, and if we don't remember that, our shareholders and competition will hammer us. The Milton Friedman line that the social responsibility of companies is to maximise shareholder value, and that's sufficient, has a strong following. It is not without force. Others say that entrepreneurs, in particular, do what they do because they are motivated by an irresistible urge to build, to perfect, to bring to reality, to win, even to make history. More like artists than traders, even when sufficient money is made, they still press on.
A debate which pits shareholder value against values or vision creates a false dichotomy.
In her Monday morning blues column this week, Lucy Kellaway of the Financial Times poured a lot of cold water, again, on vision statements. Their merit, she concluded, was that they only served as internal, and sometimes external, advertising statements. This is too reductionist and cynical. First of all, vision and value statements will be quite useless as advertising messages unless they describe something substantive about a business. Employees will be the first to see through guff, followed quickly by external audiences.
Second, values and vision do seem to play a role in underpinning longstanding, enduring and especially successful businesses.
Next Thursday, The Minister for Public Enterprise, Ms O'Rourke will be the keynote speaker at a conference organised by international consultants, Blessing/White. A main theme of the conference will be "identifying and aligning organisational and employee skills and values". Immediately you can see that this is controversial territory. First of all, do organisations really have values? And what does aligning them with employee values mean - an encroachment into the moral beliefs of employees, the imposition of a corporate world view on free individuals who only happen to work for the company?
"For values to have a significant impact, there must be a degree of alignment between the values of the company and those of employees", a report commissioned by Blessing/White says, adding that companies need diversity and "value-clones" are not the aim.
The core question is what are "values" in this context? The description quoted in Blessing/White's report is that of Gerry Porras and James Collins of Stanford Business School, who wrote that core values are "the organisation's essential and enduring tenets - a small set of guiding principles; not to be confused with specific cultural or operating practices; not to be compromised for financial gain or short-term expediency". Values, therefore, in this context are not what we would commonly associate with morality. This helps to remove obfuscation and some discomfort with the notion of corporate values and a possible imposition on employees.
Porras and Collins, in their book Built to Last about visionary companies, clarify the issues. They say visionary companies - those they describe as the best of the best in their industries, enduringly successful over many years - have a cluster of objectives, of which making money is only one. "They seek profits, but they're also guided by a core ideology, core values and a sense of purpose beyond just making money", Porras and Collins write.
Values could include any of: teamwork, zero-defect manufacturing, constant improvement, lowest-cost service delivery, total quality, non-confrontational management, open communication, creativity, boldness. But "there is no right set of core values for a visionary company. Core values don't have to be `enlightened' or humanistic (although they often are)," they say.
So if the content of core values doesn't matter, what does? "The crucial variable is not the content of a company's ideology, but how deeply it believes in its ideology and how consistently it lives, breaths and expresses that in all it does".
This is the key - company "values" are akin to an ideology, a guide to action throughout the entire organisation, over many years, an explanation for why all this stuff we do matters beyond short-term profit maximisation. This view of company values explains also why companies cannot credibly decide one day to have values or appropriate them from elsewhere; they have to be ingrained, or they'll either not exist or be haphazard and useless. It also explains better the idea of alignment of company values with individual values.
Seen not as moral values, but as ideology, the alignment question becomes one not of finding common ground between a company morality and individual belief, but more of a shared psychological orientation. This is mostly in areas which are not the traditional domain of morality. The next questions are how this idea of enduring, outperforming companies with strong core values fit into the dot.com world. Secondly, are there any Irish companies that could be described as enduringly successful (or likely to be so), the best of the best, rooted in core values; in short, visionary? And could the entire country possibly be visionary?
