Organizational Values and Leadership: Learn More about the Importance of Aligning Core and Operational Values in the Strategic Planning Process and the Bottom-Line Benefits of Investing in a Performance-Oriented Organizational Culture

By Tannenbaum, Mark A. | The Public Manager, Summer 2003 | Go to article overview

Organizational Values and Leadership: Learn More about the Importance of Aligning Core and Operational Values in the Strategic Planning Process and the Bottom-Line Benefits of Investing in a Performance-Oriented Organizational Culture


Tannenbaum, Mark A., The Public Manager


We live in a time when more than ever our values, our core beliefs, are being challenged and questioned. Our governmental, economic, philanthropic, and religious institutions are facing harsh and often justified scrutiny for fraudulent and abusive behaviors resulting in tremendous psychological and financial losses for thousands of innocent people. As leaders try to chart the direction for their organizations, they cannot help but face these underlying concerns about their enterprise.

Unfortunately, organization leaders too often plunge into a long-term strategic planning process without first deliberating on certain fundamental questions related to organizational beliefs and values. These questions include:

* Who are we (core ideology)?

* Why do we exist (core purpose)?

* What do we believe in (core values)?

* What inspires us (envisioned future)?

* Where are we going (vision statement)?

* What will it look like when we get there (vivid description)?

Reaching a common understanding about the inherent beliefs in the organization provides a platform for further explorations of the norms of behavior that help define the organization's culture. This exploration, especially if facilitated by a skilled practitioner, also can help reveal the impact that the organization's structure (the system) has on behaviors. By the nature of systems, structure includes how people make decisions--the operating values whereby we translate perceptions, goals, rules, and norms into actions. People often focus only on their own decisions and ignore how their decisions affect others. Frequently when an organization is faced with moderate threat or opportunity, people begin to replace old behavioral patterns with new ways of thinking and behaving.

Organizational Values and the Bottom Line

There is a growing body of literature that documents the bottom-line benefits of investing in a performance-oriented organizational culture that focuses, to a large extent, on values and leadership. Jim Collins' extensive research, described in his books Built to Last and Good to Great, identifies leadership and organizational culture factors that contribute to lasting economic success in publicly-held organizations. Collins found that having a sound business model and excellent financial management were necessary for good performance. Yet to achieve economic success, he found that effective leadership and strongly-held organizational values made the vital difference.

In their book Hidden Value, Charles O'Reilly and Jeffrey Pfeifer examined case studies of seven publicly- and privately-held companies recognized for superior profitability. The authors found common trends related to organizational values, effective leadership, and a focus on investing in employees that translated into the most successful companies. An analysis of these successful companies and their competitors demonstrated that focusing first on alignment of values and strong cultural norms were distinguishing factors with measurable bottom-line revenue and profitability results. With the right organizational assessments and strategic interventions, these results can be translated to the nonprofit and government sectors in terms of productivity, higher morale, recognition, and financial/budgetary support.

Aligning Core and Operating Values

Core Values

Core values and core purposes in enduring great organizations remain stable, while their operating values--practices, strategies, tactics, processes, structures, and methods--change continually. If vision is the picture we want to create and if mission is the reason why the organization exists, then core values answer the question: "How do we act--what are the norms of behavior that define our culture?" Inevitably, one of the factors that makes significant change difficult is discontinuity between core and operating values and norms.

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Organizational Values and Leadership: Learn More about the Importance of Aligning Core and Operational Values in the Strategic Planning Process and the Bottom-Line Benefits of Investing in a Performance-Oriented Organizational Culture
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