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Values-based Leadership

Good Leaders Model Underlying Core Values of the Organization

I recently read a book From Values to Action: The Four Principles of Values-Based Leadership by a professor at Northwestern University’s Kellogg School of Management. Having previously written about and taught the importance of values-based leadership in establishing an ethical corporate culture, I was interested to learn about Professor Harry M. Jansen Kraemer Jr.’s take on the issue.

He believes leadership must be rooted in who you are and what matters most to you. When you truly know yourself and what you stand for, it is much easier to know what to do in any situation. It always comes down to doing the right thing and doing the best you can.

True enough but the question then becomes how to you know your inner self and what drives you to make decisions? How do you know your decisions are the right ones to make? That’s the point. Values-based leadership starts with identifying the values that drive you to do what you do. Values and ethics overlap in the sense that values are underlying core beliefs that influence the decisions we make. The difference is the term ethics generally refers to a code of conduct that establishes rules for acceptable behavior. However, values are only ethical values when they deal with right and wrong behavior.

I may value having power, fame, and wealth but that doesn’t mean these are ethical values. They are underlying beliefs that drive me to succeed, perhaps at all costs, and achieve my goals. Now, if I act honestly, with integrity and trust, fair-mindedness, responsibility and accountability, then I can say that ethical values drive my actions. The goal of leadership in an organization is to get employees to buy into the values that are set by top management. Most important, good leaders must model values-based decision-making to enforce their importance to the organization.

I believe a good leader identifies and clarifies the values of the organization; explains how they should impact decision-making; holds employees to these values in carrying out their responsibilities; and rewards values-based decision-making. Why not include it in the performance evaluation system? It may take more time and effort than to simply say a manager receives a bonus based on divisional sales or profitability. But, isn’t it more important how those goals were achieved rather than that they were achieved?

A basic ethical tenet is that “the ends do not justify the means.” How we get to our goal is just as important as the goal itself. If we use and misuse people; if we treated them unfairly; if we pressure them into taking actions that are motivated by greed and not in the best interests of the stakeholders of the organization (i.e. investors, creditors, employees, suppliers and customers), then we are following values driven by the pursuit of self-interests, a form of decision-making known as egoism, and not one that respects the rights of others.

Core values don’t change like the wind blowing from east to west; north to south. Values are part of underlying ethical principles such as: (1) Treat employees, suppliers and customers with respect; (2) Be candid in all your dealings with stakeholders;  (3) Accept responsibility for your actions; (4) Be accountable for your decisions; and (5) Maintain your integrity in the face of countervailing forces.

Value based leadership is as much a management philosophy as it is an execution practice. As leaders, you want to encourage employees to buy into the underlying core values of your organization. The journey begins by identifying, explaining, and providing examples of values-based leadership.

Warren Bennis, who is widely regarded as a pioneer of the contemporary field of Leadership Studies, once said: “The most dangerous leadership myth is that leaders are born -- that there is a genetic factor to leadership. This myth asserts that people simply either have certain charismatic qualities or not. That's nonsense; in fact, the opposite is true. Leaders are made rather than born.”

I close with another quote from Warren Bennis: “Managers are people who do things right; leaders are people who do the right thing.”   

Blog posted by Steven Mintz, aka Ethics Sage, on March 30, 2012