What Matters Most – Does Your Culture Prioritize Profits over Values?
When push comes to shove and you or your business is struggling, which operating principle wins out – profits or values? Business leaders spend a great deal of time crafting corporate values for leaders to model and employees to follow such as integrity, accountability, teamwork, diversity, excellence, etc.
But how many companies live their espoused values on a consistent basis?
A Case in Point – Espoused Corporate Values
Here’s an exemplary list of corporate values from a company website:
There’s even an added comment: “Never knowingly violate laws, regulations, policies, or standards, even if you think doing so would lower costs, increase earnings, or delight a customer.” Sounds grand.
Can you guess what organization has chosen these values for their employees? PG&E. The public utility recently being blamed for multiple deaths and countless wildfires in California.
The Reality — Actual Corporate Values
We now read that documents obtained by The Wall Street Journal reveal that PG&E has long known that parts of its nearly 19,000 mile system had “reached the end of their useful lives.” It seems company leaders knew that many of their high-voltage powerlines could fail and potentially spark fires. We now know the devastation and tragedy their neglect can cause – over 1,500 California fires in the past 6 years — including the deadliest ever. PG&E’s critics accuse the company of shirking safety precautions to funnel money toward investor dividends.
Mike Florio, who was a California utilities commissioner from 2011 to 2016, told The New York Times. “There was very much a focus on the bottom line over everything.” A 2017 report to state regulators highlighted PG&E’s tendency to act only after a major disaster.
If company executives had truly “lived” their values around protecting the environment, acting with integrity, and communicating honestly, the potential fire danger would have been acknowledged long ago, necessary upgrades would have been accomplished, destructive wildfires might have been avoided, and PG&E would not be facing bankruptcy and dissolution.
Who’s to Blame?
We point the finger at the overall PG&E corporate culture that appears to have clearly prioritized profits over espoused values.
We define a company’s culture as how things truly get done in their organization. Culture can be measured by understanding the way people think, behave, and work. This includes the known and unspoken values and assumptions that drive key business practices and behaviors — especially in leaders.
Employees look to their leaders to model the culture and set the standards for behavior. As hardworking and dedicated as so many PG&E employees are, they were betrayed by executives who did not walk the talk and by the actions (or inactions) of employees that prioritized promotions or job security ahead of speaking the truth. While it appears that the problems started years ago, now the entire organization is literally falling apart.
Even small pockets of misaligned beliefs and behaviors and decisions can create a large wave of problems down the road.
Does Your Company Culture Prioritize Profits Over Values?
If you are not sure, you would be wise to assess your current workplace culture to see where you stand in terms of organizational health, high performance, and strategic alignment.
The Bottom Line
Be aware how much you as a business leader are responsible for your company’s culture. If you expect your workers to follow corporate values as stated, you must show them how and make sure there are consequences for not following them. Can you honestly say you are on the “right” side of the values over profit controversy?
To learn more about how to create a healthy, high performing, and aligned corporate culture, download The 3 Research-Backed Levels of a Healthy, High Performing and Aligned Culture
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