By Celina Chew
Published on July 11, 2011
The values of a company define its character - who it is, what it stands for, what it believes in and how it treats its stakeholders and the environment in which it operates. It is rare today for a multinational company not to have a formal statement of its corporate values. Although the direct link between values and business performance is hard to measure, most companies believe that they need to demonstrate strong corporate values. This is especially important for reputation and risk management; strong, clear corporate values enhance brand and reputation building, recruitment and retention, and often serve as a shield in managing risk in increasingly complex legal and regulatory environments.
In the article "The Value of Corporate Values", Reggie Van Lee, Lisa Fabish and Nancy McGraw describe "values" as a company's "institutional standards of behaviour". After defining such values, companies try to embed them in the company's practices in the hope that they will reinforce behaviours that benefit the company. This, in turn, will strengthen a company's commitment to its values.
However, merely having an articulated set of corporate values is not sufficient. If corporate values are not authentic or lived by the company, they can [according to Patrick M Lencioni in "Make Your Values Mean Something"] be destructive and not merely harmless, as some executives assume. He said: "Empty value statements create cynical and dispirited employees, alienate customers, and undermine managerial credibility".
Therefore, it is important to consider the following questions: What are your company's values? Have they been articulated in a simple, user-friendly way? Can your employees [or you] repeat them? Are your employees acting consistently with them?
Bayer recently re-formulated its corporate values, using the acronym "LIFE". Each letter stands for a value: L for Leadership, I for Integrity, F for Flexibility and E for Efficiency. Each value is further defined by a set of examples that reflect the essence of each value and give guidance to employees as to how each value is to be lived and applied in their daily work. The LIFE values also fit beautifully with our mission statement: "Bayer: Science for a Better Life", namely, innovating and inventing for solutions that improve society, especially, in the areas in which Bayer operates. Innovation and science are part of Bayer's corporate DNA. We reformulated our corporate values to make them easier to remember, more focused and more user-friendly.
The corporate values of many companies reflect similar concepts like integrity, collaboration, teamwork, innovation, openness and honesty, focus on customers. It is therefore important to breathe life into corporate values and integrate them into every business-related activity undertaken by the company's employees. They should be embedded in the company's processes, from recruitment to performance management, from research to production. In other words, corporate values should be applied by employees when conducting the company's business as well as dealing with colleagues, business partners and stakeholders. Employees should be measured against such corporate values to ensure that corporate values form the basis for every decision made in the company.
Bayer's aspiration is that every employee will apply the LIFE values as a check-list for every business-related activity. In order to ensure that the LIFE values are interpreted, understood and lived consistently in the company, open and candid dialogue between management and employees about LIFE has been implemented in the form of structured discussions and workshops, and the sharing of LIFE stories and anecdotes. Employees are encouraged to be creative and inspiring in the way they live LIFE and make it relevant in their daily work.
Corporate values define a company's character and influence the success of a company by providing a set of shared fundamental beliefs that gives a cohesive and consistent direction for the company. To borrow the words of James C. Collins and Jerry I. Porras ("Building Your Company's Vision"), "it is more important to know who you are than where you are going, for where you are going will change as the world around you changes…. Leaders die, products become obsolete, markets change, new technologies emerge, and management fads come and go but core ideology should ensure as a source of guidance and inspiration". Corporate values can guide and inspire if they are well articulated, well embedded and authentic.
Celina Chew is senior Bayer representative for the Country Group North Asean and managing director of Bayer Thai.