In a fast-paced and ever-changing world, values can provide the necessary stability for people and organizations. Here we will explore how values-based leadership can give employees, managers and organizations an advantage in today's leadership environment.
What is value-based management?
Value-based management is about managing the organization in accordance with agreed-upon values for the organization. In this way, the company's values are activated in the concrete behavior exhibited in everyday life. Depending on the values that the company has adopted or nurtured, concrete management decisions will be influenced by these values when executing to achieve the company's goals.
If the organization's leaders want to practice values-based leadership, it's crucial that they have in-depth knowledge of the company's values and understand what they are based on, as well as how senior management sees these values being lived out in the organization. The value-based management approach is most successful if top management is also aware that values must be reflected in many of the organization's structures, such as recruitment of managers, incentive structures for all employees, customer alignment, production methods, etc. This will create synergy and coherence in the overall management of the organization.
Specifically, values-based leadership means that leaders choose their leadership actions, make decisions, prioritize tasks and recruit employees with the organization's values as a guide. For example, if the organization has a value to "exercise due diligence," this means that leaders are expected to consider risks, prepare for plan failures and nip problems in the bud. Each leader is expected to reflect on how they should act to lead in line with the company's values. In this way, the values set the framework for good leadership in the organization.
Read more: What makes a good leader?
Let's put into a few more words what is actually meant by values in a management context.
Understand the concept of values in a leadership context
Values in an organization are the actions and norms that are considered right or correct. In this sense, you could say that values are our guidelines for what actions and qualities are considered right and wrong. Our values act as our personal compass, our "true north" - the direction the needle points when navigating everyday dilemmas, actions and decisions.
A company's values usually arise from fundamental elements of the company's origins. Values can come from a particular view of humanity that permeates the organization's core mission. Values can stem from a visionary founder who has strong ideals about how the organization should operate and deliver value. Values can also develop from habits, sayings and rituals that employees practice over a long period of time.
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To achieve success with value-based management, it is important to have clear values that are easy for individual managers to relate to. Therefore, the company should somehow define its values in a clear and concise way.
When defining your values, the process can be based on both a backward-looking and forward-looking approach. You need to answer the following questions:
- What values have been fundamental in leading the organization to the point where it is today?
- What values will be fundamental to ensure the organization's survival and growth in the future?
A combination of these two approaches will typically provide the most solid foundation for implementing a values-based leadership approach in the organization. This way, values will both reflect the stability and continuity that already exists in the organization, while also providing the opportunity to drive change towards a stronger version of the company in the future.
Read more: Change Management: Succeed in an ever-changing world
Concrete example of value-based management
Here at Feedwork, we have four values that we try to run the company by. These values reflect our success strategies, our view of people and the fact that values should guide our team. Our four values are:
- Feedback over ego
- Progression over perfection
- Relationships over profit
- Sustainability over consumption
When the values are translated into leadership behavior, it means, among other things, that we must:
- Seek customer feedback and involve colleagues in our work
- Prioritize working pragmatically on solutions that work, rather than getting caught up in details
- Build and strengthen relationships with our customers and partners, even if it sometimes means losing profit
- Choose sustainable solutions that work in the long term instead of one-offs
Why you should work with value-based management
The benefits of adopting a values-based approach to leadership is that you can scale your leadership across a large organization working across large distances.
The values-based approach, when used correctly, can provide a balance between freedom in task performance for individual leaders while ensuring consistency in leadership across departments, teams and continents.
At the same time, value-based management encourages individual managers to relate to specific situations and gives them the freedom to choose well-thought-out solutions. The manager's job is to consider each situation and compare the options with the company's values in order to make the best possible decisions for themselves and the company.
Read more: Situational Leadership: Adaptation as the key to effective leadership
If the leader is fortunate enough to work in an organization where there is alignment between the organization's and the leader's personal values, the leader can also experience great motivation by feeling supported in making decisions on a basis that is in line with the leader's personal values.
As an employee, a major benefit of values-based management is that you will experience continuity, recognizability and meaningful decisions from management that fit with previous decisions in line with the values. At the same time, you'll be able to transfer the values to your own self-management and work on everyday tasks. Employees will feel more confident as they understand and recognize the arguments behind the decisions made in the organization.
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Without micromanaging individual leaders, values-based leadership can help keep your organization on a steady course towards achieving its goals and vision. However, it requires a thorough effort and clear direction.
Challenges in value-based management
Among the downsides of values-based leadership, we have to mention that it requires a lot of clarity around values from the organization's top management to succeed. Many leaders are busy and driven by their habits and routines, which means that values really need to be worked into their spine to become a permanent part of their leadership compass. Think about how much time you need to spend on a thing or new knowledge for it to affect your own behavior and reflection.
Examples of ways top management can ensure the values are clear to the organization's leaders:
- When managers are evaluated in their leadership, they need to be compared to the values.
- When new leaders join the organization, they need to be introduced and their understanding of the values needs to be ensured.
- When management decisions are made that are not in line with the values, this needs to be pointed out and an alternative direction needs to be set.
- Managers should be given regular opportunities for training and reflection on values-based leadership.
How to successfully implement value-based management
You might be thinking: "That values thing sounds right up our alley," but unfortunately, achieving success with values-based leadership is easier said than done. Here are some key points to consider when it comes to implementing values-based leadership in your organization:
- Articulate some clear values
It is crucial that the values are relatively few, simple, and specific so that they are easy to remember and use in daily management.
- Include employees and managers in the process of formulating the values
Avoid imposing "fantastic new values" on employees. Find a balance between asking employees what values they perceive as dominant and important in the organization and implementing new values that will be important in the future.
- Train leaders to navigate with the help of values in their leadership
In order for leaders to translate values into concrete actions, decisions and plans in the organization's operations, it is necessary to build understanding and competence in the application of values. This can be done in many ways, including case work, coaching and group workshops. Be aware that one-off training in conjunction with the launch of the values is not sufficient. It is important to consider how new managers should be trained and how to ensure that using the values in a busy workday remains a continuous focus for managers.
- Use values actively in your recruitment
Consider how you can hire people with values that match your organization's values. When there is alignment between personal and company values, values-based leadership has the best chance of success. This means considering how to hire people with values that match the organization's values.
- Communicate massively about the values and their importance in everyday life
Be persistent in your internal communication about the values and their application. This applies both in the company's internal communication and in the manager's role of communicating about and with the values to employees frequently, diversely and meaningfully.
The most important learning in leadership occurs when we have concrete real-life experiences and genuine encounters with real people in the organization. This means that you can read all you want about different approaches to leadership, but the real and essential learning elements occur in real-life encounters. We hope this article has answered some of the questions you had. Good luck with your future work.
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