Company ValuesAND THEIR ROLE IN BUSINESS PERFORMANCE

SCOTT RUDI

PRINCIPAL, TURNUP, LLC

Intro - Scott Rudi, MS, SPHR, SC-P Previously with Shell Oil, Frito-Lay/PepsiCo, Wells

Fargo, Mellon Financial

Enthusiastic support for aligning cultures and fulfilling company missionsCommunication StrategiesDefining Organizational PurposeMatching Business & People through organizational

health

Values & Business Review the case for values and culture Discuss example value models Determine the connection between values and

business performance Integrating values and culture

The Order of ThingsVision

MissionStrategy

StructurePeople

Values are the glue

Strategy seems pretty important

Until you recognize

“Culture Eats Strategy for Lunch”

~ Peter Drucker

Cultural Buzzword of the last 3 years

ENGAGEMENT

Why? Retention Ownership / Motivation Focus Results

Culture / Values determine Level of Engagement

“We didn’t have formal core values”

(early on) “because it was something I’d always thought of as a very corporate thing to do”

Tony HsiehCEO, Zappos.com, Inc.

“But, it was the very thing we needed to do to scale and grow”

Study found*Values and the S&P 500

Innovation (80%) Integrity (70%) Respect (70%) Quality (60%) Teamwork (50%)

* The Value of Corporate Culture; Guiso, Sapienza, & Zingales (2013)

Core Values Example Deliver WOW through service Embrace and drive change Create fun and a little weirdness Be adventurous, creative and open-minded Pursue growth and learning Build open and honest relationships with communication Build a positive team and family spirit Do more with less Be passionate and determined Be humble

Zappos

Another Example We want to work with great people Technology innovation is our lifeblood Working here is fun Be actively involved Don’t take success for granted Do the right thing, don’t be evil Earn customer and user loyalty and respect every day Sustainable long-term growth and profitability are key to our success We care about and support the communities where we work and live We aspire to improve and change the world

Google

- The Value of Having Values - Intersect the business?

Is there a correlation to performance of companies with a set of “advertised” values? *Study found

Tobins q – a measure of company value was negatively correlated

.02 correlation found with performance (net income) Only customer satisfaction was positively correlated

Conclusion: Values on paper yields little value* The Value of Corporate Culture; Guiso, Sapienza, & Zingales (2013)

The Value of Living ValuesIntersect the Business?

Two questions from the Great Places to Work Index Highest Scores were correlated to business results

Performance factors affected and shown to improve at a 99% confidence interval Tobin’s q Profitability Reduction in represented workforce

Conclusion – Living Values Yields Value

*Study correlations from Great Place to Work Survey (referenced in Value of Corporate Culture)

Stopping a “Paper on the Wall” values culture

Reinforced & threaded into the fabric of company practiceBut How? Hire based on the values Assimilate all to the values Teach and correct according to the values Cite values throughout company communications Reward based on the values Align performance management to values Leader model the values ..

So it is said….“Your beliefs become your thoughts,

Your thoughts become your words,

Your words become your actions,

Your actions become your habits,

Your habits become your values,

Your values become your destiny.”

― Mahatma Gandhi

Thoughts?

Questions or Assistance

Scott Rudi

scott@turnupllc.com

319.325.1025