Values drive decisions and impact member relationships
People hold their values dearly. They are important to them. They are a force that directs a person’s life. Values affect relationships, how people spend their time, how they think about their work, and how they make decisions. Someone’s values might include honesty, integrity, respect, teamwork and communication. Like personal values, organizational values determine priorities and drive decisions. A common set of core values helps people work together to achieve goals. The productivity of the workplace and profitability are positively affected by values that encourage teamwork, decrease workplace frictions, inspire innovation and support the employees in serving the credit union’s members.
Studies show that when it comes to organizational values, it matters that leadership actually lives them. University of Chicago Booth School of Business published an in-depth examination of values: “The Value of Corporate Culture” by Luigi Zingales et al. The vast majority of S&P 500 companies list great sounding values on their websites. The top ones listed were, not surprisingly, innovation, integrity, respect, quality, and teamwork. Booth found, however, that the types of values that a company listed were not correlated with performance. Yet, Booth did find that when employees understood that their leaders lived the organization’s values, it moved the dial on profitability. Specifically, organizations exhibited measurably better performance when the employees sensed that “management’s actions match their words,” and that “management is honest and ethical in its business practices”.
So, applying values to decisions, matters for performance. Unfortunately, however, Gallup reports that only 23% of employees think they can apply their company’s values regularly in their work. Only a slightly greater percentage (27%) strongly believe in their company’s values. Gallup and Booth point out the dramatic disconnect that many companies face between stated values and the way many businesses operate. Since values drive decisions, when management’s actions don’t match stated values, other values are operating and disconnects take place.
Leaders must uncover what really is driving their decision-making. It takes courage and effort to look closely at how decisions are made and the principles that underpin them. But this knowledge is needed to create and maintain a culture that is a generator and sustaining foundation for productivity and profitability. Management must decide if the values truly guiding decisions are fully serving the credit union and its members. An outside advisor, as a trusted third party with expertise in culture, leadership and governance, can help. They can work together with both boards, the CEO and management to uncover the underlying principles that really are in operation. If the operating values do not fully support the business, they need to be adjusted. If adjustment is required, an advisor can help management determine how best to do so.
If continuous learning is a stated organizational value, what would being true to this value look like in day-to-day actions and decisions? Are budgets reflective of learning as a priority? Is learning incorporated into job descriptions and responsibilities? Are learning, skill growth, and leadership’s priorities for employee growth rewarded through compensation and recognition? Are managers held accountable for the learning and development of their staff? A culture rests on values, and employees notice whether management’s decisions align with them or not. Productivity and profitability hang in the balance.
