In February 2005, while I was attending my monthly CEO group meeting at the CEO Institute, one of the CEOs said something that prompted me to write down this statement…
I want to be a Values-Driven Company that achieves results; not a Results-Driven Company that has values. — That statement shook me, and it was exactly what I was looking for.
What I have now learned is that every company has values, even if they haven’t been discovered yet. I have also found that most companies are RESULTS-Driven and not VALUES-Driven.
In an earlier blog post, we introduced the important question, “Who are you?” But, even after I jotted down the above statement, I still did not know “Who I was.”
Every leader should discover “who they are” because of the tremendous results achieved by values-driven companies.
Not long after that February 2005 meeting, our leadership team wanted to do a book review on the book, Built to Last, by Jim Collins and Jerry Porras.
In the book, Collins & Porras really opened my eyes to understand that Core Values were driven by the leader of the organization or the leader of a department within an organization.
Three types of companies
The authors looked at some of the United States’ most successful corporations, many dating back to the 1800’s.
Using decades of data and an exacting criteria for evaluation, Collins and Porras compared three distinct groups of organizations:
- Visionary companies – these companies are the best of the best, described as “premier institutions in their industries, widely admired by their peers and having a long track record of making a significant impact on the world around them.”
- Comparison companies – close competitors to the visionary companies who have achieved a high level of success, but not to the extent of the visionary companies.
- Average companies – as represented by the average performance of those companies in the general stock market.
What is amazing was the extraordinary long-term financial performance of these enduring, great visionary companies.
Collins and Porras contrasted the three types of companies by showing what $1 invested on Jan 1, 1926 would grow to by December 31, 1990. Here’s what they found:
From 1926 to 1990, your investment in the good, “comparison”, companies would have earned two times more than the general stock market – which is pretty good.
But your investment in the enduring, great visionary companies would have been 15 times greater than the general stock market.
WOW!!! So what made these enduring, great visionary companies different?
Preserve the Core and Stimulate Progress
Collins and Porras discovered that the enduring, great visionary companies did a couple of things very well. The authors summed it up by stating that visionary companies Preserved the Core and Stimulated Progress.
To Preserve the Core and Stimulate Progress meant the organization’s Core Ideology was always fanatically protected and never changed while they “stimulated progress” by endlessly adapting their business and operating practices.
Over time, these visionary companies changed almost everything, like: policies, procedures, product lines, competencies, organization structure, reward systems, strategies, tactics, and performance goals.
But the one thing that they did not change was their Core Ideology. Collins and Porras define “Core Ideology” as core values + purpose.
While I studied this book and thought about my own company, I started to realize that my search for our beliefs, or core values, was a key part of achieving significant and sustainable growth.
As the leader, I learned that it was important for me to identify and champion our own core values.
The statement that I jotted down in the meeting provided a glimpse into my deeper core values, but I still had a lot to learn!
How about you? Are you a RESULTS-Driven company that has values or VALUES-Driven company that achieves results? Would you like to be a VALUES-Driven company? If so, stay tuned!