CHAPTER 2: SHARED VISION, VALUES, AND CULTURE

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Shared Vision, Values, and Culture

        Building, communicating, and maintaining

For a professional service firm, vision, values, and culture are really 99 percent of the equation.”
— Damien O’Brien, CEO, Egon Zehnder International

We place a lot of weight on shaping, nurturing, and enforcing our values and culture.”
— Bob Dell, Chairman and Managing Partner, Latham & Watkins

If you don’t get this stuff right, you might as well forget the rest of it. You are going to be just another organization.”
— Peter Stringham, CEO, Young & Rubicam Brands

Revitalizing Vision, Values, and Culture

Even great cultures and values need revitalization and modernization.”

Most successful professional service firms continue to embody the spirit of their original founders. However, the world does change, and many firms periodically review and fine-tune their vision, values, and culture. The goal is to ensure that their core principles and operating style continue to reflect both the evolution of their partnerships and changing client needs. In many cases, this refreshment process in and of itself is seen as a powerful way to revitalize partner commitment and attract new talent.

Such renewal initiatives usually are driven by some inflection point within the firm or a disruption or change in the competitive landscape or in the marketplace. Traditional ways of working may become obsolete, and significant changes to governance, services, and culture are required to ensure continued viability. Intense mergers and acquisitions (M&A) activity over a prolonged period may result in cultural misalignments that require radical adjustment. Or, as frequently happens, growth surges and the drive to globalize may strain and dilute a firm’s existing culture.

A change in leadership often triggers an effort to reflect and refresh. When Mark Penn, the new CEO at public relations agency Burson-Marsteller, came on board in 2006, he launched a process to modernize the firm. As Richard Powell, Global COO, tells it, “Mark focused on saying, ‘OK, we know what’s the best of the old Burson, but what do we have to do to make it relevant in the 21st century?’" The firm, according to Powell, ended up combining the new with the best of the old.”

For public relations firm Edelman and law firm Latham & Watkins, the growing impact of globalization drove the refresh discussion. According to Latham & Watkins’ Chairman and Managing Partner Bob Dell, in 1999–2000, the firm partners had to decide to “face the fork in the road” — to either solidify and reconfirm its vision to be the best law firm in the U.S., or to shift to a global perspective. During about the same time period, Edelman set out to expand its U.S.-centric focus to incorporate a worldwide perspective (see “Edelman Revisits Vision and Values”).

The Enron scandal and the subsequent dismantling of Arthur Andersen were a catalyst for tremendous introspection and reevaluation within the accounting profession. It was an extremely turbulent time. The Big Four and others in the industry were forced simultaneously to examine their fundamental business goals, scramble to acquire pieces of Andersen’s global business, and absorb former Andersen partners into their firms.

Executive search firm Egon Zehnder International faced three significant disruptions when it launched a firm-wide evaluation in 2001. Egon Zehnder, the firm’s founder, had recently retired after 36 years. Two of the firm’s major competitors went public, which changed the dynamics around equity and compensation. And, the Internet was rapidly becoming an important tool and competitive advantage in the recruiting business. As CEO Damien O’Brien recalled, “The firm was unsettled, and there was a concern that the leadership had their head in the sand and hadn’t really acknowledged that the world was changing so dramatically.”

Driven by the same evolving industry dynamics in the executive search business, Korn/Ferry International began a multiple-year journey to broaden its business from an exclusive focus on search work to a more full-service talent management organization. The process involved systemic change to much of the firm’s core structures and a shift in values and culture (see “Korn/Ferry Changes Its Vision and Culture”).

Whatever the trigger, the process that firms undertake to revisit their fundamentals is typically intense, involving the entire firm and an enormous amount of management time. Collaboration and consensus are important components, and many leaders agree that the process of coming together to establish or reaffirm the vision and values is often as important as the result. It is an opportunity to unite and focus the organization on a common path.

Such renewal efforts are both invigorating and uncomfortable. At their most effective, they can push a firm to new levels of performance and client service. Although each firm has its own signature operating style, an initiative to revisit a firm’s core values and path typically includes five major components, as shown in Exhibit 2.4:

Solicit feedback. In general, a renewal program is kicked off by taking the firm’s organizational temperature — soliciting internal views on what works and what doesn’t. Every aspect of an organization, from values and operating style to branding and marketplace perceptions, may be scrutinized. A vision-and-values inventory in some form is frequently conducted to uncover aspirational goals that partners would like to see the firm embrace. Such goals might include creating a more positive work environment, taking on new types of clients or assignments, building a global brand, or sharing intellectual capital more effectively. Some firms expand this feedback process to include selected clients.

Envision success. This often involves taking a blue-sky approach to reimagining a firm’s vision, values, and culture. What aspirational goals and challenges would excite and energize the partnership at this point in time? What values would provide a moral compass to help the firm navigate successfully and thrive while meeting emerging client needs? What innovative tools would the firm have to integrate into its arsenal to radically improve operating efficiency and boost service performance? What changes in its work environment would foster greater partner satisfaction and collegiality — and attract fresh, committed talent? Creating a values statement that reflects widely embraced answers to questions like these can provide a rallying point for employees at all levels and a helpful touchstone when the transformation process encounters obstacles, as it inevitably will.

Scope the required changes. Once the review process is completed, a small group of partners — or several subgroups — is mobilized to analyze partner suggestions and evaluate the degree and nature of the adjustments called for. Ultimately, the goal is to come up with a recommended slate of specific, practical improvements that can be made and tools that can be leveraged to achieve the desired results. Recommendations may vary from slight adjustments to values and culture such as committing to codifying and sharing knowledge more effectively or expanding community service activities, for example, to major organizational restructuring.

Map an action strategy. Using the results of the scoping process as guidelines, the partnership team spearheading the renewal effort maps out the action steps required to make recommended changes a reality. To be effective, the strategy must include assigned responsibilities and accountability for each task, significant milestones, and a process to track, measure, and reward achievements.

Promote buy-in. Once a potential renewal program has been mapped out, the next step generally involves taking it on the road to showcase it in face-to-face meetings and solicit a second round of feedback from partners. This helps ensure that the partnership as a whole feels that its responses and suggestions have been integrated into the action plan. It also sets the stage for buy-in around the renewal strategy and the investments required to push it forward.

Exhibit 2.4 Steps to renewing vision, values, and culture

Exhibit 2.4

Culture change is rooted in changes in behavior. To encourage the new behaviors you want, be sure that your rewards-and-recognition system reinforces them at all levels. Reassuring everyone that their contributions count invites them to think of themselves as creative change agents who matter. Treat change as the key to driving — not thriving and heightening performance — and as a journey rather than a destination. People must have a clear understanding of why change is required, what success will look like once transformation occurs, how it can potentially benefit them, and what is expected of them along the way. Vague, ambiguous mandates for change result in vague, ambiguous responses.