By: Kanter, Rosabeth Moss,
Harvard Business Review,
January 2008, Vol. 86, Issue 1
Companies such as IBM, Procter & Gamble, Omron, CEMEX, Cisco, and Banco Real are moving as rapidly and creatively as much smaller enterprises.
At Procter & Gamble, the values and standards captured in the company's statement of purpose, values, and principles (known as the PVP) enable managers in diverse locations to respond quickly and effectively to business opportunities or crises.
A strong, broadly internalized guidance system obviates the need for controls that stress obedience and instead promotes autonomy.
People are more inclined to be creative when their company's values stress innovation that helps the world. Banco Real, the Brazilian arm of a European bank, discovered this when it put social and environmental responsibility at the core of its search for differentiation. The result was a spate of new financial products, including consumer loans for green projects (such as converting autos or houses), microfinance for poor communities, and the first carbon credit trading in the region.
If values and standards served no other purpose in a company, they would still serve as motivational tools. They offer people a basis for engagement with their work, a sense of membership, and an anchor of stability in the midst of constant change.
Rosabeth Moss Kanter (email@example.com) is the Ernest L. Arbuckle Professor of Business Administration at Harvard Business School in Boston. Her latest book is America the Principled (Crown, 2007). She was the editor of HBR from 1989 to 1992.