In its CSR statement Volkswagen says that: “living up to our social responsibilities is at the core of our corporate culture.”
Last week we found VW had spectacularly failed in this endeavour, reminding us that the era of corporate scandals ushered in by Enron (which, incidentally, had a great values statement) is far from over.
It is clear that having ticked the ‘values’ box, many companies fail to live up to the standards they theoretically set for themselves creating a gap between the ‘talk’ and the ‘walk’ which can alienate the public, leave employees cynical and disengaged and sometimes lead to outright corruption.
In their timely new book professors Edward Freeman of the Darden School of Business and Ellen Auster of the Schulich School of Business point out that high-profile corporate scandals only blight a small minority of businesses, and yet these scandals feed the narrative of the many detractors who say ‘business sucks’ and champion regulation and government intervention. At a time when we need business more than ever to solve society’s problems this is dangerous. It is essential that companies establish and live up to the ethical values a mistrustful public expects. This book provides a walker’s guide.
Fundamental to addressing the values gap in business is to understand that, as the authors say “business is a deeply human institution embedded within it rather than existing above it in some mythical free market land where everyone is a short term purely economic maximizer.” This understanding leads to the view that personal human values should not be put aside at work but should be the basis for corporate values. It is not acceptable to say that I did not agree with X but I had to do it for the business or for my career.
Being true to our own values, or even identifying what they are in a rapidly changing world is not easy, in an organization it is even less so. Freeman and Auster accept there are a great many conflicts between individuals and their interpretations of what values mean. What they propose is that, as children learn values from their parents through conversation, organizations need ongoing ‘living’ conversations with their employees and other stakeholders to establish their values.
They argue that too often companies’ values are handed down from on-high, with no employee input, discussion or feedback, and that to bridge this values gap, organizations should adopt a ‘Values through Conversation’ process. They suggest that ongoing collective conversations, both formal and informal, should be part of the corporate culture within organizations.
They also provide a model for action in the form of a simple template and a set of conversation starters that focus on four key aspects of values:
- Introspection and reflection – reflecting on who we are and how we do things
- Historical context – understanding our past and how it influences us
- Connectedness and relational – asking how all stakeholders can best work together
- Aspirational – articulating our hopes and dreams for the future
To what extent the values gap was at the root of the Volkswagen debacle is yet to be established, but the values gap is very often the reason for the disconnects between intention and reality that lead to unethical behaviour in business. In their book, Freeman and Auster use numerous compelling examples to illustrate this, both from organizations that have got it wrong and more optimistically from those organizations that are increasingly getting values right.
About Professor R. Edward Freeman
About Professor Ellen R. Auster
Bridging the Values Gap: How Authentic Organizations Bring Values to Life, published by Berrett-Koehler Publishers Inc., 2015, ISBN 978-1-60994-956-3