Why values driven organizations improve your bottom line by Alan Williams and Sam Williams

By Guest Contributors Alan Williams and Sam Williams

Authors of The Values Economy, Alan and Sam Williams, explains what The Values Economy is and how it can make your organisation thrive and improve your bottom line,

 Ken Blanchard and Phil Hodges[i] estimate that fewer than 10% of organizations have clear, written values and many take the work on values no further than words. To create an impact, core values need to extend into the day-to-day fabric of the organization and be a reference for decisions and behaviours at all levels, influencing people daily.

Those in different places in an organization see evidence of culture and values differently. For example; those at the top, rate tangible KPIs (key performance indictors) as demonstrative of organizational culture (e.g. financial performance, competitive compensation); those lower down rate their personal experience as important evidence of ‘values’ (e.g. open communication, employee recognition, access to leaders).[ii] Both are forms of evidence.



Looking from the best case to the worst-case scenario, you can see for yourself the way you can harness core values for good or ignore core values at your peril. The research from Forrester[iii] reinforces what we have known for some time. The key factor common to companies that have delivered sustained high performance – at the top of their market for 100 years or more – is a base of values that is strong enough to provide the employees of the company with a common bond – a purpose beyond profit.[iv] A growing body of research shows that there is a strong link between financial performance and values-driven organizations. In 2001, Eric Flamholtz discovered a strong positive correlation between cultural agreement (a proxy for values or cultural alignment) and a company’s EBIT (earnings before interest and taxes).

He concludes: “Organizational culture does have an impact on financial performance. It provides additional evidence of the significant role of corporate culture not only in overall organizational effectiveness, but also in the so-called ‘bottom line.’”[v]

Other studies show that companies with strong adaptive cultures based on shared values outperform other companies by significant margins in the areas of sales, profit, employment and stock price growth, over the long term.[vi] The chair of the UK-government-sponsored Employee Engagement Task Force and non-executive director of the Ministry of Justice in the UK, David MacLeod, describing the power of living values, comments:

“All organizations have some values on the wall. What we found was that when those values were different from what colleagues and bosses do, that brings distrust. When they align, then it creates trust.”[vii]



How do you make sure that your stakeholders’ experience of your organizational values is explicit and aligned from the boardroom to the front line?

The tone is set by every employee, not just those at the highest level. Those at the top model what is important and are particularly visible in everything that they do – people take notice of how they behave. Yet, wherever you are, you have influence on those around you.

We need to turn the lens inwardly if the organization is going to behave in line with their core values. What are you doing? If you don’t behave as if the core values matter, then others won’t either. For values to be really cemented in the organization’s culture, everyone must be held accountable for living and demonstrating the values in their day-to-day decisions and actions. Embedding values is a challenge.[viii]

For organizations, identifying values is the first step but it is not enough. Well-written values without good execution can lead to disasters such as Enron[ix] or, more recently, Carillion.[x] Carillion’s explicit value statements of ‘We Care, We Achieve Together, We Deliver, We Improve’ masked the real and self-defeating culture at work. Many leadership surveys see corporate values as rhetoric rather than reality,[xi] with most employees unaware of their organization’s values.[xii]  And yet, most employees see the potential benefits of having a set of values in the first place,[xiii] especially if consequences of living and failing to live the core values are explicitly aligned.

 “In the wake of the banking crisis and other corporate scandals, now more than ever, organizational values should be at the forefront of business leaders’ minds” Peter Cheese[xiv]

The lived values of an organization have a huge impact on reputation and business outcomes. It’s also possible to delude yourself and your organization that you’re fine, all is well. The way powerful and intelligent people deliberately set aside crucial facts and turn a blind eye to fatal errors and frauds is explored in the book Wilful Blindness by Margaret Heffernan.[xv] But where actions cut across the beliefs and traditions expected by core communities of stakeholders, standards expected in the profession and the ethical standards and practice embedded in different legal systems, disaster can be a very real outcome for all involved.



It might appear obvious, but authenticity is the key. It has become fashionable for organizations to describe themselves as values-driven and yet, for the stakeholders (employees, customers, service partners, local communities, investors, members, citizens) of some, if not many, of these organizations, there is a disconnect between the aspirational words and the experienced reality. Values are now mainstream; it is no longer about a framed plaque on the wall. Values are the guiding compass and are most effective when they consciously inform every decision taken and how employees behave. In the Values Economy, the successful organizations will be those which create a sense of shared values with all stakeholder groups.

However, be aware that, while this approach sounds simple, and in many ways is just that,   sustained success requires sustained effort – and it is hard work. Leaders need to lead, not just with public endorsement butin practical terms on an ongoing basis. Strategic alignment with co-ordinated execution is key. Finally, to use a variation on the popular adage, practice makes more perfect: (effective) practice results in improvement and, at the same time, there is always room for further improvement.


“In theory there is no difference between practice and theory. In practice, there is.” Yogi Berra[xvi]


[i] Ken Blanchard and Phil Hodges (2003). The Servant Leader.Tennessee: Thomas Nelson Inc.
[ii]Deloitte. Core Beliefs and Culture: Chairmans Survey Findings http://www.deloitte.com/view/en_US/us/About/Leadership/1fe8be4ad25e7310VgnVCM1000001956f00aRCRD.htm (accessed July 28th 2013)
[iii] Anjali Lai, “The Values-Based Consumer” (Forbes), last modified 22 March 2017, https://www.forbes.com/
[iv] James C. Collins and Jerry I. Porras, Built to Last: Successful Habits of Visionary Companies (New York: Harper
Collins 1994).
[v] Eric Flamholtz, “Corporate Culture and the Bottom Line,” European Management Journal 19 (2001): 268-275.
[vi] See John P. Kotter and James L. Heskett, Corporate Culture and Performance (New York: Free Press, 1992);
James C. Collins and Jerry I. Porras, Built to Last: Successful Habits of Visionary Companies (New York:
HarperCollins, 1994); and Rajendra S. Sisodia, David B. Wolfe and Jagdish N. Seth, Firms of Endearment: The
Pursuit of Purpose and Profit (Upper Saddle River: Wharton School Press, 2007).
[vii] Quoted in Laura Chamberlain, “Four Key Enablers to Employee Engagement” (Personnel Today), last modified 27 January 2012, https://www.personneltoday.com/hr/four-key-enablers-to-employee-engagement.
[viii] CIPD (2012). Employee Outlook. CIPD http://www.cipd.co.uk/binaries/6030%20EmpOutlook%20Autumn%202012%20WEB.pdf  (accessed July 28th 2013).
[ix] Enron scandal at-a-glance, reported by the BBC, 22nd August, 2002. http://news.bbc.co.uk/1/hi/business/1780075.stm (accessed 1st August 2013)
[x] https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8206 accessed 4 March 2019
[xi]Ken Blanchard, Michael O’Connor, Michael J O’Connor Ph.D., Jim Ballard (1997) Managing by Values. San Francisco: Berrett-Koehler Publishers..
[xii]CIPD (2012). Employee Outlook. CIPD http://www.cipd.co.uk/binaries/6030%20EmpOutlook%20Autumn%202012%20WEB.pdf  (accessed July 28th 2013).
[xiii] CIPD (2012). Employee Outlook. CIPD http://www.cipd.co.uk/binaries/6030%20EmpOutlook%20Autumn%202012%20WEB.pdf  (accessed July 28th 2013).
[xiv] Peter Cheese, CEO of the Chartered Institute for Personnel and Development (CIPD) in the UK. In CIPD (2012). Employee Outlook. CIPD http://www.cipd.co.uk/binaries/6030%20EmpOutlook%20Autumn%202012%20WEB.pdf  (accessed July 28th 2013).
24 Margaret Heffernan (2011). Wilful Blindness: Why we ignore the obvious at our peril. London: Simon & Schuster
[xvi] Lawrence Peter “Yogi” Berra (May 12, 1925 – September 22, 2015) was an American professional baseball catcher, who later took on the roles of manager and coach.


ALAN WILLIAMS coaches progressive leaders of service sector organizations, internationally and in the UK, to deliver values-driven service for sustained performance. He is a published author and speaker whose projects have delivered measurable business results across a balanced scorecard and been recognized with industry awards.

LinkedIn: https://www.linkedin.com/in/alanservicebrandglobal


SAM WILLIAMS works across the change management life cycle to deliver people-and technology-led business change. He is passionate about identifying the need for change, mapping out the path to benefit realization, and helping organizations to move from the outlined as-is state to an improved and more mature to-be state that improves efficiency and quality. His empathetic nature and strong social skills enable him to engage with a wide range of stakeholders to understand the unique nuances within organizations that influence their readiness for or resistance to change.

LinkedIn https://www.linkedin.com/in/sam-williams-944bb6146

Suggested Reading

The exponential rate of change and disruption in the world mean that the traditional organization-structure led approach is no longer fit for purpose. In this book, The Values Economy, the authors explain how the three primary influencers of Choice, Communication and Control have created a new paradigm that they refer to as the ‘Values Economy’. Leaders of organizations can survive and thrive in this brave new world by implementing a tried and tested, detailed methodology which can be applied in any setting.

The core principle is alignment, with a specific focus on the areas of brand identity, employee engagement and customer experience. This helps to establish a sense of shared values with all stakeholders and equips the organization with the agility needed to deliver sustained performance in a dynamic business environment where disruption is the new normal. The authors’ combined Baby Boomer and Gen Z perspective provides a compelling, irresistible blend of sharp insight, operational know how and pragmatic hopefulness, bringing the theory to life with a range of case studies from different sectors, sizes and stages of maturity.

More information