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The value of creating order

The value of creating order

Cynics may dismiss them, but company values have a serious purpose.

When chief executives start banging on about company values, people start to switch off. Yawn. Boring. Irrelevant. Throw in the words culture, employer value proposition, employer of choice and diversity, and if you're still awake, you probably work in human resources. It can be hard to convince cynics they should take these well-meaning concepts seriously. But just because something is difficult, it doesn't mean it's not worth doing.

While poor company values are often held up as the core reason US energy company Enron collapsed in 2001 and, in Australia, the National Australia Bank lost $360 million because of rogue traders in 2004 - most workers don't believe they will be caught up in such a scandal.

They may dismiss company values as an attempt to forestall fraud, an exercise in group thinking, or a marketing campaign designed to project a wholesome image of the company.

But the director of business consultancy Mettle Group, Katharine McLennan, says setting out the values of an organisation has a more straightforward purpose - it creates order.

"The reason the values are important - because a lot of 'command and control style', old-fashioned executives think it sounds like a load of rubbish - is because the imperfect values in an organisation create so much noise in people's brains that it takes the focus away and takes away the ability of the employee to create," she says.

People get distracted when they perceive unfairness in the workplace or see bad behaviour.

McLennan, who is involved in setting up a summit of "neuroleadership" in Sydney in September, says brain research shows people are distracted when they perceive threats to their status, certainty, autonomy, relationship to those around them and fairness.

"When we are attacked on any one of those five things, we feel like it is not right. Our ancestral brain takes over and it overrides our newly evolved ability to create and innovate and think - to be able to create new things instead of just regurgitate."

Last month, she was sharing the stage at the HR Directors Forum in Sydney with Sharyn Shultz, the human resources executive director for online bank ING Direct. Up for discussion was ING Direct's cultural program, The Orange Way. (ING is a Dutch company and orange is the national colour).

Shultz says ING Direct in Australia decided to rewrite the company values 18 months ago, following a slight change in the direction of the bank.

The six values were reduced to four and rewritten to become: simple and straightforward; bold and different; delivering together; passionate and energetic.

Then to ensure people paid more than just lip service to them, they were linked to performance management and embedded in management training.

"It starts for us at the moment you come in for the interview.

"We share what the values are, they are integrated into the interview style and the questions we use, and we look for people who will fit," Shultz says.

There is a monthly recognition program, where people who "live" the values are recommended by their peers and get a chance to drive a convertible Renault for a month. The only catch is it is orange.

Shultz says the prime benefit of the values are they connect the workers emotionally to the business.

"What it does for us is it helps people, sets boundaries, helps them understand what is expected of them and what is not, and how they fit into that."

McLennan says putting the values on the corporate intranet is not as important as the example set by leaders. "What I like about what ING Direct is doing is they are integrating them across all the levers of the culture. Role modelling is 95 per cent of where your values are coming from.

"Leadership behaviour absolutely sets the values. Who cares how they are written? People will constantly be looking up to get the cues of how they sit in the culture."

She says while company values tend to look the same, it doesn't negate their worth. What differs is how they are embedded in the company culture.

"At Enron, the values were communication, respect, integrity and excellence and, in fact, they had a chief ethics officer.

"When I went to business school in California, Enron was the place to go because of the way they lauded their values. So it is not so much the values themselves that matter, the names of the values, because they are the same. It is the way people express those values."

ING Direct provides an example of how an organisation can bring those stated values to the forefront of employees' consciousness.

"That will make them conscious of their behaviour because most of us are operating on autopilot most of the day and have no idea of whether we are living the values or not."

This is not to say any old words can be used: "I actually think the words are incredibly powerful when used right and people live up to them. They are also incredibly disempowering when people flaunt them and then don't live up to the behaviours."

Fairfax Business Media

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