Having a clear organizational vision and a set of values benefits the organi-zation in the same way as it does for individuals. The organiorgani-zational vision and values are the SQ of the organization.
Intuit, based in California, is the market leader in personal finance soft-ware and its employee turnover rate is 13 per cent, half the Silicon Valley average. It attributes a substantial part of its success to its employees’ belief
in its vision and values. The employees put the vision and values into prac-tice because they were personally involved in defining them. Intuit’s values centre around ‘Doing right by all our customers’, by which they mean all customers, external, internal, business partners and shareholders.
An example of how Intuit’s behaviours were driven by their values was highlighted in February 1995, when Scott Cook, the founder of the company, found out from the San Francisco Chronicle that a bug had been found in Intuit’s TurboTax software programme. When he read this Cook was about to board an aircraft to Los Angeles but trusted his executive team to deal with the issue. True to their belief in ‘Doing right by all our customers’, the Intuit team took the following action within a 24-hour period. They offered to send a new copy of TurboTax to any customer who wanted it – even those who were not registered users and had only ever
‘borrowed’ a copy! They offered to pay any IRS penalties incurred by customers as a result of the bug.
Mike Newnham, Vice President of Business Solutions at telecommunica-tions company Orange, explains the importance of an engaging corporate vision: ‘communicating your vision is critical, whether you are leading a small entrepreneurial company or a large corporate.’ An organizational vision should clearly state what the organization seeks to create in the future. It shows where the organization wants to go and what it will be like when it gets there. It should be aspirational and inspirational. The best visions are short and easy to understand. They engage people at all levels in the organization – employees, customers and other stakeholders.
Which of the following examples of organizational visions do you find memorable and inspirational?:
• healthcare organization: ‘Taking care of the life in our hands’;
• upmarket hotel chain: ‘Discovery’;
• entertainment group: ‘Dream, Believe, Dare, Do’;
• financial services organization: ‘To be the first choice for customers and colleagues’;
• card manufacturer and retailer: ‘To enrich people’s lives, help them express their feelings, celebrate occasions and enhance their relation-ships’;
• logistics company: ‘People, Customers, Profits’.
A vision allows people a focal point during change and gives some explana-tion as to why the changes are happening and how the change is a means of helping the organization achieve its future state. Values are the guiding principles of the organization. If values are embedded in the organization, they allow all other systems, processes and behaviours to fit together in the organization. An illustration of this is the people management process.
If you have a clear set of values, it can help inform your competencies, which in turn will inform the five key components of people development in organizations:
• recruitment and selection;
• performance management and coaching;
• succession planning and talent management;
• training and development;
• reward and recognition.
One organization with whom we worked had a vision of ‘inspiring customers’. Its values were customer service, team work, integrity and learning. It developed a competency framework that embedded these four values into the desired skills and behaviours for all levels of employees. The values and competencies in turn contributed to the recruitment and selec-tion process. They were the criteria against which performance was managed, promotion decisions were made and development offered. The values were also reinforced through a recognition scheme that gave credit to people who had delivered inspirational service.
Aligning reward to an emerging culture is important. When a change programme was initiated at Defence Aviation Repair Agency, Dara, once part of the MOD, change agents identified that the culture was hierarchical and risk-averse. It was clear that such a culture would not survive in a commercial environment. A new reward system, based on broad banding with an upfront pay rise in return for commitment to accepting the new culture replaced the inflexible pay and grading structure that Dara had inherited from the MOD. This helped to encourage change while still retaining employee’s pride in the quality of their work and the importance they placed on the customer. (Source: an article entitled ‘Creative Fusion’
by Rosie Blau, published in People Management on 7 November 2002).
Having established values and aligned processes will make change more Creating organizational vision and values and bringing them to life
RECRUITMENT PERFORMANCE SUCCESSION TRAINING REWARD &
& SELECTION MANAGEMENT PLANNING & & DEVELOPMENT RECOGNITION
& COACHING TALENT MANAGEMENT
COMPETENCIES VALUES
VISION
Figure 12.1 Vision, values and people management
manageable and effective as the foundations of the organization are steady as things above it move.
Claridge’s hotel in London has undergone a transformation over the past five years. In 1998 staff turnover was 73 per cent, complaints were running high and there was one rule for managers and another for staff. Consulting staff was a radical departure from the ‘command and control’ style of leader-ship that had gone before. Employees created a vision of the future: ‘To be the first choice for guests and employees by 2005’ and a mission: ‘To bring 100 years of tradition into the 21st century.’ The issuing of written communi-cation was banned and daily staff meetings now take place. A programme to show appreciation to staff was developed that included improving the working environment for employees as well as developing a reward and recognition scheme. This recognizes people who have gone above and beyond the call of duty for guests. They each receive a prize from a lucky dip. Prizes include a chauffeur driven car journey to work, and a night in the penthouse – which would cost a guest £3,850. In addition, at the end of the three-month probationary period each new employee is invited to stay at Claridge’s. By valuing employees and adopting a more open leadership style, complaints have fallen dramatically, staff turnover has dropped to 16 per cent and room occupancy has increased by 15 per cent.