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Analysis: Critical Incidents

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Creating alignment in an organisation is never easy. It is difficult enough to have the entire organisation aligned to hard targets and objectives and much more challenging to do so with the relatively "softer" aspect of values.

Unfortunately, "organisation values" is sometimes an initiative suggested by a management consultant, the communications department or the HR department, and it sounds like a "good thing to do". But if done hastily, without enough management time and attention, there is no buy-in and common understanding among large sections of the organisation. Not surprisingly, in such cases, it never gets farther than some power-point presentations, and posters and honourable mentions in the induction programme. Even more dangerous, it can actually create cynicism when the senior leadership is not seen to be living up to and abiding by the values of the organisation.

But let us say that we are in an organisation where the top management actually has a common set of values and it wants the same values reflected in its ways of working. Red Dot certainly appears to be in this category, which is laudable. Mahir has created a team, which has the same values of fair play and mutual trust as he does. This is the first step in creating an organisation that not only has common values, but actually lives by them. However, it is not clear if the values at Red Dot have been defined clearly in the organisation and shared with employees, vendors and partners; this would have then enabled a path for Indira to discuss with HeadsUp, and she should have.

An organisation, which is committed to its values should look at the following aspects:

Start with the top team and ensure buy in: Values, which drive culture, have to be led from the top. The leadership team has to be cohesive in what it truly believes in. Sometimes, the leadership team may be a disparate set of people with different value systems. It is worthwhile for the top team to spend time together, to arrive at what they are willing to sign up for as a team. When there is a new recruit into the top team, the alignment with these values should be a crucial determinant in the selection process.

Keep it simple: three-four key values — defined well in terms of what they mean, how does it manifest in behaviour, what behaviours will not be tolerated — is the next step. This is not a laundry list of all worthwhile values but the crucial few that is most important for the organisation for its long-term sustainability and growth.

Some organisations make this a part of their "business principles" or part of their mission statement. What is important is to provide clarity on what we stand for and what we will not tolerate — in our employees and in our partners.

Communicate the values to employees and all stakeholders: This can be done at a wide variety of interfaces and contact-points — induction, appraisals, contracts, employer and organisation branding, etc.

Leaders should look-out for ‘critical incidents': This is, by far, the most important part of the process. If employees have to weave the organisation's values into the way they work, this needs more than the mandatory mention in the induction programme. It is important to remember that employees not only watch what top management pays attention to: they watch even more carefully what the leadership team does not pay attention to! If the management ignores a key violation of its espoused values by an employee (sometimes a star employee!) or it takes a business decision, which is seen as contradicting a stated value, it takes almost no time for the employees to figure out that these are merely words on paper.

It is here that Jatin, however well meaning, has made a serious mistake. Not following through on a customer complaint is a way of ensuring that employees conduct business by their individual value systems and not necessarily what the organisation wants to live by. Indeed, an organisation's response to complaints — whether by customers or other stakeholders is one of the most powerful means of communicating what it really stands for. Mahir's mention of the Richard Branson example is a case in point. Good leaders always look out for such ‘critical incidents' to reinforce the values of the organisation. When a critical incident occurs, it should not only be addressed by the leader, but the actions taken must also be communicated to all stakeholders.

Mahir should also follow up with Jatin on his lack-of-sufficient action over the issue. He may be doing Jatin a favour. On the other hand, if he realises that HeadsUp works on a different value system, which contradicts the very essence of what he would like Red Dot to stand for, he must use this as a ‘critical incident' opportunity to demonstrate the same. Going forward though, it would be judicious to make the "terms of engagement" clear in all partner contracts to ensure that there are no misunderstandings later.

Priya Gopalakrishnan, an IIM-A graduate, is the HR Director at ING Vysya Life Insurance. The views expressed here are personal.

(This story was published in Businessworld Issue Dated 02-11-2009)

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