Values Based Decision Making

“Out of Vision (or Purpose), Core Values and Big Hairy Audacious Goals, the most important to great, enduring organizations are its ​Core Values…​ Executives spend too much time drafting, wordsmithing, and redrafting vision statements, mission statements, values statements, purpose, statements, aspiration statements, and so on. ​ They spend nowhere near enough time trying to align organizations with the values and visions already in place.”

Jim Collins (bestselling author of Good to Great)

Jim Collins is right.

Despite the fact that organisational values are virtually ubiquitous, we don’t see a corollary explosion in great businesses. From public values failures (like the banking sector here in Australia) to private conversations, implementation of values desperately needs a new approach.

The Current Gap:

With that as context and assuming an organisation has defined its own values, the opportunity sits with understanding how an individual’s values specifically overlap with the organisation values.

How do we build a shared mental model of values that can drive decision making and actions of a whole team of individuals with their own value sets?

And how can we do that if individuals don’t even know their own values?

Values Based Decision Making needs to be an approach that can be both top-down (awareness and development of organisational values) and bottom-up (awareness and development of individuals’ values).


Why now?

  • According to World Health Organisation, we spend 1/3 of our waking lives working.
  • According to Gallup, 87% of employees are not engaged in their work. And engagement is crucial to high performing teams. (from the outcomes above)
  • In a world where speed, interdependence and uncertainty are the norm, values need to be considered in every decision and reinforced with action. And they need to be able to match the speed of change.
  • There is no shortage of values failures. We all have values already. Some people are aware of them, others aren’t and most don’t know how to put them into practice. (Think back – Enron had values too.) It is not enough just to have values, they must be put into action.
  • The Paradox of Choice means there have never been so many choices available and adding values to filter decision making helps to distinguish signal from noise.
  • The adoption of Agile across all types of teams and organisations requires distributed and devolved decision making. Values need to contribute a framework to the quality and consistency of those decisions.
  • Data has transformed the way we make decisions. Values bring a human and ethical layer to ensure the data isn’t followed blindly. (A really interesting take on this in the tech sphere: Working Ethically At Speed.)
  • The pursuit of goals on their own without appreciation and connection is a recipe for suffering.
  • With so many external comparison points, we need an internal anchor or definition of success. Values help us create an internal locus of control.

A quick recap: What are Values?

Values are not just words, values are a way of being. They are the person, team or organisation we are when we are being our best.

For instance, as individuals there is a huge difference between:

  • getting married vs being loving every day.
  • running a marathon vs living a healthy life.
  • graduating with a PHD or an MBA vs a lifelong pursuit of learning.

The fun part is when you combine both – you get married and you’re in a loving relationship, it’s running a marathon and maintaining a healthy lifestyle, it’s graduating with a PHD because you love learning.


What is Values Based Decision Making?

We are wired NOT to like doing hard things. Our brains don’t like adversity, challenge, conflict. We don’t like pain.

A brief analogy:

If I was to cover the floor in broken glass and asked you to walk across it bare footed, you’d most likely think I was mad.

If I was then to say that if you walk across the glass, I have the power to make all of your and your loved ones’ dreams come true and remove all suffering from the rest of your lives… Well, typically the response is different.

What that shows is that we are terrible at suffering meaningless pain. BUT, if we feel the pain is in the service of what is most important to us, then we will not just endure, but embrace great hardship.

Values Based Decision Making works to answer 4 questions:

  1. What are the values you hold and aspire to live up to?
  2. Who is most important to you?
  3. What is most important to you?
  4. What you do when you are at your best?

By defining, then organising those answers, we can make decisions and drive action in the service of values and what holds the most meaning for us.



What Values Based Decision Making is not:

  1. It is not an answer. It’s an iterative process and, frankly, the work is never done. It starts with self-awareness at an individual level (and shared awareness for teams) and then migrates to action. And action is everything.
  2. It is not about adding anything new. Values Based Decision Making is about minimum effective dose. Remove the unimportant and reconnect with what is most important.
  3. It isn’t necessarily going to make life easier. In fact, life and decisions may become more difficult once you articulate your values. Living up to your values will present new challenges – mentally, emotionally and behaviourally – every day. But using your values to guide your decisions will make life so much more purposeful and meaningful, however you define that for yourself.

The Process of Values Based Decision Making:

Once Values are understood conceptually, here are two approaches – one for individuals and one for teams.

For individuals:

  1. Build self-awareness:
    • What are your values?
    • Who is most important to you?
    • What is most important to you?
    • What do you do when you are at your best?
  2. Make sure that your current goals are in the service of your values.
  3. Build an action plan to bring your values to life through habits and routines.
  4. Put your values into practice.
  5. Accelerate the development of values and practices through a coaching process.

For teams and organisations:

  1. Build self-awareness for the individuals within the team (as above).
  2. Build a shared vision and shared awareness for the team or organisation as a whole.
  3. Foster a culture of psychological safety (Google’s #1 indicator of team effectiveness).
  4. Create a framework of expected team behaviours to help translate values into actions.
  5. Build and certify the capacity of leaders and key people within an organisation to continue to coach existing and new team members.
  6. Embed values and bring them to life throughout the organisation from job ads and performance management to product design, communication rhythms and marketing.

If you, your team or your organisation is struggling to define values or to translate them into decision making and action at scale, or if you are working to innovate in those areas, I would love to talk more with you about your approaches and attempts.

And thank you to Jonah, Alix, James, Phoebe, Lucy and Adam for helping to shape these ideas.

Mistakes, Facilitation and Coaching Olympic All Stars – Arjan Vos

Arjan Vos is a Dutch women’s water polo coach and was responsible for a diverse squad at Queensland Academy of Sport. Some members of the squad were just beginning their elite water polo journeys as teenagers. Two of them – Bronwen Knox and Ash Southern – have been named in Olympic All Star teams. He is renowned for his approach to his athletes and the loyalty and trust he inspires.

In this conversation Arjan shares his coaching philosophies including:

  • the role of facilitation vs goal setting as a coach
  • His key coaching question and why it applies to juniors and veterans: What is their goal and how can I contribute?
  • why it’s important stay out of the way and not to give too much as a coach
  • the importance of truth
  • why coaching is an attitude
  • why creating space for mistakes is essential to improving
  • how and why he develops critical thinking in his athletes
  • his reflection strategies
  • and more.

Have you had any great coaches, teachers or mentors? What were their philosophies? Let me know in the comments.


People mentioned:

Resources:


 

Why do we exist as a business?

It’s an existential question I asked myself after reading Ben Horowitz’s blog post: Lead bullets.

Fortunately I was reading Ron Baker’s book Implementing Value Pricing at the time.

Ron proposes a simple, yet extremely demanding, 2 part answer:

  1. The sole reason for a business to exist is to create value for its customer.
  2. Value, both tangible and intangible, is solely in the eye of the customer.

It’s simple because it can be communicated in 2 sentences.

It’s extremely demanding because of all it implies.

If value is solely in the eyes of the customer, then this answer demands that you understand your customer and their needs and wants, that you help them identify value, that you deliver on the value that you promise and that you continue to help them extract value across the lifetime of your product or service.

The beauty of this is that those who can live up to it will reap the rewards by being able to charge a price commensurate to the value delivered.

“We are committed to delivering value at least 3-10x the price we charge.”

This is our new commitment at Bluewire. It changes the discussion with an existing or prospective customer from adversarial sales to genuine partnering and deeper relationships. It sets a standard of excellence for our delivery and ongoing service. It creates accountability to deliver on that value.

2 elements of the book really clarified this new perspective on value for me:

The first was a graph:

Customer Value vs Price vs Cost Graph

Price reflects a portion of the value created for the customer, so if you grow the value, you can grow the price.

The second element was this:

Poor business is: Service > Cost > Price > Value > Customer

Good business is: Customer > Value > Price > Cost > Service

The customer must always come first.

Then you measure the value to them, decide on a price, and work out the cost to deliver the service required.

So it’s a call to arms to grow value, both tangible and intangible for customers. And with it comes a renewed sense of purpose, a reason to exist.

It’s the reason you pick up the phone with a smile.

It’s the reason you say no when you can’t deliver the value to the customer in the first place.

It’s the reason you have a moral obligation to help your customers continue to extract value from your product or service.

It’s the reason you keep checking on customers in an ongoing relationship.

It’s the reason your customer has to work with you to extract this value from your product or service as soon as possible.

It’s the reason you need to explore as many options as possible.

It’s the reason to stay current with events and trends and best practice, because you might be able to help your customer extract further value from your services.

It’s the reason exactly the same advice can have hugely different value to different customers and hence the reason you can charge different prices.

It’s the reason you must keep improving your business, so you can help your customers improve theirs.

It’s the reason your communication is so important – how do you know what is valuable to the customer without talking to them?

It’s the reason that value is not rational – it is not always absolute dollars, but speed, response times, flexibility, comfort, self-esteem, “cool”, a smile, trust, ease of use, great design, simple, fun, taste, great service, friendly atmosphere, lighting, music, attitude all make a difference.

Ultimately, it’s the reason for everything you do as a business.

So, finally, to blend Ron and Ben:

If you don’t deliver value to your customers, why do you need to exist at all?

I think it’s a question worth revisiting everyday.