Saturday, November 29, 2014

Three Ps in Corporate Value

Corporate value, as a component of the strategy, is built on 3 Ps: Purpose, Passion, and Principle. 

Corporate value is not just an abstract or oxymoron, but a multi-dimensional concept, from economic value, quality value to brand value or social value. Values are a component of Strategy, not the entire strategy, though. Strategy, in its entirety, must be at the center, and it is built on what being called the "three P's" of Purpose, Passion, and Principle. 

Purpose: You must understand underlying meaning behind the organization. Why do you exist? What do you hope to accomplish? How does this purpose create value for your customers? Your partners?  Your employees? Your shareholders? The "fundamental reason for being" is the purpose of the organization. Does it inspire? Is it something you, and your team, can and embrace wholeheartedly? The crucial next step is to define corporate goals in line with these values – and share them with everyone in the organization. Everyone needs to believe in these goals and agree that they are worthwhile. Alignment of values and goals ensures genuine buy-in, emotional as well as cognitive. Clear, well expressed inspirational goals also help to define *what* we need to do to achieve those goals and *how* we are going to do it. Our high-level business goals and their relative importance will determine the appropriate sub-goals in every area – and help us to plan the projects to achieve them (with roles and responsibilities, timescales, etc).

Passion: This is a critical component in that the members of your organization must have a passion for what they are doing. This requires a clearly defined and inspiring purpose, but it also requires extending that purpose into the 'real world' with a vision that everyone is on board with. If the vision isn't connected to the purpose, your team will lack direction, lack enthusiasm, lack passion! Values are essential as part of the leadership formula: Do what you say and say what you do. No "say-do" gap. The core values affect everything we do (at work and everywhere else) and how we do it. In a business, all the principals must have similar core values: they do not need to be *identical,* but if there are major differences in key areas, they will inevitably cause conflict.

Principle: We all have principles (values) whether we realize it or not. If you don't define the values that your organization will be run by and clearly communicate them to your team, then the organization will be operated in accordance with the values de jour. In other words, the pressure of a given situation will determine what is to be done, and how it will be done, rather than a clearly defined sense of right or wrong. Your sales staff may cheat customers to close the deal. Your management team may cheat on you to keep you "happy" and off their backs. Your accountant may hide the bad numbers from you, so you don't get upset. If you don't want stress and pressure defining the values (principles) of your organization, you'd better define them up front and communicated them often. 

Corporate culture is collective value in the business. Culture is also a source of competitive advantage for a company to have with a very special characteristic. It is unique, no one can imitate it. It´s just simply what you are, it is your soul. Our values aren't something that we DO. It's what we ARE. Our values are manifested in the way we conduct meetings in the boardroom, the way we treat our employees, speak to the barista at the coffee shop. Values are not a set of behaviors we put on like clothing. They are the driving forces behind everything we do and everything we say. Values aren't behaviors. Our behaviors are reflections of what we truly value in any given situation in relation to what we say we value. The gap, when it exists, is observable by anyone who is paying attention. 

Hence, corporate value or purpose is not just an abstract word or oxymoron, in fact,  the center of the organization should be occupied by a clear sense of purpose, a passion for pushing that purpose tangibly into the future, and strong principles that guide and direct how the passionate pursuit of purpose is performed. The "Three P's of Strategy" at the center of the organization. 


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