The concept of core or shared values gets a lot of press, with most professional service firms' Web sites promoting their core values to prospects, clients and recruits. But, like so many management ideas that are on the soft side, they are often more talk than reality.

For too many firms, their espoused core values don't actually represent what the firm stands for, and they don't guide individual behavior. Often, in fact, neither the partners nor the employees know the firm's core values, and no one in the firm is evaluated or rewarded on how well they live them.

But one of the things that we have found time and time again is that the truly best firms have a core set of values that they live by. The values do describe what the firm stands for and do influence what people do and how they do it. So, here is what we recommend that firms think and do in order to ensure that their core values are truly meaningful.

1. You have to live your core values, so make sure they are important to you. Nearly every firm we know quotes teamwork as one of its core values, but in too many of these same firms, the reward system focuses on individual, rather than collaborative, behavior. So, unsurprisingly, most people believe that collaborating with their colleagues is less important than doing things themselves.

To ensure that the firm has values that actually drive the behavior that it wants its people to exhibit, have the partners and employees spend some time thinking about which values are important to them. The typical ones like integrity, client service, and respect for others will probably come up, but there may be some surprises -- in one U.S. firm we worked with, for example, they listed "belief in the foundation of family."

2. Give examples of how the values are actually lived in the firm. Words on their own aren't enough. The description of the values in action, in the everyday interactions between people, is key. If these behaviors are ill-defined or don't exist, one of the ways to generate the list of behaviors that underpin each of the values is to ask groups of people to provide two or three examples of how they see the value being lived in the firm. When the behaviors that underpin each value are defined and shared across the firm, everyone knows what the values mean in practice and what behaviors are acceptable.

3. Core values apply to everyone in the firm -- employees and owners. Partners need to embrace and constantly live the values. Remember, the partners are the culture in a professional service firm. What they believe, what they reward, what they do, and how they do it determines what and how things get done. Core values are for everyone in the firm -- with no exceptions!

4. Core values don't bend to fit the circumstances. This is key. Values must not be compromised at any time. A story in the U.S. Air Force's Little Blue Book -- the guide to its core values -- illustrates this point perfectly. In the story, Admiral James B. Stockdale writes, "In 1965, I was crippled and I was all alone (in a North Vietnamese prison). ... The one thing I came to realize was that if you don't lose your integrity, you can't be had and you can't be hurt. Compromises multiply and build up when you're working against a skilled extortionist or manipulator. You can't be had if you don't take that first shortcut of 'meet them halfway,' as they say, or look for that tacit deal, or make that first compromise."

5. Core values don't change every year. While visions may be adjusted and circumstances force a change in focus, the firm's values are the bond that holds the firm together. Occasionally, making one of the firm's internal values more externally explicit may be necessary, but such a move is about presentation, not substance.

6. Tie core values into the firm's evaluation system. As the teamwork example earlier illustrated, the old adage that, "People do what management inspects, not what management expects (and rewards)" still holds true, so if a firm wants its values to dictate behavior, then the way people behave should be part of the firm's evaluation and reward process. Using an evaluation process, like a 360, which includes the mandatory sharing of the output between the team members, is one of the most effective ways of ensuring that espoused behavior becomes reality.

7. Let the firm's markets know what the values are and why they are important. Clients and prospects often refer to a firm's values in determining whether they want to work with a particular firm. Firms should be proud of their values and want others to judge them by what they are and how well they live them.

But what about the firm's other market -- the market for people? In Good to Great, Jim Collins tells us that we need to get the right people on our bus. And this is especially important in accounting firms, where differentiation is only achievable through delivery. But before people will get on the bus, they want to know what the firm's owners' value. Core values help get the right people on the bus because they tell the recruits the price of admission to the firm.

 

A FINAL REMINDER

Core values point everyone in the firm in the right direction and give them a clear fix on what is acceptable and what isn't. They drive the culture and underpin everything that the people do both internally and externally. They truly are core to a firm's success.

Rob Lees is a founding partner of Moller PSFG Ltd. and a consultant to professional service firm leaders worldwide, as well as co-author of When Professionals Have to Lead. Reach him at rob.lees@mollerpsfgcambridge.com. August Aquila is CEO of Aquila Global Advisors (www.aquilaadvisors.com), and co-author of Compensation as a Strategic Asset and Client at the Core. Reach him at aaquila@aquilaadvisors.com or (952) 930-1295. © Robert J. Lees, August J. Aquila, 2012. All rights reserved

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