The “Risk” of Values

ValuesAt the National Trust, we begin each executive team meeting with an example of our values in action. Discussing how our colleagues have exemplified our values of integrity, collaboration, diversity, and innovation – all focused on making a difference – is often my favorite part of the meeting.

National Trust Trustee emeritus Ken Woodcock was a consistent proponent of the importance of organizational values, an approach that came from his years at the energy company AES.  At Ken’s urging, I read Joy at Work by the highly unconventional AES co-founder and CEO Dennis Bakke, who spoke eloquently about the importance of values.  In one especially telling example, Bakke quoted from the company’s public-offering memo, which read in part:

“An important element of AES is its commitment to four major “shared” values:  to act with integrity, to be fair, to have fun, and to be socially responsible….AES believes that earning a fair profit is an important result of providing a quality product to its customers.  However, if the Company perceives a conflict between these values and profits, the Company will try and adhere to its values – even though doing so might result in diminished profits or foregone opportunities.  Moreover, the Company seeks to adhere to these values not as a means to achieve economic success, but because adherence is a worthwhile goal in and of itself.  The Company intends to continue these policies after this offering.”

Staffers at the Securities and Exchange Commission suggested that this paragraph should go into the section of the document entitled “Special Risk Factors.”  In other words, the SEC officials thought that values were a hazard!  As Bakke noted, he could now say that the U.S. government thought it was very risky to attempt to operate a business with integrity, fairness, social responsibility, and a sense of fun.  While AES certainly had its ups and downs though the years, the company is ongoing and these core values remain under the current leadership.

Bakke’s overall point about the importance of values is a good one:  We should attempt to live according to a set of unchanging shared ethical principles not because doing so might result in economic success to the individual or organization, but because it is the right way to live.

Have a good week.

More to come…

DJB

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