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Added Values: Key findings and recommendations

Helen Mayson

Added Values report

While there is a high level of public focus on ethics, managers are still frequently faced with ethical dilemmas at work, placing them under increased pressure. 63% of the managers we surveyed say that they have been asked to do something contrary to their own ethical code at some point in their career, while 43% of managers have been told to behave in direct violation of their organisation’s own values statements, and 9% had been asked to break the law

The Institute of Leadership & Management (ILM) and Business in the Community (BITC) recently conducted research into values and ethics in UK organisations. Added Values: the importance of ethical leadership investigates how leaders and managers feel about ethics and values where they work and brings their own experiences to life.

While 83% of managers say their organisations have a statement of values, it’s clear from our results that employee behaviour often does not fully reflect them. In fact, one in eight (12%) managers say that the way people behave in their organisations is not that close (9%) or not close ‘at all’ (3%) to their organisational values. This disregard for values has a negative impact on employee wellbeing, and one in ten managers (10%) say they have left their jobs as a result of being asked to do something at work that made them feel uncomfortable. With so many organisations unable to adhere to even their own stated values, the impact on retention and recruitment of talent could be only the tip of the iceberg in terms of damage to UK business and its reputation.

The management disconnect

Just 38% of all managers surveyed feel that behaviour and company values in their organisation are ‘very closely’ aligned, compared to 66% of directors. First line managers are the most pessimistic about the effect of organisational values on behaviour, with 17% saying alignment of behaviour and values where they work is ‘not that close’ or ‘not close at all’ compared to 7% of senior managers, 10% of directors and 0% of CEOs. First line managers are also the least likely to refer to their organisation’s values statement when making decisions (65% of all managers compared to 84% of directors). This management disconnect between those at the top and bottom of an organisation reflects how difficult it is to engage lower level managers with values, and also how hard it is for managers to translate their organisation’s values across their teams.

Concern over whistleblowing

When ethical breaches do occur at work, there is a distinct lack of confidence in how effectively organisations will deal with them. One quarter of respondents (28%) are either certain or concerned that they would be negatively affected if they were to report an ethical breach at their workplace. Managers were most fearful of experiencing negative consequences (17%) compared to directors (9%), who were least likely to expect any problems in reporting breaches of ethical behaviour. This disparity suggests a real discrepancy in the perceptions (or experience) of staff depending on their level of power or influence in the organisation.

Managers don’t always follow the rules

Over half of managers (53%) rate their own ethical standards as higher than their organisation’s, suggesting that managers trust their own judgement over imposed values statements. Given a choice of three statements the majority of respondents (54%) say they prioritise ‘doing the right thing’, over ‘achieving the right outcome’ (20%), with ‘following the rules’ the least popular choice (19%). This highlights how important it is for organisations to ensure their values statements are not just seen as a list of regulations to comply with, but a framework or baseline within which managers are trusted and encouraged to use their own ethical judgement. Managers and leaders that are aligned to their organisation’s values will make decisions that reflect those values.

Changing values

83% of respondents said that their organisation had an explicitly stated set of values and, of these, over half (54%) said that this statement had been changed since 2008. The most common driver for change was the shifting external economic, social and political context (54% of managers said their organisations had changed their values statement because of this). However, over a quarter (29%) of organisations had changed their values due to the arrival of a new CEO or senior figure, which raises questions over the ease and regularity with which what an organisation stands for can be influenced by one individual.

Consultation counts

Having an explicit values statement helps to align company and employee behaviour more effectively than assuming there is a set of shared values. Managers working in the 83% of organisations with an explicit values statement are more likely to say they have never experienced serious conflicts (41%) between their personal and organisational values than those working somewhere without a values statement (28%).
But not all values statements are equally effective. Managers who were consulted in the creation of a values statement were significantly more likely to refer to those values when making decisions (78%) than if they had not been consulted (60%), showing managers are most engaged with values that are created and reviewed in consultation with staff, shareholders and stakeholders.

Recommendations

Link values to strategy

Tying values into the strategic objectives of an organisation means that the way people are expected to behave and the goals they are required to achieve are in harmony. Values should not be formulated in isolation, but built as part of the organisation’s overall strategy. Values should drive the behaviour that organisations need to help them achieve their goals.

Target your middle managers

Middle managers hold the key to eliminating the management disconnect between senior leadership and front line staff. They require targeted support to ensure staff who are under increasing pressure to make key decisions do so in an ethical and sustainable way. Provide this support by using workshops to discuss ethical issues, linking values to performance and engaging them in setting and reviewing the values.

Tackle breaches openly

When ethical breaches do occur, organisations should be more willing to discuss them throughout their organisations (in confidence if necessary), discerning the reasons these breaches occurred and what could be done to avoid them in the future.

Develop leaders at all levels

Leadership is the driver of cultural change in organisations, so develop your leaders to show that they understand the organisation’s ethical statements, embody these values, and in turn embed them across the organisation. A values-based leadership approach determines what behaviours are encouraged from leaders and is closely linked to inclusive leadership, which facilitates innovation, makes the most of talent and enhances organisational performance.

Be aware it’s not all black and white

Not all ethical decisions will be black and white, and managers will often need to use their own judgement to make hard choices. Here, organisational values should serve as a framework, not a rulebook. Ensure that employees know, understand and can explain clearly what the organisation’s values look like in practice – the behaviours that are encouraged and those that are unacceptable. Then allow them to apply their own judgement, using the values as a core structure.

Bring your values to life

Senior leaders should model the way for other employees by showing how they display the company values in their choices and behaviours. When strategic decisions are made, show how they reflect the organisation’s values and communicate this to staff. Link values to performance reviews, by rewarding behaviour that embodies these values, and be explicit when communicating why these values are important.

Build values in consultation

Values developed in consultation with staff are more effective, so develop your values statement by involving employees from all levels in focus groups, surveys, one to one communication with managers and group discussion.

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Added Values: the importance of ethical leadership

9% of managers have been asked to break the law at work

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