Much has been written about the downfall of the financial markets and many of the leading institutions who are paying the price for over extending on high-risk portfolios.
Even those who have survived relatively unscathed, and those who remain propped up by government support, must ask themselves how they plan to deal with the next 12-18 months.
It seems to me that there are two fundamental learning lessons from these recent times that we need to revisit as part of rebuilding the greater organization culture:
1) Revisiting what we mean by organization values
This requires an urgent and hard look at what this means in relation to core values such as honesty, transparency, respect, responsibility, duty of care, balancing risk and return, and what are the non-negotiable points and measures.
Organization values need to be more than empty words on paper.
Values must be lived. They need to move from ticking the box of “we have organization values” and instead move to be seen and be protected as “organization valuables”.
You know your values are living when:
they are discussed regularly in meetings not as a separate topic, but within every topic
senior management are being measured and called out if they are not acting in harmony with the values (employees and managers are encouraged to ask and call this out), and
when every decision is understood and explained in relation to how it represents the business values.
A good measure would be if every employee understands the decisions being made in relation to where it sits within the balance of investor returns against customer, community and employee responsibilities.
Values need to be shared and explored in every stage of recruitment, decision making, promotions, and in explaining any changes the organization is making.
The other lesson needs to be around industry regulation:
2) Industry regulation needs to be overhauled
We need to change our model from having those who regulate the industry who previously have mostly been made up of those within the industry, to those representing the greater business, customer, government and investor community. We need to move from a secular-type model to a representative-democracy of the greater stakeholders.
It is too easy to corrupt decision making when the regulators are also those who are likely to be influenced by the decisions, either positively or negatively.
Whilst representatives from all groups are required to provide a good forum of interested parties, it needs to be strongly balanced out by those who represent the greater beneficiaries and of those likely to suffer the on-consequences of any decision.
With increasing pressures on short term results, the pull will be significant to overlook both these aspects in the immediate. If values can be made omnipresent, not only will it be representative of strong organizational character but become a valuable platform of strong characters (employees) to leverage from.
The challenge for all organization leaders will be how to balance long term progress against short term and to never be tempted to accept or deliver anything if it comes at the expense of organization values or the greater stakeholders.
Emma Lo Russo
Published: April 13, 2009