Valuing Values Drives Results
A few weeks ago I had the pleasure of hearing Rachel Ligtenberg, VP of retail for REI, speak about REI’s focus on creating an equitable playing field for women outdoors. She spoke with great pride about her company’s commitment to women as an extension of its overall purpose-based business model. REI had record revenue results last year and has spent 20 years on Fortune’s 100 best companies to work for list, neither small feats.
Companies using their power and presence for a higher good is becoming more popular with employees and shareholders alike, and the financial performance those companies deliver shows that valuing values drives great results. Customers are increasingly purpose-oriented and socially-minded in their spending, as are employees in where they choose to work, how long they stay, and what they say in social media. Google employees made a huge statement last week when they staged a multi-national walk-out to protest how the company handles sexual harassment - and they got forced arbitration practices to end as a result. On the proactive side, Salesforce’s choice to do an annual pay parity review and recalibration drives huge employee engagement, leading to lower turnover and higher profits.
So why do some companies still value results at any cost? That gets to the heart of institutionalized bad practices where leadership turns a blind eye to moderate to blatant inappropriate behavior - favoritism, discrimination or worse - and feels justified because the bad player(s) deliver great results. The problem with this view is it is taken with blinders on. There is a huge ripple effect in the cost to the company, and it comes out in turnover, lack of advancement for other great people, and inability to recruit/hire outside talent, all of which hold back the company’s top and bottom line performance.
The good news is the word gets out on these cultures, officially or unofficially, and with the power of activist employees, investors and shareholders, more and more of the bad players are being exposed. Change is hard, but the fallout from exposure is much more damaging. It all comes back to the commitment of leadership, not just publicly but privately, in the hard day to day decisions in the choices they make about who to hire, promote, partner with and the standards they set across all those interactions. It comes from personal behavior as well - from really walking the talk.