Companies that are built to last have a clear vision and mission, as well as core values that guide their decisions. Core values keep a business in line by providing an ethical compass for its employees to follow. Every decision from strategic to operational should be made with the core values in mind. This gives the shareholders a sense of consistency that reaffirms their choice to invest in the company.
Putting values of the company first starts with the CEO, Chair, and Board of Directors but quickly trickles down to every employee. It is essential that all workers understand what their company stands for. This not only promotes a sense of pride in their work, but also helps them to make the right choices on the ground level. We see examples of this failure every day. Recently, one of the largest Chinese search engines, Baidu, came under fire by regulators and the general public for their questionable advertising techniques for the medical and healthcare industry.
Their decision-making process was lacking core values. Baidu’s CEO, Robin Li has urged his employees to put the values of the company first, even if it means profit loss. This is a bold statement, but ultimately the right call. While the company will stand to lose money from advertisers, they will lose far more if their users don’t trust their search engine. Li is quoted saying, “If we lose the support of users, we lose hold of our values, and Baidu will truly go bankrupt in just 30 days!”.
By realigning with their values, Baidu is sending a message to shareholders that they made a mistake but want to rebuild trust. Li is also re-evaluating every part of Baidu’s business model with the company’s values in mind. While this is a good effort, it may be too late as this is not the first time they have had problems in regards to their advertising.
Baidu isn’t an anomaly – we consistently see companies losing track of their values and subsequently losing the trust of investors. Valeant is an excellent example of this pattern. Over the last year, Valeant’s shares have dropped due to a growing distrust among investors. The pharmaceutical giant was rapidly acquiring and then falsely boosting the value of other pharmaceutical companies. Clearly this is a violation of the company’s values which include transparency and ethics.
Both Baidu and Valeant misplace a sense of importance on immediate performance. In Valeant’s case, the growth they saw with acquisition was destroyed by misleading their shareholders. In the end, they lost more than they gained.
One way Baidu, Valeant, and other companies can get in the habit of putting values first is by creating safety. A safe environment is achieved when there is consistency – which starts with the board of directors. If the board is working in an atmosphere where it is okay to ask questions without being shot down by other board members, they are far more likely to catch and act on unethical behavior. When the board has a safe environment, it trickles down to the executive team, middle management, and the employees on the front line.
To maintain safety over time and ensure that values are being appropriately considered, businesses can implement Be Cards. This tool is used by board members as well as every employee to remind themselves of core values during times of uncertainty when business challenges may tempt employees to use short term solutions that might harm the company’s reputation or diminish trust.
The purpose of Be Cards is to get everyone on the same page and speaking the same language in the way they conduct business, make decisions, and maintain emotional safety. They promote integrity and transparency at all levels of the company which leads to better results overall.
Li and the Board of Directors at Baidu may want to revisit their core values to ensure that the values, mission, and vision still make sense for the company. If the values do not apply to the work the employees are doing, it is much easier to lower the ethical walls and ignore the values completely when making decisions. This would also be an excellent time to bring all employees including executives, middle management, and people on the front lines together to refresh everyone on what exactly the values are and how to use them in every day work. It is essential that everyone making decisions for the company are intimately familiar with the mission, vision, and core values.
For more information on core values and creating a safe environment, please email [email protected].