Reinvent your firm, not your values
Reinvent!
Every manager is supposed be doing that these days. You know, there’s a lot more risk in reinvention than just the uncertainty of your fancy new business model. In your rush to reinvent, you could well leave your core values behind.
I’ve been contemplating this lately for several reasons. For one, I’m sold on the wisdom of Jim Collins, the management guru who was part of a recent Fortune cover package in the February 2 issue. Collins ID’s why companies like Procter & Gamble (PG) and IBM (IBM) perform well in the downturn: “What we have found is that what really matters is that you actually have core values–not what they are. The more challenged you are, the more you have to have your values. You need to preserve them consistently over time.”
And then there’s ad maestro Roy Spence, who wrote the latest Guest Post here on Postcards and contends that “purpose” is the secret of long-lasting greatness for two companies he’s worked with closely over the decades. From its start, Southwest Airlines (LUV) has been in the “freedom business” of democratizing the skies with low-cost fares, Spence explains. He remembers the day when Sam Walton, Wal-Mart’s (WMT) founder, first uttered the purpose of his retail startup: “At Wal-Mart, we are in business to save people money so they can live better,” Sam said. (For the latest scoop on the world’s largest retailer, read my colleague Suzanne Kapner’s Wal-Mart feature in Fortune’s current issue.)
“Values” and “purpose” are a lot like the “character of the company.” That’s a phrase that Howard Schultz, the founder of Starbucks (SBUX) suggested to eBay (EBAY) when he was on that company’s board of directors several years ago. Meg Whitman, then eBay’s CEO, created a class, in fact, called “Character of the Company” to teach new employees core values.
I saw Whitman last week on stage, talking to MBA students at the Drucker School of Management at California’s Claremont University. “What kind of a company do you want to run? You have to know what the code of behavior is early on,” she told the students. Granted, both eBay and Starbucks have hit the wall on growth lately and are struggling to reinvent themselves. But I think Whitman and Collins and Spence are right: If you know your core values–your purpose, the character of your company–at least you have a compass to direct you.
Whitman, as you may have heard, is doing a little reinventing herself these days, running for governor of California. She left the students with this advice about making tough decisions in any situation: “If you’re making a decision, think about having your mother in the room–or your husband or your son or your daughter. Would you be proud to have them watch? Or would you be proud to have that decision on the front page of the New York Times? If not, it’s probably not the right thing to do.”
Speaking of Starbucks, they just announced that they will offer instant coffee. How’s that for a change of their core values? Someone forgot to tell them that they’re supposed to be embracing the idea of fresh, artisanal coffee that would never, ever deign to dip its market share anywhere near instant anything.
You have got to be kidding me? Meg Whitman with Values? She cut customer service on eBay for the only reason to increase profit but left the customers with no place to go to resolve issues with in the site, earning eBay the reputation today for scamming & transaction issues (ask anybody if they have been scammed on eBay? I’d bet my bottom penny that if they haven’t they will know somebody who did .. thanks meg) … Values? the only reason for the cut was to give the stock holders a fatter bottom line .. What values are the most important? She approved of laying off 1500+ of their best & brightest employees to fatten the bottom line again because these people could be replaced by cheaper workers? Many of these workers have been there since the beginning of eBay? at a time of crisis in the country .. This is at a time while eBay is setting on huge CASH reserves? .. So what values are we practicing here? the rumor of eBays huge cash reserve is another questionable value, where is it at? The cash is earned mostly in the USA but yet it is being held on off shore accounts to avoid taxation? this can be read in their own quarterly reports 3rd qtr .. Great values they are practicing there … You have to ask yourself, eBay has NO INVENTORY to deal with Has no big assetts but yet they treat their bread & butter sellers of whom they milk every penny that goes through eBay like 2nd class citizens, so I guess if you are just talking the values of how to max out every last penny for the stock holders then she’s your gal, but if you want to earn the trust & respect of the actual people who actually paid every penny she was given (notice I didn’t confuse you with earned, by her own admission she said a monkey could drive this bus) well then at best it is very questionable .. eBay grew at a greater rate before she got there, then declined? some goes to saturation, but try to find a happy eBay seller these days, good luck .. she is a good talker & BS artist but as far as creating core values, watch out & learn from what she practices, not what she has preached .. she took eBay from a quickly blooming rising star to a business that is faltering at best with its sellers grumbling & complaining on every blog with in their reach .. I guess its what side of the coin your on, if your a stock holder then she will be good for you, If your the person in the trenches turning the company wheel then she will drain you for your last drop of blood .. the shame is, if you keep the guys in the trenches happy that are turning the wheel, then the business will have a stronger foundation, happier more productive drones & then the stock holders will make more $$ with out trickery & manipulation .. Its not the chiicken or the egg issue here, Its real values that are needed here not Megs values .. Allan Kraig
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Patricia Sellers has written some of Fortune's most talked-about cover stories, including "Can Meg Whitman Save California?", Melinda Gates ("The $100 Billion Woman"), "MySpace Cowboys," Martha Stewart ("I cannot be destroyed"), Ted Turner ("Gone with the Wind") and Oprah Winfrey ("Oprah Inc."). And she has broken ground with insightful pieces on career management issues such as ego ("Get Over Yourself!"), and "Charisma: Do You Need It? Can You Get It?" Pattie chairs the annual Fortune Most Powerful Women Summit, the preeminent gathering of women leaders in business, philanthropy, government, academia, and the arts. And she has helped oversee Fortune's "Most Powerful Women in Business" cover package since its launch in 1998. She started at Fortune in 1984, covering the big consumer brand companies.
Hi Kevin, we’ve tasted Starbucks VIA instant coffee and thought it was pretty good (and I’ve read other reviews online that agree).
You can read our take here: http://postcards.blogs.fortune.cnn.com/2009/02/17/starbucks-goes-instant/
I understand your skepticism but you know what they say, don’t knock it til you try it. You can buy online from starbucksvia.com starting in March 3 (or pre-order now).