It is a rare company that doesn’t set out values
as a core part of their corporate mission statement. Quite frequently,
these values, when applied, are considered to be a positive contribution
to a working environment. Yet in the light of recent evidence,
values have the potential to backfire on leaders and cause employees
to feel cynical and disengaged from their workplace.
Sandra Cha, an assistant professor at McGill University, and Amy
Edmondson, of Harvard Business School, recently published a surprising
study on both the rewards and risks of interpreting corporate values.
By using a young and ambitious US advertising agency as a field study
(aptly named “Maverick Advertising”), Cha and Edmondson
found that, despite the good intentions of company leaders, when
employees perceive a misuse of values on part of their employers,
they become disenchanted. What frequently occurs is that employees
will associate, or interpret, different meanings to their company
values other than what the leaders of their company mean, thus placing
executive action under scrutiny of hypocrisy.
Value expansion – what occurs when people add personal interpretations
to the original meaning of a value – can often become a double-edged
sword. On one hand, values can enrich an employee’s experience
and association with their work (especially when they give it personal
meaning) but at the same time values can also turn employee’s
away from their organization if they perceive a breach in their leader’s
use of them.
Organizations that place a strong emphasis on their values are
often led through a Charismatic Leadership style. At the heart
of this
style is a leader who develops and implements a compelling vision,
one which generates people to rally around their cause. According
to researchers Boal and Bryson, who conducted a study on the subject
in 1988: Charismatic Leaders identify new opportunities in the environment,
map out a better future for their followers, and connect their followers’ needs
to greater values, goals or meanings. Numerous studies since this
time have reported the benefits of this leadership style, benefits
which include: enhanced motivation, performance, commitment, satisfaction,
and leadership trust. Cha and Edmondson based their study on the
premise that values play a crucial role in the process through which
a charismatic leader influences his or her followers.
Values are abstractions. Scholars define them as being “shared
prescriptive or proscriptive beliefs about ideal modes of behaviour.” Simply
put: People feel happy when their important values are fulfilled;
angry when these values are breached (or unfulfilled). Recent work
in this field has shown that self-concordance – the pursuit
of goals aligned with one’s values – creates positive
outcomes in the realm of job attitude and performance, life satisfaction
and an overall sense of well-being. Yet scholars are arguing that
characteristics, like mood and emotional intelligence, influence
how a person perceives the actions their leaders. So while leaders
can behave authentically and are being transparent in their expression
and behaviour according to their personal values, they can still
fail to influence employees who do not perceive them as “legitimately” promoting
their values.
The initial aim of Cha and Edmondson’s research was to explore
the positive effects of strong organizational values and how employees
coped with change in a small, idealistic organization. Yet as they
delved deeper into their findings, they observed how despite all
of the good intentions and strong effort exerted by the leader at
Maverick, employees grew to feel violated through the very value
system espoused by their CEO. Cha and Edmondson put it best: Violation
involves not only disappointment but also “feelings of anger,
resentment, bitterness, indignation, and even outrage that emanate
from the perception that one has been betrayed or mistreated.” A
big problem.
As the two authors state in an interview with HBS Working Knowledge:
The “key factor that set the stage for employees seeing the
CEO as hypocritical was that employees interpreted the values somewhat
differently than the CEO did. For example, the CEO articulated values
of unpretentiousness and a sense of community. Employees interpreted
his statements as implying a core value of equality—an absence
of hierarchy. As another example, discussing diversity, one employee
made a leap to broader ideals of equality and treating employees
like family:
Read the story of the company, it's . . . sophisticated. [The
CEO] calls it diversity; I call it love your neighbor. But I think
it's
exactly the same thing. At its best you feel like you're not working
for a company but a cause. . . . We're working for this notion of
'non-hierarchical,' 'treat people right.' It's like working for a
much higher cause than 'create advertising,' 'make money.'
Cha and Edmondson chose Maverick because it’s values (a “no-frills,” “blue-collar” atmosphere
that supported diversity and a work/life balance) departed from the
norm of the advertising industry, and was thus a draw for talent.
During the first phase of their research, the company was five years
old and had 12 full-time employees, all of whom stated that they
high levels of work motivation and felt job satisfaction. Phase two
of the research, which occurred 3 years later, showed that Maverick
had grown to 31 employees, had begun to take on bigger and more high
profile jobs, and that more and more employees were becoming disillusioned
about their company’s values. Between these two phases, somehow,
an incongruence had emerged between the different sets of values:
Those described by the CEO of Maverick (the “sent” ones)
and the set as described by employees (the “expanded” ones).
Yet the evidence showed that neither of these two different value
sets had changed between phases 1 and 2 of the research. It was perception
that had changed. Employees felt that the CEO had betrayed them in
his efforts to make the company bigger. They perceived his actions
as “going for the money,” while the CEO felt that expanding
the company meant more opportunities for employees. Other factors,
including the CEO’s own health concerns and desire for an early
retirement, motivated his decisions, yet these were not being communicated
to employees.
To complicate matters, when three crucial employees
were given a bonus as a reward for their long-standing service
and dedication to the company, people became resentful. It didn’t
help that the three employees who received the bonus were white men,
causing employees to feel that the company’s commitment to
diversity was just lip-service. Topping this was the reality that
the drive to take on more projects and generate more money for
the company was cutting into the work/life balance of Maverick
employees.
The company that once urged people to leave at 6:00 pm every night
and did not want them to come in on weekends, was now asking them
to sacrifice their lives outside of work to fulfill the demands
of a growing work-load.
Cha and Edmondson demonstrate in their report, quite effectively,
how employee dissatisfaction started as a small tremor but then
grew into a bigger wave as employees connected these disparate
series
of events and changes to a bigger problem, finally reaching the
conclusion that the CEO was breaching the very values he had created
his company with. The CEO, meanwhile, was convinced that everything
he was doing was in alignment with the values he had sent out to
his employees
right from the very beginning. He felt that everything he was doing
was an authentic expression of these values.
As this study shows, nothing is ever simple. Cha and Edmondson
are continuing their research in this area, with hope that they
will
find more to offer in way of solutions, but they do hold some advice
for leaders when it comes to the complicated, and inevitable, reality
of value expansion.
(i) Explicitly acknowledge the tension among multiple
aims. Communicate
the reality that values can “bump up against one another.”
(ii) Clarify the values' appropriate meanings, but not
restrict their scope excessively. It is a human need to give shape and meaning
to
a value, as it applies to an individual’s own life.
(iii) Proactively "give sense" around actions that could
be seen as values-threatening. Leaders who take the time to carefully
explain the reasons behind negative decisions (which are often
invisible to employees) may be able to show employees the ways
in which they
are trying to sustain the values, while also managing business realities.
(iv) Create a sense of psychological safety. Employees
need to feel that it is safe for them to express their honest views
about leaders. Leaders can make this possible by seeking regular
feedback through
anonymous surveys or other forums.
Source: HBS Working Knowledge
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