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No matter where in the world people live, they all want the same things out of work: great relationships, respect, fairness, equity, and the opportunity to live their dreams. That’s why values isn’t just the latest business buzzword — values have become the most important factor determining a company’s success.

I recently had the opportunity to interview Jim Ludema, professor of global leadership at Benedictine University and the co-founder and director of the school’s Center for Values-Driven Leadership. During our chat on my radio show, iLead: The Leadership Connection, Jim told me business is the most powerful institution on the planet, one that affects the lives of more people than any other.

“Because of that, I think we really need to pay attention to what kind of communities we’re creating and what kind of impact business is having on people and on society,” he said.

At the Center for Values-Driven Leadership, Jim studies how great leaders contribute to positive change and teaches corporate executives how to have a transformative effect on the world.

“Just about any company has a set of values that you see up on the wall,” he said. “But in many cases they’re not very well lived out — in fact, you’ll see companies, like Enron, that have a great set of values but live out the exact opposite in the marketplace.

“But there are hundreds, if not thousands, of companies that do really integrate their values into their day-to-day operations in a significant way. And those are exactly the kind of companies that we want to support and help grow.”

Building values into your organization

Jim offered examples of successful companies that are committed to a values-driven approach to doing business, including BerylHealth, a call center in Dallas, Texas that handles calls made to healthcare providers.

“Beryl’s core value is compassion,” he said. “They’ve discovered that when people are calling a hospital, they’re nervous that they’ve got something wrong with them or a family member. And often they’ll just get brushed off. People are trying to get them off the phone as quickly as possible.”

While most call centers try to maximize volume of calls, representatives at BerylHealth are allowed to spend as much time as needed in order to answer callers’ questions and put them at ease. “Beryl is making money hand over fist, because they give that compassion-based service in a way that no other company in the marketplace does,” Jim told me. “And you see that integrated from top to bottom in that organization — the way they treat each other, the way they treat their suppliers and vendors and so on.”

The search for the right leaders

Corporate headhunters will tell you that a common reason many senior hires fail is because of poor cultural fit. That’s why screening leaders to ensure they have the right values is paramount, Jim said. “Finding leaders who start by expressing what their values are, and how they bring them into the workplace, is key when you’re looking for people to run your organization,” he said. “Obviously, you want the smartest people in the room, but more important, you want people congruent with your corporate values.”

The way to do this, Jim believes, is to have potential hires meet with people at every level of the organization. “The folks in the organization who are already part of the culture, who already understand the values, can be the ones to judge whether that person fits or not.”

Hire slow and fire fast is a mantra at many such companies. “When you bring in somebody, you want to spend a lot of time with them,” Jim said. “In the case of BerylHealth, you would ask, what does compassion mean to you, and how do you live it in your own life?

“When it comes to firing fast: if you see people operating outside your values, you need to move quickly to get them out of the organization, otherwise they can really become a toxin within the organizational culture.”

Placing values front and center

The same principle apples to people at all levels of the organization. Prospective hires should have an opportunity to get to know the company and see if their values are in alignment. “Talk to people at every level of the organization,” Jim said, “and essentially interview them about how those values are lived out.

“Ask about the performance appraisal process. Show me examples of people who have been promoted in this organization or given opportunities because they deliver performance in a values-driven way.”

It’s fine to post values on the wall, Jim said, but they should also be communicated across the organization every day. “It’s almost like a marketing campaign,” he told me. “You have to create materials to communicate those values. There has to be storytelling from senior leaders about how they’ve seen those values at work. You need to build the values into all your people practices, hiring and firing, promotions, performance appraisals and so on.

“When you’re talking about where you want to go as a company, what contribution you want to make, what new products and services you want to develop — you need to continually say, ‘Is this direction congruent with our values?’

“The same is true of your relationships with customers. You need to build those values into those relationships.”

How values help the bottom line

Jim cited studies showing that firms with a strong sense of purpose and core values outperform their industry peers. “I think that’s due to a few key factors,” he said. “When you’ve got a values-driven company, it builds credibility and trust in the marketplace, and when you’ve got that, people want to work with you.

“Second, it creates committed and engaged employees. People want to work for a firm where they’re treated with respect, care, and compassion, where there’s a lot of camaraderie and teamwork.

“Number three is high-quality customers. If you work with customers who are value-aligned it creates an upward spiral of momentum in terms of performance in the marketplace. And I think the fourth key factor is resilience and innovation. There’s a lot of research showing that values-driven companies are more resilient in economic downturns, and more innovative both in times of negative economy and times of abundance.”

Another advantage of being a values-driven company is sustainability over time. “If you just want explosive growth but don’t care about the long term, values don’t matter,” Jim said. “But if you want to last, then things like honesty and integrity and building community relations count. Because those are the kinds of companies others want to do business with over the long term.”

Not only are good values good for business, but thanks to the internet, it’s become harder than ever for companies to hide ethical lapses.

“It does catch up to companies,” Jim said. “And that loss of reputation in the marketplace begins to erode our trust in business.”

Advice for leaders

If Jim could offer one piece of advice to leaders who want to become more values-driven, what would it be?

“Know your own core values,” Jim said, “and then go out into the world and live those values to the fullest.”

Not that it’s always easy. “There are going to be times when it feels like those values aren’t honored in a particular job or context,” Jim told me. “There will be times when you want to let go of some of those values.

“But have courage, have persistence, and continue forward. If you live from a values-driven perspective, you will flourish because you’re operating from your strengths,” he said. “You’re operating from the source that gives you energy, excitement, creativity, and power.”