Values adding impact
Karen: Speaking to senior executives that we have worked with in the past we found that there is really only one value that counts, integrity. This reflects the findings of a globally renowned polling organisation who conducted workplace interviews with 10,000 people to discover what they desired from leaders. They wanted integrity to be displayed in four ways; tell me the truth, show me you care, keep me safe and give me hope. Without integrity all other values crumble, it is needed at all strategic levels. It can only be displayed through the behaviour of leaders and it needs to be shown in everything they do. That’s one hell of a brief to give to an individual on a 24/7 basis.
Fiona: The CFO, of a FTSE 100 business, spoke about their CEO who has been in post for a year. They have five corporate values, they are things the customers care about and how the customer sees them translates to how investors see them. . These include respect for the environment, treating people fairly and having an ethical supply chain. He was adamant that they would not have been able to outperform their peers if those values weren’t visible in what the CEO did every day. They outperformed them in turnover and share price, and most people would say that the culture and values have contributed to their last performance.
Karen: This goes back to the desire to be kept safe. Investors want to know that both their money and reputation will be kept safe. They want to be assured that their money is in a place that is socially acceptable. They want protection from the media and in the environment of the consumer and general public. However, there are potentially conflicts there. There are certain things CEOs know but can only share at certain times. Listed organisations must inform the City as soon as they feel they need to replace a Board member. That isn’t always appropriate unless a replacement has already been lined up. They have to make judgement decisions that show they are keeping all stakeholders safe but can’t necessarily share the details at that time.
Adrien: I spoke to one CEO who said that while integrity is critical, the challenge of multiple stakeholders meant they had to also be something of a chameleon. They have to satisfy owners of the business, customers, tens of thousands of staff, regulators, government and industry bodies, suppliers, partners and lobbying groups. All of them want a piece of their time and while integrity and the truth are essential these stakeholders have competing objectives that have to be managed. They have to decide how transparent they can be and sometimes share different views with different people at different times.
Fiona: When looking at what drives change, cash or customers, the majority of leaders would agree that it is customers that drive change, in culture and values. . There is one example where a CEO joined a business at the bottom of the league table in their sector and changed everything within the business to make sure everyone was more aware of the customer. However, having happy customers starts with having happy staff. So, decisions needed to be made on if the right staff were in place and if not how this would be changed. The CEO also made it imperative that all directors go into the business and use their products and services. They now have to spend at least five days a year doing this as which is built into their objectives. He does this himself to ensure that the business he thinks he is running is the business he is actually running.
Adrien: Retail financial services is a vast space with a huge variety of businesses. They are all very different. Their CEO requirements can be effected by the life stage they are at as an organisation. For example, if you look at banking, in start-ups the CEO may be casually dressed and hold casual conversations. In the City when talking to the CEO of a corporation in the same sector they are more likely to be very prim and proper. They are hugely different and it shows that size and the stage of life cycle must be considered. You can argue that different styles of leadership are appropriate for the early stage, the steady stage, the turnaround stage, and this can be complicated when businesses are growing.
Jon: A good example of this life cycle would be Tesco. Terry Leahy was there for many years. He had a very autonomous style that allowed his staff to run the business. Philip Clarke then came in and he was much more directive. He had a hands on approach that built a level of resentment amongst staff. As a result the business began to decline. His successor Dave Lewis has a different style altogether. He’s made very bold, brave decisions and while we don’t know what the outcome will be, it will differ from his predecessors.
Karen: Diversity is a value that is having a high impact on businesses. The inclusive culture and reputation of any organisation starts with the CEO. We recently hosted a breakfast for females within risk in response to clients asking why gender diversity was poor in this area. We found that the issues they were facing were not function specific, they were associated with the behaviours of the leadership at the top of the organisation. It was not necessarily how individual CEOs behaved towards females, it was how they were seen to live their life 24/7. If they are going to implement flexible policies to allow women to do the school run in the morning then it needs to be a cultural change across the organisation. However, that behaviour will only permeate the culture if the CEO is completely open about this. There were instances when a CEO would do their own school run, their staff would know, but they would hide it in their diary. That gives businesses a reputation for simply paying lip service to these issues without addressing them.
Fiona: A Holistic approach is important. The values of a company affect brand reputation, that affects their business and that affects their cash. However they also impact how staff within an organisation work. It’s not just about compliance, it’s about the ethical behaviour, their people and their values.
Jon: The organisation will only do the right thing if the vision is set in the right way which can only be done by the right CEO. They have to be a role model and if they start to do something at odds to the vision presented, it won’t work.
Karen: The bigger the organisation, the bigger the impact the CEO can have through the behaviour route. Without this, even with all the right policies in place to encourage responsible working from staff, the behaviour of staff can cause issues. If behaviour is allowed to get out of control because the CEO fails to confront it you will find people will fail to follow set processes.
The CEO can impact on the next level down, to ensure their behaviour is mirrored, and that will cascade down throughout their organisation. Behaviour has such a major impact that CEOs cannot afford to ignore it.
Hoggett Bowers is an international privately-owned executive search organisation, founded in 1971. The firm works with clients on a retained search basis on a range of senior executive and non-executive appointments, and also has a senior interim management arm.