ARTICLE

Values-Based Leadership:
Leading from the Inside Out

By Richard Barrett

Becoming a successful leader—someone who is able to build a long-lasting, high-performing team, organization or community—is not about what you do, although that is important, it is about how you do what you do—it is about living your deeply held values.

 Sustainable advantage and enduring success—both for companies and people who work for them—now lie in the realm of how, the new frontier of conduct.

 What my research and the research of others shows that values-driven teams, organizations, and communities are the most successful on the planet. Values-driven organizations generate higher earnings; they are more customer-focused and more productive, and they have higher levels of employee engagement, higher retention rates, and lower absenteeism. Because employees feel cared for, they willingly bring their creativity and discretionary energy to their work.

 Values-driven organizations also generate more customer loyalty and more societal goodwill. The reason they do this is that they strive to meet the needs of all their stakeholders. This, in turn, generates high levels of trust. Trust is the glue that bonds people together and the lubricant that allows energy and passion to flow. Trust builds internal cohesion.

“Trust always affects outcomes—speed and cost. When trust goes up, speed will also go up, and costs will go down. When trust goes down, speed will also go down, and costs go up.”

— Stephen Covey

Trust is an end value; in order to trust and be trusted other values have to be in place.

THE TRUST MATRIX

On the left-hand side of the matrix are the values you need to live by to engender trust.  On the right-hand side are the competencies that have to be acquired to engender trust.

 Character is a reflection of how you are on the inside, your intent, and the level of integrity you display in your relationship to others. These depend primarily on the level of development of your emotional intelligence and social intelligence. The intent is demonstrated by caring, transparency, and openness; integrity is demonstrated by honesty, fairness, and authenticity. Whilst all these values are important, authenticity is perhaps the most important value for building trust.

 The authentic leader pursues purpose with passion, practices solid values, leads with heart, establishes enduring relationships, and demonstrates self-discipline. The authentic leader brings people together around a shared purpose and empowers them to step up and lead authentically in order to create value for all stakeholders.

 Competence is a reflection of how you are on the outside, your capabilities, and the results you achieve in your role. These depend primarily on the level of development of your mental intelligence, your education, and what you have learned during your professional career. Capability is demonstrated by skills, knowledge, and experience. Results are demonstrated by reputation, credibility, and performance.

 Even though the focus on competence (capability and results) is important, these are skills that can be learned and accumulate over time. I believe the focus on character (intent and integrity) is more important because these qualities are required for creating internal cohesion and are much more difficult to develop. Competence is about achieving results; character is about how you achieve them.

HOW DO YOU CREATE A HIGH-PERFORMANCE CULTURE?

Everyone agrees that the culture of an organization determines its success. Who you are and what you stand for have become just as important as the quality of the products and services you sell: But where does culture come from? 

Simply put, the culture of an organization is a reflection of the values and beliefs of the leaders. Who you are as a leader, determines the corporate culture. Therefore, if you want to change the culture, either you must change or you must change the leader. Cultural transformation begins with the personal transformation of the leaders: Organisations don’t transform, people do. The first step in creating a high-performance culture is to measure the culture you have created. Most cultures are created unconsciously. When you are able to measure your culture, you can consciously create the culture you want.

HOW DO YOU MEASURE CULTURE

It used to be that culture was considered an intangible, and therefore not susceptible to measurement. This is no longer true. You can easily and effectively measure your culture by using Barrett Analytics. These assessments are based on the Barrett Model, a proven and extraordinarily useful map for understanding the values of your employees, leaders, and stakeholders. Furthermore, it offers a means for creating more trusting and productive relationships between them, and a deeper alignment of purpose across your organization.

LEVEL

ACTION AND NEEDS

DEVELOPMENTAL TASK

7 – CONTRIBUTION

Creating a long-term sustainable future for the organization by caring for humanity and preserving the planet.

Serving: Safeguarding the well-being of the planet and society for future generations.

6 – COLLABORATION

Building the resilience of the organization by cooperating with other organizations and the local communities.

Cooperating: Partnering with other like-minded organizations and communities for mutual benefit and support.

5 – ALIGNMENT

Enhancing the capacity of the organization for collective action by aligning employee motivations around a shared set of values and an inspiring vision.

Bonding: Creating an internally cohesive, high-trust culture that enables the organization to fulfill its purpose.

4 – EVOLUTION

Increasing innovation by giving employees a voice in decision making and making them accountable for their futures and the overall success of the organization

Empowering: Enabling employees to participate in decision-making by giving them freedom and autonomy.

3 – PERFORMANCE

Establishing structures, policies, procedures, and processes that create order, support the performance of the organization, and enhance employee pride.

Achieving: Building high-performance systems and processes that focus on the efficient running of the organization.

2 -RELATIONSHIPS

Resolving conflicts and building harmonious relationships that create a sense of loyalty among employees and a strong connection to customers.

Harmonizing: Creating a sense of belonging and mutual respect among employees and caring for customers.

1 – VIABILITY

Creating financial stability, profitability, and caring for the health and safety of all employees.

Surviving: Becoming financially viable and independent.

CASE STUDY

The following Table and Figures show what happened when a 27,000-person company in South Africa consistently used Barrett Analytics to measure their culture for seven years. Each year, based on the results of the values assessment, the leaders made changes that aligned with the type of culture that employees wanted. The following table shows the key performance indicators during this period (income, number of staff, revenue per capita, and Cultural Entropy®).

YEAR

INCOME (ZAR MILLIONS)

NUMBER OF STAFF

REVENUE/CAPITA (ZAR THOUSANDS)

CULTURAL ENTROPY®

Year 1

15,809

22,188

713

25%

Year 2

18,948

24,034

788

19%

Year 3

22,428

26,522

846

17%

Year 4

22,077

27,570

801

14%

Year 5

21,570

27,037

798

13%

Year 6

23,635

27,525

859

13%

Year 7

28,115

28,494

987

12%

Since this company started mapping their values,  the level of Cultural Entropy decreased from 25% to 12%.  At the same time, revenue per capita increased from 713,000 ZAR to 987,000 ZAR—a 38% increase.

The graphs below show the changes in revenue per capita (productivity) and the level of the Cultural Entropy score: As the level of the Cultural Entropy score decreased, the productivity of employees increased. The level of employee engagement also increased.

Employee Productivity (Revenue per Capita)

 

Degree of Cultural Entropy®

CONCLUSION

The culture of an organization is a reflection of the values and beliefs of the leaders. As the leader’s values change, the culture changes. If you want to change your culture, you must begin by measuring the employee’s perception of the current culture and their desired culture. This allows the leadership group to find out what is working and what is not working and take action to introduce changes that align with employees’ desired cultural values. As you do this, year by year you will find the level of values alignment increasing, the level of the Cultural Entropy score decreasing, and the level of employee engagement increasing.

READY FOR YOUR ORGANIZATION TO THRIVE?