What Is It That You Believe In?

In the course of working with and advising business owners and leaders, I have observed that the organizations that are the most successful over the long run are the ones that have a strong focus.

This focus is a result of taking the time to define the company by a set of values.

As I have outlined in my last two columns, it is easy for leaders to get off track, ignoring the very reasons why they have hold a position of trust. These leaders often serve poorly those that should be served much better.

Having values does four essential things for the organization and the people in it. First, when the values are written down and publicized, it gives everyone a sense of purpose.

Second, having values helps individuals and the organization avoid making bad choices.

Third, when values are clear, and understood, it provides confidence to all.

Finally, defining values makes life and business simpler.

Last week I mentioned that having values makes things clear; eliminating doubt about which is the best way to behave and act. I referred to this as eliminating gray areas when everything should be black and white, leaving no room for doubt.

I was always intrigued by Hewlett-Packard (HP) and the “buzz” that surrounded the company. The business was launched in a garage. The two founders decided, long before they hired their first employee, what kind of organization they wanted.

Those principles, those values, survive today in five short sentences in what is called “The HP Way.”

“We have trust and respect for individuals. We focus on a high level of achievement and contribution. We conduct our business with uncompromising integrity. We achieve our common objectives through teamwork. We encourage flexibility and innovation.”

It’s just 36 words, but powerful words they are, taking those two men from a startup in a garage to a Fortune 500 firm.

HP has experienced considerable turmoil over the course of the last decade, primarily in executive management, strategy and execution.

In 2002 HP merged with Compaq Computers. The merger did not yield the expected results.

Additional acquisitions over the next ten years added revenue but integrations did not always yield targeted profit results.

In 2004 and 2005, there was considerable friction on the Board of Directors between different factions, resulting in the resignation of the CEO and Board Chair, along with several other directors.

In 2010, CEO Mark Hurd resigned after an inquiry into his expense reports related to a relationship with an independent contractor.

Hurd’s successor, Leo Apotheker, generated a strong reaction from Oracle CEO Larry Ellison, who complained that Apotheker had been in charge of SAP when one of its subsidiaries was systematically stealing software from Oracle. SAP accepted that its subsidiary, now closed,
illegally accessed Oracle intellectual property.

My take is that the entire time Apotheker was CEO at HP he operated under some sort of cloud about his ethics.

On September 22, 2011, HP named former eBay CEO Meg Whitman as president and CEO.

HP has not done so well financially. The turnover at the CEO and executive management levels has been excessive. Strategies have been set and continually changed. The stock price is down more than 66% over the last three years.

On February 21, CEO Whitman stated, “The patient showed some improvement,” referring to first quarter results of the company’s fiscal year. The company did not state there would be any layoffs, closings or write-offs as had been announced many times before.

The CFO said that the results reported likely represented the floor for HP and that moving forward, business was likely to improve. That remains to be seen.

But there is one thing I believe to be true about HP: without those core values outlined in The HP way, this Fortune 500 firm might well have gone the way of many companies that experienced the same turbulence: a sell off and eventual shutdown.

It’s easy to ignore the need for core values in any organization; those words and sentences might not really mean anything at all. That depends solely on leadership.

But in the dark days and nights facing tough decisions and an uncertain future, it makes good sense to have a solid foundation of what the company actually stands for.

The question is: what do you believe in and does everyone around you know what that is?