As an HR practitioner, I have watched with interest not so much the media frenzy surrounding the Volkswagen debacle (although that has itself been instructive) but rather the company itself. It’s behaviour as an organization at this time is a starting point for yet another chapter in the discussion that is often held around corporate “values”. I think, though, this presents really clear lessons.
We in HR are often called the guardians of culture; the change champions. It’s important to remember that these responsibilities are delegated to us by the CEO. No officer in any organization had any authority that is not delegated first from its board, then from its CEO.
We in HR are co-labourers with the CEO to firstly nurture and then embed the desired culture, skills, and behaviours of the organization. But let’s take a step back first. The primary stakeholders in any company are those who have invested money in it. They have done so, in order to make MORE money. Specifically, they are willing to assume some level of business risk, in order to make a return on their money that is above what can be generated by simply putting safely it in a bank. That is the primary purpose of a business: overcome the risks in a lucrative opportunity, in order to make a high return for shareholders.
The authority delegated to the CEO by the board is the same. Create a significant return on shareholder funds and minimise risk to those same investments.
We have not yet mentioned the environment, culture, products, services, values, health and safety, etc. There is a reason for that. They are not the goals of business. They are either enablers or constraints on the primary goal, or the method of achieving that goal, but they are not THE goal.
Volkswagen demonstrated unequivocally to the entire world that it’s goal, above everything, is to make money by selling cars. It also demonstrated unequivocally to the entire world that in order to maximise sales and make the maximum profit possible, it is willing to do anything when it thinks it won’t get caught. Its pursuit of money supersedes everything, and self restraint was completely abandoned in that pursuit. It knew that the combination of engine power, and fuel economy, was incompatible with environmental standards, so it faked the development of technology that appeared to give environmental agencies what they wanted, and consumers what THEY wanted.
That brings us to the concept of corporate behaviour and corporate values. Values are intrinsic qualities. Theoretically, they are long term and core to an identity. When we talk about an individual, perhaps values are easier to understand than for an organisation. There is no artificial statement of values adopted once we commence our existence. We get our values as we grow, and as we participate in family and society. Our values are made, not chosen. We grow to believe in what is truly important. Values are why we do what we do, and they govern what we do. Why we choose work over family, or family over work. Stability over risk and risk over stability. Entrepreneur over employee or employee over entrepreneur. Each of life’s choices is made on the foundation of our values. And every behaviour we exhibit is also, not surprisingly, a product of values. In fact, it is possible to say that our behaviour is the best (and perhaps only) indicator of what we truly value!
A wise man once said “Where your treasure is, there is your heart”. I love that inversion of concepts, where we normally talk of our desire and our priorities (heart) leading to results (treasure), Jesus Christ said that our treasure (results) reveals our heart (priorities, desires). So we can see a persons values not from what they SAY they value, but by looking back on their life and seeing what they have ACTUALLY prioritised. from this perspective, values are revealed, not predicted. Shown, not proposed. Its a a hindsight thing. Aspirations can be stated in advance, values can only be recognised in hindsight.
Volkswagen has shown us it’s true values. Not its corporate values. Well, lets be honest and call them what they were – marketing tools. Their websites talk at length of sustainability, responsibility, partnership. It says these are it’s true values.
Lets look back, and we know that their real values, as revealed by their behaviour, are not sustainability. Or responsibility. Or partnership. Their real values, as demonstrated by their ACTIONS, are Money. Gaming the system. Appearances. Deceit. Environment be damned. Integrity be damned. Responsibility be damned. Give us sales. At, clearly, ANY cost. Honestly, even if their cars were exceptional, would you want a car from a company like that? If there is a comparable alternative, thats where I am shopping for sure. If I were to spend a single dollar on Volkswagen, I would be endorsing and embracing the values and the behaviour that built the lie.
The values they subscribe to on their website, are clearly simply the enunciation of things that they think will make people buy their cars. Things that will not alienate customers. Given how deliberate their actions were, it is feasible to say they do not even ASPIRE to those values. They had no intention at all of acting in accordance with those values. Only of APPEARING to act in accordance with those values, because, if they didn’t, people would buy cars from some company whose website said they DID value those things.
Thats the real problem. Companies CHOOSE values, they don’t “grow” them into their DNA. Corporations don’t even HAVE DNA. They have people who have DNA. And because values are adopted, chosen from a list, they are therefore flexible, malleable and sadly, sometimes negotiable. They are not the product of a lifetime of experiences, they are a marketing device to draw in the consumers (and in the case of Volkswagen, cynically so), or an aspiration. Aspirations are good, laudable and respectable, but lets not confuse them with actual values. Unless of course, a company is willing to be ruthless in pursuing their aspirations until they are forged into their employees DNA as values. But there are precious few of THOSE companies out there. Do you know of any willing to fire the cash cow salesman because of a values fit?
So what does this discussion mean in the HR space? We are often delegated the responsibility of governing culture. Clearly in Volkswagen, the responsibility came with no authority whatsoever, and I think, this is more common than we like to concede. Those of us who have the KPI of Culture in our Position Descriptions, do we have the authority to direct change and to challenge behaviour not in accordance with stated corporate values? If we do not, then the KPI of governing culture is a fiction. We cannot be responsible for culture unless we are empowered to read, lead and govern culture.
That means participating in decisions, conversations, debates, strategy formulation, in a way that gives us visibility on the connection between corporate values, and the behaviour of the senior team that are the primary drivers of behaviour in the organisation. An HR manager far away from those environments cannot and should not permit, the inclusion of a KPI on culture in their position description. And most CEO’s should not kid themselves. THEY drive the culture of the organisation. their behaviour is by far the most influential. Their approval the most inspirational. Their disapproval the most powerful. Their priorities, the most contagious. Unless the CEO is a recluse, their values become the actual, real, practised and practical values of their senior leadership team. They cannot and should not be allowed to abdicate or avoid this truth.
The senior leadership team. They lead large teams, and drive deliverables for the CEO and shareholders. They get their cues from the CEO, but they then step away from the EXCO meeting and work away from the CEO’s direct line of sight. So their own values become hugely relevant to their teams. A CEO can insist on integrity, for example, but a senior manager can work the system and in so doing, teach their team to do likewise.
I was a consultant for a time, and saw many things. I worked for a company that prohibited bribes and unethical behaviour in their home country, but had a specific fund for exactly that when working internationally. I worked for another company that valued integrity, but allowed documents to be falsified and profits to be misreported. One that embraced racism and gender inequality as a way to increase profits. All their value statements were excellent. Integrity, fairness, diversity, you name it, they had subscribed to it. But when it came down to brass tacks, the pursuit of money ruled everything.
Volkswagen’s corrupt value system is sadly not uncommon. Its not so common, though, to get caught, as they did, and many companies rely on the short term win of profit, to excuse behaviour that is discordant with their values. We as HR practitioners, need to make ourselves credible activists on behalf of a great company culture. yes, we need to be commercially valuable to the business, and we need to drive many initiatives on behalf of building a great team.
If our companies have a value statement, it is our responsibility to work those values into conversations, into performance appraisals, into mentoring and coaching, and into leadership development. We need to hire for the right values, and fire for the wrong ones. Creating the best possible culture is a deliberate act. A deliberate series of acts, hour by hour, day by day, and week by week. If those values area convenience, and not a commitment that sticks, we have a choice. Become the change agent that will bring about that cultural transformation, or move on.