The Placebo Effect of Corporate Values

By the time you finish reading this post 26,324 organizations globally will have published a new set of corporate values.

73, 212 executive team members will be congratulating themselves on a job well done.

45% of those same executives will be silently wondering how they are going to role-model these new values. Particularly as they’ve been told by their expensive consultants that’s a vital part of “embedding” the values with staff.

Meanwhile 7,245,614 employees of those companies will be wondering exactly how they should act, behave and make decisions differently in the days and months ahead based on these new, re-articulated, refreshed corporate values.

Ok, you got me – those numbers are entirely made up.

In all likelihood I’ve probably underestimated these numbers by a factor of 10 - but please don’t quote me.

The truth is the discussion around company values runs as hot today as it did in the 70’s and 80’s where it gained momentum in organizational behavioural theory.

Case in point - I recently shared a post on LinkedIn about values, citing research done by CultureX and quoted in The Economist, it received over 11K views, 120 Reactions, 40 comments and 12 Reposts.

Talk about touching a nerve.

Or the 3rd Rail.

Screengrab of the CultureX Report on Corporate Culture measuring 900 firms across 19 industries. Source: The Economist

Out of fascination – and some Saturday afternoon boredom – I fell into a ChatGPT rabbit warren asking for the probability that among the 1,000 employees of a fictitious organization with five (5) values, how many would align with all 5.

169

At the extreme high end.

If there were10,000 employees – 1,702

So, 17% aligned to all 5.

Which, even with my rudimentary math skills, means 83% who aren’t.

So then why does this concept have such tenacity and inexplicable loyalty across a legion of business leaders?

Why the agonizing obsession over wordsmithing each word while, amazingly and typically, we end up with a bland list of undifferentiated, unmotivating pablum like “respect” and “integrity”?

Could it be that “values” sound like a grand, virtuous and noble way to talk about our businesses and the people within them? An ego-fuelled Executive Leadership hallucination that has scant association with the reality of working at most organizations?

Could it be a desire to anthropomorphize (big word that means making something inanimate appear to have human attributes) our businesses with the same deftness that we brand our soda pop, chocolates and toilet bowl cleaners with attributes like happiness, joy and personal pride? If only our businesses had the same humanity when it came time to layoff staff.

Could be the forlorn dream of a homogenous, united and universally aligned set of employees rowing in unison toward growth and success? I credit my Kiwi mate Neil McGregor for this beautiful response on the LinkedIn post referenced earlier – “We keep pretending organisations can somehow have a set of values that apply to everyone equally. By definition that’s not the diversity everyone's been banging on about creating in organisations — that’s denial.”

Maybe it’s simply that values have some placebic effect on our leaders and, by hook or by crook, on the people we have the privilege of leading. And, like a real placebo, it may make you feel better, but it won’t cure you.

The Top 10 Corporate Values low the S&P 500 listed by frequency of use. Source ChatGPT4.

That, purely by existing – and been emblazoned on posters, T-shirts, all-staff meetings and email signatures – they will conveniently reduce the truly hard work of motivating and catalyzing the people inside our organizations.

An act of hygiene not an act of humanity.

So where should we be putting our time if its not poring over a thesaurus to find another word for “transparency” and “authenticity”

What Should Leaders Consider Investing in Instead?

How are our leaders genuinely leading?

This could be 25 other blogs. We ALL know that leadership and role modelling are foundational elements. Sadly, that accountability seems to be receding rather than growing. Some obvious areas. Are they leading by fear or by empowerment? Are they creating an environment where the skills and ability of their teams can flourish…or does their insecurity and need for control mean that psychological safety is totally absent.

Do we understand how emotions drive how our people behave?

If you truly want something that all your employees DO share…then think emotions. The emotions that energize them. The emotions that unsettle or hobble them. And then think further about when, where and why those emotions arise inside our companies.

Where and who connects our organizations…and where are they disconnected, disengaged and even lost?

If values are some magical corporate sinew or connective bond, have you really explored just how connected your firm is? What is it that actually connects your people? Who are those unseen and unsung heroes that actually do bind your people together? Do you have an appreciation or understanding of these 3% of people and the vital role of trusted sense-makers they serve?  

 And then my old, hoary chestnut that I drop religiously….

What are you celebrating, promoting and tolerating inside your firm?

Values are great (on posters) but your people are paying infinitely more attention to what gets celebrated, promoted and tolerated inside your company. Particularly if what you tolerate is the exact opposite of what you say on those amazing posters. Perhaps auditing what your organization tolerates would have a significantly higher ROI than 5 new values fresh from your ELT off-site.

So, what’s the ultimate prognosis on corporate values?

Pivotal or placebo?

Well may not a placebo but rather the multivitamin gummy of organizational culture.

Easily accessible, popular in the mainstream, available in multiple shapes, forms and flavours.

Ultimately, investing in values may be soothing for the conscience of Executive Teams but they rarely have the desired impact that a focus on behaviours, connections, emotions provides.

That’s where the real value is.  

 ** - there is a certain irony in have Krea create the masthead image for this blog post. AI struggles heroically to manifest real words. Sounds ominously like many Executive Teams.

Semantic map of the top Corporate Values cited by Fortune 500 Companies. Source ChatGPT