Importance of Core Values

In a recent issue of the Corporate Dossier , Ed Cohen, the ex-chief Learning Officer at Satyam Computer Services reveals an interesting factor behind the downfall of the founder and Satyam, and its founder Byrraju Ramlinga Raju - the absence of defined core values. Since its inception in 1987, Raju had outlined the purpose of Satyam Computers as 'AICS Delight' (an acronym for Associates, Investors, Customers and Society at large) and this certainly seems to have worked for him in the golden years of Satyam's growth. He won several awards and honours including the Ernst & Young Entrepreneur of the Year for Services in 1999, Dataquest IT Man of the Year in 2000, CNBC's Asian Business Leader - Corporate Citizen of the Year award in 2002 and E&Y Entrepreneur of the Year Award in 2007.

But, according to Cohen, AICS wasn't enough and the company needed core values. Reason - the articulating of core values would create a conscious choice with a deliberate choice around the core values. The lack of core values coming down from the top, resulted in their being defined from the middle and bottom line and these core values defined at the lower levels, stood the company in good stead when the crisis hit. So even though Raju and Satyam were synonymous in the minds of his employees, when the failure happened and the initial shock had subsided, everyone responded with 'How can we save this? How can we pull it together? We have responsibility to our customers, employees investors, even to society.'

In this crisis situation, the 'AICS delight' mission statement would not have helped - the delight had gone out of the window with the scam revelations. It was only the core values defined at the lower levels (Cohen does not tell us what they were), that the risk of the company going bust was mitigated. People started planning scenarios of various possible arising situations and drafted a 30/60/90 days start-stop-continue plan.

A company's resiliency is sorely tested during a time of crisis and Cohen talks about the 'heart' the people of the organisation showed during the crisis. One of the 'heart' factors was surely the core values.

Leadership lesson: A company's core values shape the culture and define the character of a company. They guide the behaviour of it's employees and the way decisions get made.

Have you defined the core values of your company? And if you have, are you making sure they govern your own, as well as the actions and behaviours of your employees?