As I See It: On-Demand Values

Sometimes, hidden in the happy smoke that fills corporate annual reports, you can find a small gem of revealing information. One such fascinating disclosure can be found in IBM’s most recent reporting effort. According to Chairman, President, and Chief Executive Officer Sam Palmisano, last year, for the first time since the company’s founding, IBM paused long enough to actually examine its core values. “We needed,” he wrote in his annual chairman’s letter to shareholders, “to reaffirm IBM’s reason for being. . . . “

Proper capitalists will hasten to remind us that IBM’s reason for being is to make attractive profits; a task the company has dutifully performed since before the first punch cards emerged from the tabulating ooze to become computing. But although Wall Street is blissfully unencumbered by non-financial values, many companies have discovered that their employees are not motivated by money alone. People need and want to believe that their investment of fleeting life energy supports a greater good. As Maslow’s hierarchy of human needs attests, once the basics of food and shelter are established and can be predictably maintained, work feeds psychological hungers and provides a more profound degree of satisfaction when it is linked to a purpose higher than survival.

Identifying that purpose is the purview of values. Values are names we give to what is important to us. They are representations of what we aspire to, what we stand for, and what makes us happy. In short, values identify the qualities that give our lives meaning. In the old days, IBM’s values were determined by a fellow named Watson. He told his employees what to believe, how to dress, and how to behave, and they pretty much did what they were told. No fuss, no muss, no input required, no dissent tolerated.

But times have changed. We’ve come to realize that assigning meaning to something as amorphous as life is a highly personal process. The list of possible values can be as broad and diverse as the individuals compiling it. Honesty, integrity, creativity, and freedom are often high on people’s lists, but they are just as apt to choose beauty and spirituality, or glamour and adventure, or safety and security. And each set of values dictates a different set of behaviors, which is why a corporate search for values underpins a desire to standardize employee conduct.

Since values are universal concepts, they can be shared. Thus, a corporation can identify a set of values it wishes to uphold with the hope of attracting, motivating, and retaining like-minded people. Ideally, a company’s policies and practices can be defined in support of the values that drive the business. Still, as IBM no doubt discovered, values change and expand, particularly as globalization embraces alien cultures and foreign employees bring new values, which may conflict with the officially approved ones. The assumption that everyone subscribes to the same set of values by virtue of working for the same company is both risky and naive, which is perhaps why IBM chose at this time to examine what has, by admission, gone unexamined for decades.

But how would they even begin the process?

The scope of the challenge lies in the number of people involved. IBM has 319,000 employees scattered around the globe. How would one go about creating a values consensus among 319,000 people? Well, according to Palmisano, IBM used its in-house technology. In July 2003, employees engaged “in a 72-hour online discussion that took place via IBM’s global intranet.” IBM’s annual report states that employees “discussed, debated and explored what it means to be an IBMer today and what needs to change to keep them motivated for tomorrow.” Palmisano called it a “values jam.”

Seventy-two hours? At first read it sounds good. After all, most companies wouldn’t spare even a few hours to identify their core values. But let’s do a little math. Let’s assume that the entire 72 hours were used, not just eight or 10 hours a day. Let’s also ignore the fact that people had work to do, and assume they were participating in the process while they were at work. Let’s further assume that people were actually listening to one another without interruption and that each person had just one minute to express his opinion. That would allow only 4,320 people to have a say in the process. God forbid each person took two whole minutes to identify and lobby for his pet values; that would permit only 2,160 people to participate. What about the other 316,840 employees?

Well, of course, that’s not the way it happened. Technology permitted “tens of thousands” of employees to do the same thing at the same time. Think of it as the mother of all chat rooms. But that still leaves the vast majority unaccounted for. And if everybody was talking simultaneously, who was listening? Who read tens of thousands of comments and made coherent sense of them? Who knows? What we do know is the result. When the smoking keyboards cooled and the satellites ceased transmitting, these were the values left standing: dedication to every client’s success; innovation that matters, for our company and for the world; and trust and personal responsibility in all relationships.

Well, okay. I don’t have any particular issue with the results, with the possible exception of the use of the word “trust.” Strictly speaking, trust is not a value. It is the result of practicing the values of honesty and integrity. Trust is not something you claim for yourself; it is something you earn in the judgment of others.

But I do take issue with the process. Not only was an overwhelming number of employees apparently not involved, but the process was only half complete.

The more telling half of a values clarification process, which is almost always overlooked, is identifying the conditions under which the stated values are sacrificed. Whether privately or collectively, I’m sure Enron’s employees thought they stood for something, too. We all have values we claim to champion, which, under certain circumstances, we fail to uphold. For example, I value environmental stewardship, so it is important for me to recycle metal, glass, plastic, and paper. But if the nearest recycling center was 100 miles away, I would probably recycle less frequently or not at all. Therefore, the conclusion I reach is that, because of the demands on my time, convenience is a value that limits how far and how often I’m willing to go to uphold my professed value. The claim of valuing environmental stewardship is therefore meaningless unless I can find a context in which it would not be unduly disruptive. That’s a handy thing to know if I want to be honest with myself. The truth is that, under certain conditions, I value convenience over stewardship.

So what does “dedication to every client’s success” really mean? Does it mean losing money on the account if the client requires an unexpected degree of assistance? With very demanding sales quotas, when does a needy client who no longer purchases new hardware or services become a liability? Will people in the field be rewarded for supporting a struggling client even though that support isn’t generating income? And will the sales staff refuse to sell customers things they don’t really need? In short, which competing values trump dedication to every client’s success?

Then there is the issue of customer selection. IBM continues to sell technology to repressive regimes. How dedicated is the company to their success?

Which brings us to “personal responsibility in all relationships.” What exactly does that mean? We’ve recently seen a chorus line of high-ranking officials “take responsibility” for abuses that took place under their command. But it is a responsibility without consequences. What does assuming personal responsibility specifically mean at IBM? Does it include the responsibility to tell the truth? If so, is management obliged to tell it? Will sales people no longer promise customers things they can’t deliver? What would be an accountant’s responsibility should he discover a questionable accounting practice? And which relationships take precedence? Will top management be equally responsible to its employees, its stockholders, and its board of directors? If not, whose interests will be sacrificed and under what circumstances?

This is where the values meet the road, and to such questions we have no answers.

It is perhaps not coincidental that one of the themes in last year’s annual report is that the industry was entering an “on demand era” On-demand computing, on-demand integration, on-demand applications, and so on. Perhaps we’ve also entered an era of on-demand values. Makes for good reading in the annual report, although sadly the process that identified the values without translating them into conduct is reflective of the way we’ve come to value speed over substance. In the end, values are only the label on the garment; they are not the garment itself.

Granted, identifying values is an exercise that only requires a limited time frame. It is often stimulating and sometimes inspiring. But it is never more than a statement of intent. Living values is a process that gives truth to the choices. In that regard, speed will not help IBM. The next few decades will tell the tale.