The danger of a single-minded organisational vision

Pursuit of one mission above people and customer satisfaction can be catastrophic for businesses, argues Cliff Ettridge

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In the early 2000s, BP had four company values, but few people in the business talked about any of them apart from one: growth. Why? Because then CEO, Tony Hayward, had articulated a clear, single-minded vision to be the biggest oil company in the world, and it had become a mantra. In 2010, BP achieved Hayward’s vision. One week later came the Deepwater Horizon oil spill on the BP-operated Macondo Prospect in the Gulf of Mexico.

The company has learned lessons and gone under a huge internal overhaul since the disaster, but it is not the only one to have fallen victim to the single-minded vision mistake. Under Sir Fred Goodwin, RBS set its sights on becoming "the world's biggest bank", achieving that vision just before the 2008 financial crash.

Having a vision is where you want to be, but pursuit of that vision above all else is dangerous. It means other important functions of a business – care for employees and customers, safety, among others – fall by the wayside.  

It has also become increasingly clear in the past 10 years or so that people – employees and customers – want businesses to be driven by a purpose. Something that shows how it adds value to the world, rather than just growing its size, providing the lowest price point or making a fast buck, no matter what. 

It has been proven that customers that feel a brand is making a difference will be more likely to stay loyal to that brand. The same is true for employees, who we know want to work for organisations that are making a meaningful difference.

Living that purpose is where organisations come unstuck: it’s more than words. Will purpose change how business is done or is it simply for the investor report? That’s why businesses need a set of values to drive the decision-making in the business, not one singular vision to be the biggest or best or one purpose, no matter how important that might be. 

Look at Lehman Brothers, whose code of ethics stated that integrity and ethical behaviour were important to the bank because of the trust that clients placed in them. And yet excessive risk taking, fraud and unethical management practice led to bankruptcy at the height of the 2008 financial crisis. Clearly the values ‘words’ were there, but the behaviour was not.

‘Values’ have had a poor time since the rise of purpose, and yet 60 per cent of employees we surveyed say that ultimately values are a far more important guide for them than purpose. That’s because they help them with everyday immediate decision making.

After the Deepwater disaster, BP had to take a long, hard look at itself and ask what went wrong. The disaster didn’t happen because the people who worked at BP were inherently bad, but because of a culture that had emerged in parts of BP in pursuit of that single vision. In the wake of disaster, those values that had been overlooked had to be revisited. Commitment towards safe and reliable operations had not been given enough focus, for example, which is why Safety – with a capital ‘S’ – had to become a core value if the business was to save itself. 

As a result, five values were launched inside the organisation; based on safety, excellence, respect, courage and being one team. Rather than just a set of values ‘words’, they were supported by a set of behaviours that guided employees to live those values. These values have enabled BP to rebuild relationships. Ultimately, those needed to build trust, so that customers, communities, shareholders and employees know that this is a company they can do business with again. 

Finding the right set of values

It was a similar situation with RBS, the pursuit of becoming the world’s biggest bank was successful, but ultimately the cost of not having a set of values acting as checks and balances was the taxpayer bailing out the bank. 

Subsequently, values needed to be put in place and they needed to be the right ones. Just as BP’s had to be about safety, the resetting for RBS had to be about customers and thinking long-term. The eventual campaign was “Think outside the Bank”, because too much thinking had been done by looking inside the bank, at its balance sheet and how much money it was making. 

Ask yourself: why does your business exist? What significance does it bring to the world? And how will you achieve that end state? That’s where you begin. 

It’s not a glitzy or glamorous process, it’s many, many conversations. When a company launches its values, they should be the worst kept secret in town. People should already be nodding along because you’ve brought them along throughout the process. If you haven’t had enough of those conversations, you’re not ready to launch. 

It's also important not to try and have too many central values. If the list gets too long, then people will only remember a few, and they may not be the most pressing. 

More than just words 

It’s not just setting those values but ensuring they are entrenched throughout the business. Bear Stearns is another bank that collapsed in the 2008 financial crash. It also parroted ethics and integrity, but all that was forgotten when it found success investing in subprime mortgage products. 

It shows that success can be a time of vulnerability, because that’s when business leaders need to stop and ask themselves “are our decisions and behaviours still adhering to our values?” Success is no longer just what you’ve done, but also how you did it. 

At RBS (now NatWest Group), this meant creating the “yes check”: a decision-making process that incorporated five questions based on the new values. Can you answer yes to these five questions? Then you know you’re making the right decision. Ensuring that your values and behaviours are ingrained in every decision that you make is the number one priority. NatWest has been one of the biggest turnarounds in corporate history, and that’s down to the cultural change inside the business – the actions and decisions made with customers in mind.

Employees need to see the values in action, tell them stories about how decisions have been made. Show them conundrums people have faced, what they did in response and the impact it had. Keep making those values tangible, if you don’t, your own disasters won’t be far off.

Cliff Ettridge is director at The Team