The Importance of Values to Leadership and Business Performance

The story of a smart, talented individual hired to repair an ailing company, only to fail and cost the company dearly in the process, isn’t unfamiliar. When values of a leader don’t match up with those of the company, leader-subordinate relationships may spiral out of control, taking the whole company down with them.

Download The Culture Clash and discover the impact values have on motivation, culture fit, leadership style, and biases within a work environment.

Many business owners and managers have likely found themselves in a predicament similar to the one Eric Sinoway describes in a recent blog for the Harvard Business Review.

One of his firm’s top performers was having a detrimental impact on the company culture. Should he and his partner continue to support and reward the employee based on his results, or should they cut him loose? How do you weigh the results a person gets vs. how he or she gets them?

Culture is a crucial factor in business success. There are dozens of stories of how a company’s culture either positively or negatively impacted its business.

Sinoway goes so far as to quote a Harvard Business School professor who claimed, “maintaining an effective culture is so important that it, in fact, trumps even strategy.”

Sinoway proposes there are four types of employees in terms of culture:

• Stars – Employees who perform well and align with organizational values
• High Potentials – Employees whose performance could improve, but who align with organizational values
• Zombies – Employees who neither perform well or align with organizational values, and
• Vampires – Employees who perform well but fail to align with organizational values.

Vampires, Sinoway said, can prove the most destructive, since most companies are reluctant to fire top performers. In this particular employee’s case, Sinoway knew he had to let him go.

For more about how values impact organizational culture and how culture can affect performance, check out our three part series, The Power of Unconscious Biases, The Value of Values, and The Culture Clash.

Many business owners and managers have likely found themselves in a predicament similar to the one Eric Sinoway describes in a recent blog for the Harvard Business Review.

One of his firm’s top performers was having a detrimental impact on the company culture. Should he and his partner continue to support and reward the employee based on his results, or should they cut him loose? How do you weigh the results a person gets vs. how he or she gets them?

Culture is a crucial factor in business success. There are dozens of stories of how a company’s culture either positively or negatively impacted its business.

Sinoway goes so far as to quote a Harvard Business School professor who claimed, “maintaining an effective culture is so important that it, in fact, trumps even strategy.”

Sinoway proposes there are four types of employees in terms of culture:

• Stars – Employees who perform well and align with organizational values
• High Potentials – Employees whose performance could improve, but who align with organizational values
• Zombies – Employees who neither perform well or align with organizational values, and
• Vampires – Employees who perform well but fail to align with organizational values.

Vampires, Sinoway said, can prove the most destructive, since most companies are reluctant to fire top performers. In this particular employee’s case, Sinoway knew he had to let him go.

For more about how values impact organizational culture and how culture can affect performance, check out our three part series, The Power of Unconscious Biases, The Value of Values, and The Culture Clash.

By now, most people have heard about Greg Smith, the former Goldman Sachs vice president who resigned in a searing article on the New York Time’s op-ed page. The former investment banker has been making news again this week following the release of a book detailing his experiences at the storied firm.

In his op-ed article, Smith leveled intense charges against the firm’s corporate culture, calling it toxic and destructive, and said that the firm promoted morally bankrupt people.

Although there is a fair amount of question regarding his allegations, Smith’s article and subsequent interviews bring up an interesting topic – the effect of leaders’ values on corporate culture. From Apple to Zappos, there are hundreds of examples of the positive effect a CEO can have on his or her company’s culture. Unfortunately, there are just as many about what happens when that effect takes a dark turn.

For more about how leaders’ values can affect company culture, check out Eric Sinoway’s recent blog on the Harvard Business Review, or take a look at our whitepapers The Power of Unconscious Biases and The Culture Clash.

By now, most people have heard about Greg Smith, the former Goldman Sachs vice president who resigned in a searing article on the New York Time’s op-ed page. The former investment banker has been making news again this week following the release of a book detailing his experiences at the storied firm.

In his op-ed article, Smith leveled intense charges against the firm’s corporate culture, calling it toxic and destructive, and said that the firm promoted morally bankrupt people.

Although there is a fair amount of question regarding his allegations, Smith’s article and subsequent interviews bring up an interesting topic – the effect of leaders’ values on corporate culture. From Apple to Zappos, there are hundreds of examples of the positive effect a CEO can have on his or her company’s culture. Unfortunately, there are just as many about what happens when that effect takes a dark turn.

For more about how leaders’ values can affect company culture, check out Eric Sinoway’s recent blog on the Harvard Business Review, or take a look at our whitepapers The Power of Unconscious Biases and The Culture Clash.

Yahoo recently announced the hiring of Marissa Mayer – employee number 20 at Google – as its new CEO. Her appointment is noteworthy for a few reasons; she has been appointed CEO in a notoriously male‑dominated industry, she is the youngest CEO of a Fortune 500 company, and as has been widely reported, Ms. Mayer is pregnant and expecting her first child in October. The vast majority of press concerning her appointment to date has centered on this last bit of news, inciting discussion and debates about balancing careers and personal lives, and how she will manage through late-term pregnancy and her maternity leave. While this will certainly be an adjustment, Ms. Mayer will enjoy an army of help and plethora of resources that most new parents have never dreamed of. She will be able to manage this transition just fine.

In all the excitement concerning her pregnancy, few are writing about the real challenges that await Ms. Mayer as the new chief of Yahoo. For 13 years she has been with Google, leading the charge as the company grew from the tech nerd’s search engine of choice with a funny name, to the dominant search, cloud, mobile, and advertising giant we know today. Fortune has named Google the top company to work for in 3 of the past 6 years, allowing them to attract top talent in the industry. Google has developed a culture of success.

On the other hand, Yahoo has been a steady state of decline during the same period. An early internet darling in the late 20^th century, Yahoo has gradually ceded ground to others in areas such as search, content, mail, and advertising, all areas where they were formally leaders. Ms. Mayer is Yahoo’s 4^th CEO in as many years (not including interim CEOs), and former leadership has been criticized for failing to provide any direction or strategic leadership. Yahoo’s sales peaked at over $7 billion in 2008, and have steadily fallen to less than $5 billion in 2011.

All of this points to the biggest challenge; changing the culture at Yahoo. Where Google was a confident culture that expected to succeed, Yahoo’s culture is one that has been continually losing ground and lacks confidence in leadership. Yahoo has been losing out in the talent war to organizations like Google, Facebook, or promising start-ups in Silicon Valley. Ms. Mayer will need to convince Yahooers that they can be successful, and that they can trust her vision. She will need to put in place a strategy to recruit, develop, and retain the highly-prized talent that helped Google be so successful.

We know that leadership is not about the individual, and Ms. Mayer cannot expect to single-handedly rescue Yahoo from its recent woes simply by decreeing a new strategy or direction. Leadership is about facilitating the performance of others, about building and maintaining high-performing teams, and about winning and beating the competition. The biggest challenge that Ms. Mayer will face is building a company culture that, after years of losing ground and churning through leadership, believes it can compete and win against the Googles of the world.

Yahoo recently announced the hiring of Marissa Mayer – employee number 20 at Google – as its new CEO. Her appointment is noteworthy for a few reasons; she has been appointed CEO in a notoriously male‑dominated industry, she is the youngest CEO of a Fortune 500 company, and as has been widely reported, Ms. Mayer is pregnant and expecting her first child in October. The vast majority of press concerning her appointment to date has centered on this last bit of news, inciting discussion and debates about balancing careers and personal lives, and how she will manage through late-term pregnancy and her maternity leave. While this will certainly be an adjustment, Ms. Mayer will enjoy an army of help and plethora of resources that most new parents have never dreamed of. She will be able to manage this transition just fine.

In all the excitement concerning her pregnancy, few are writing about the real challenges that await Ms. Mayer as the new chief of Yahoo. For 13 years she has been with Google, leading the charge as the company grew from the tech nerd’s search engine of choice with a funny name, to the dominant search, cloud, mobile, and advertising giant we know today. Fortune has named Google the top company to work for in 3 of the past 6 years, allowing them to attract top talent in the industry. Google has developed a culture of success.

On the other hand, Yahoo has been a steady state of decline during the same period. An early internet darling in the late 20^th century, Yahoo has gradually ceded ground to others in areas such as search, content, mail, and advertising, all areas where they were formally leaders. Ms. Mayer is Yahoo’s 4^th CEO in as many years (not including interim CEOs), and former leadership has been criticized for failing to provide any direction or strategic leadership. Yahoo’s sales peaked at over $7 billion in 2008, and have steadily fallen to less than $5 billion in 2011.

All of this points to the biggest challenge; changing the culture at Yahoo. Where Google was a confident culture that expected to succeed, Yahoo’s culture is one that has been continually losing ground and lacks confidence in leadership. Yahoo has been losing out in the talent war to organizations like Google, Facebook, or promising start-ups in Silicon Valley. Ms. Mayer will need to convince Yahooers that they can be successful, and that they can trust her vision. She will need to put in place a strategy to recruit, develop, and retain the highly-prized talent that helped Google be so successful.

We know that leadership is not about the individual, and Ms. Mayer cannot expect to single-handedly rescue Yahoo from its recent woes simply by decreeing a new strategy or direction. Leadership is about facilitating the performance of others, about building and maintaining high-performing teams, and about winning and beating the competition. The biggest challenge that Ms. Mayer will face is building a company culture that, after years of losing ground and churning through leadership, believes it can compete and win against the Googles of the world.

Over the past several years, Hogan has held an annual Game Day as a way to bring everyone together and have a little fun on a Friday afternoon. Hogan Game Day involves teams competing in a series of Minute to Win It-style challenges where individuals earn points for their teams based on successful completion of the game. Not only does the winning team get a swanky trophy and bragging rights for the year, they also get to make a donation to the charity of their choice.

Given our ambitious and driven nature, things can get a little competitive. Your teammates are cheering you on, while the competition will do whatever it takes to rattle your concentration and get in your head, which can make stacking chocolate Ding Dongs on your forehead pretty challenging.

Beyond the fun of taking a Friday afternoon off to compete in silly games with your coworkers, Game Day serves another important function – it helps get people engaged. Hogan recently published a whitepaper on the importance of engagement in the workplace. One of the key points from this paper was that engagement has an impact on a company’s bottom-line. When employees are disengaged, productivity suffers.

So, how do we get (and keep) employees engaged? Research shows that it starts with senior management. When bosses treat their employees with concern and respect, workers tend to feel valued and will go above expectations.

There are many techniques bosses have at their disposal to help increase employee engagement. Although extravagant corporate outings like whitewater rafting excursions tout their ability to help build and engage teams through improved communication skills and enhanced trust among team members, these excursions are not only costly but incredibly time consuming. Luckily, there are much simpler ways for managers to get their employees engaged.

The first step for organizations to increase engagement is to hire employees that are more likely to be engaged. An obvious first step would be to hire people that possess the relevant knowledge, skills, and experience necessary to perform the job. However, there is more to engagement than simply being able to perform the job. It’s important that people also like their job. As such, understanding organizational and cultural fit is imperative to having engaged employees. If people do not find congruence between their values and the values of the company, we are more likely to see dissatisfied and disengaged workers.

Once the right people are in the position, it is important to keep people engaged. A few ways to keep people engaged include increased communications between boss and employee, providing opportunities for stretch assignments, and hosting events that display appreciation for the employees. When managers have regular communications with their employees, they have an opportunity to reinforce how the employee’s work has contributed to achieving the mission of the organization, which should help provide a sense of meaning for their job. Providing stretch opportunities allows managers to challenge their workers and allow them a chance to grow their skill sets and responsibilities. Lastly, having appreciation events such as game days and other outside the office gatherings can allow workers to have fun and bond with one another. Probably the most important thing to consider with any engagement activity is to be genuine. If the initiative seems forced, chances are the employees will see right through it and the activity may backfire.

Over the past several years, Hogan has held an annual Game Day as a way to bring everyone together and have a little fun on a Friday afternoon. Hogan Game Day involves teams competing in a series of Minute to Win It-style challenges where individuals earn points for their teams based on successful completion of the game. Not only does the winning team get a swanky trophy and bragging rights for the year, they also get to make a donation to the charity of their choice.

Given our ambitious and driven nature, things can get a little competitive. Your teammates are cheering you on, while the competition will do whatever it takes to rattle your concentration and get in your head, which can make stacking chocolate Ding Dongs on your forehead pretty challenging.

Beyond the fun of taking a Friday afternoon off to compete in silly games with your coworkers, Game Day serves another important function – it helps get people engaged. Hogan recently published a whitepaper on the importance of engagement in the workplace. One of the key points from this paper was that engagement has an impact on a company’s bottom-line. When employees are disengaged, productivity suffers.

So, how do we get (and keep) employees engaged? Research shows that it starts with senior management. When bosses treat their employees with concern and respect, workers tend to feel valued and will go above expectations.

There are many techniques bosses have at their disposal to help increase employee engagement. Although extravagant corporate outings like whitewater rafting excursions tout their ability to help build and engage teams through improved communication skills and enhanced trust among team members, these excursions are not only costly but incredibly time consuming. Luckily, there are much simpler ways for managers to get their employees engaged.

The first step for organizations to increase engagement is to hire employees that are more likely to be engaged. An obvious first step would be to hire people that possess the relevant knowledge, skills, and experience necessary to perform the job. However, there is more to engagement than simply being able to perform the job. It’s important that people also like their job. As such, understanding organizational and cultural fit is imperative to having engaged employees. If people do not find congruence between their values and the values of the company, we are more likely to see dissatisfied and disengaged workers.

Once the right people are in the position, it is important to keep people engaged. A few ways to keep people engaged include increased communications between boss and employee, providing opportunities for stretch assignments, and hosting events that display appreciation for the employees. When managers have regular communications with their employees, they have an opportunity to reinforce how the employee’s work has contributed to achieving the mission of the organization, which should help provide a sense of meaning for their job. Providing stretch opportunities allows managers to challenge their workers and allow them a chance to grow their skill sets and responsibilities. Lastly, having appreciation events such as game days and other outside the office gatherings can allow workers to have fun and bond with one another. Probably the most important thing to consider with any engagement activity is to be genuine. If the initiative seems forced, chances are the employees will see right through it and the activity may backfire.