Just Words or Something More?
“I think values are really, really important, but I also think that too many values are just words.” — Lou Gerstner, former CEO for IBM
Gerstner’s thoughts in McKinsey Quarterly stuck a nerve when I stumbled onto them the other day. We all operate from our values, but articulating them – getting them out on paper to share and really think about them – seems like a helpful exercise… a good lens to focus behavior.
But it’s hard to discount what Lou says next.
“I think values are really, really important, but I also think that too many values are just words. When I teach at the IBM School, I use the annual reports of about ten major companies that invariably announce, on the back page or inside back page, “These are our values.” What’s striking to me is that almost all the values are the same. “We focus on our customers; we value teamwork; we respect the dignity of our workforce.”
But when you go inside those companies, you often see that the words don’t translate into practices. When I arrived at IBM, one of my first questions was, “Do we have teamwork?,” because the new strategy crucially depended on our ability to provide an integrated approach to our customers. “Oh, yes, Lou, we have teamwork,” I was told. “Look at those banners up there. Mr. Watson put them up in 1938; they’re still there. Teamwork!” “Oh, good,” I responded. “How do we pay people?” “Oh, we pay on individual performance.” The rewards system is a powerful driver of behavior and therefore culture. Teamwork is hard to cultivate in a world where employees are paid solely on their individual performance.