How great leaders use values to drive performance

Taking call on values
However taking calls on matters related to the values -whether that means stopping shipments of goods of suspect quality, letting a successful sales person go because he over-promised or refused to collaborate on prospects handled by others, or not allowing accountants to suppress facts in financial statements, etc. -is the toughest leadership challenge. Leaders do not exist in vacuum; they have to manage and 'run the show' too.

Many managers would prefer to be pragmatic and make short term trade-offs. Their bosses would often not disagree. Then there are some who argue that performance is all that matters. They say that extra-ordinarily talented people at times transgress the boundaries of acceptable behavior, but such people also make a huge difference to the results. CEOs would not hesitate in acting on issues like fraud or dishonesty but on other issues like the above and when very talented people are involved many of them may be tempted to take decisions for short term gains. There is not enough awareness of the downstream effects when values are compromised.

Downstream effects when values are compromised
Such compromises damage the working environment in many ways. They send wrong signals. Other employees may be tempted to reach similar compromises to boost their performance figures. Compromises on values can demoralize talented and conscientious people, who are the backbone of any organization. They can damage team spirit. Compromises like these, lead to suppression of other problem signals and create severe handicaps for the top leaders, since no body will talk openly about them. The performance gains that accrue by compromising on values do not last for long and very soon the above effects start weighing down the organizations.

Values raise performance
Great leaders know how to master paradoxes of values and short term vs long term effects. They make sure that organizational values are correctly understood by everyone, including outside people -e.g. vendors. They achieve this common understanding by defining acceptable and unacceptable behaviors, discussing situations in an open manner, and acting on them. They keep their egos and biases firmly out of the decision making processes that deal with application of organizational values. When implemented properly, values reduce need for close supervision, engender trust and co-operation with suppliers and customers, and raise performance.

Great leaders go one step further -they also define work or process specific values. For example, product creation work needs sensitivity to pick customer signals and sensitivity to people with diverse expertise. These personal traits or values have a huge impact on the success of product creation processes. For example, the sensitivity to pick up customer signals helps in capturing some critical aspects early in the product creation cycle and saves time and effort for design changes.

Great leaders sense this and they select up people with critical-for-work values. They coach their people on these aspects. When it comes to taking decisions on people they give very high weight to values. When abilities and values are both used while making people decisions, the performance gains are large and sustainable.