Five steps to the Golden Thread
Imagine that you are holding a glittering golden thread between your fingers; it’s precious, valuable, flexible but also fragile.
I am going to explain why I believe a golden thread is essential to hold together the purpose, values, strategy and culture (PVS-C) of an organisation – the subject of last month’s blog post. I’ll also take you through the five steps you need to take to keep that golden thread in place.
A golden thread would be a precious and valuable item. I use that analogy because I believe that bringing together the purpose, values, strategy and culture of our organisation is something we should prize. Getting it wrong would be very expensive, not just in financial terms but also in terms of reputation and morale.
Those four components – our PVS-C, as I call it – cannot be tied too tightly, because they all need to work individually but we do want them to be held together. They are fundamental to our success.
A thread can be easily broken, and so can our journey to success, growth and quality. Get your organisation’s values wrong, or fail to live by them, and the culture starts to change for the worse. Forget who you are and how you are going to achieve what you want and things can swiftly deteriorate.
So, let’s look at the first of the five steps that can get us to an ideal situation, our golden thread, and the role a board member plays.
A vision statement is a picture of the future; it shows what our organisation wants to become. It communicates an organisation’s aspirations at the highest level.
We need a vision statement because the people in our organisation need to know where they are going and, more importantly, how they fit into that vision.
Let’s look again at online retailer Zappos, featured in last month’s blog post when we looked at its purpose statement, its values and its culture. Its vision is ‘Delivering happiness to customers, employees, and vendors’. Everyone who works at Zappos, at any level, understands what the business is trying to do.
A vision statement, which captures an ambitious image of the future, comes from the Alzheimer’s Association: ‘Our vision is a world without Alzheimer’s disease’.
Google’s vision statement is, ‘To organise the world’s information and make it universally accessible and useful’.
A well-articulated vision statement makes it easier for board members, employees and stakeholders to buy-in to the journey the organisation is making and see where they fit in.
A mission statement covers the ‘who’, ‘what’ and ‘how’ of the organisation, It describes the impact the organisation has on the lives of customers and stakeholders, but also communicates aspirations for them at the highest level.
Zappos says it is on a mission to, ‘provide the best customer service possible. Deliver WOW through service’. This statement emphasises how important the level of service the company provides is to its brand. The company’s target is to deliver nothing less than top-quality all the time.
For people to get the golden thread right, they need to understand what we are trying to do for our customers or clients. Then, they need to see how they fit into the vision and finally they want to be able to make a difference. This is a major motivator for people. They like to feel they are ‘in’ on things and not being excluded or side-lined. They want to be kept informed and recognised for their achievements. This leads us on to the importance of securing ‘buy-in’.
When we start to work with employees and other stakeholders, we sometimes start by telling them things. We think that is engagement, but it’s not, that’s just the starting point sometimes in the engagement process.
If we get a bit better we might ask our people questions and think THAT is engagement. But it’s not if we don’t do anything with the answers; that’s really just a tick box-exercise.
The third and best level to securing buy-in is to consult and act on what we hear. Real engagement is only achieved when communication is genuinely two-way. Board members can then reflect on what is discovered and consider questions such as , ‘How is this going to impact the vision?’; ‘How can I track a decision at employee level right back to something we’ve done in the boardroom?’; ‘How can I track opinions and ideas to inform the strategy we are going to employ?’
I was once the chair of a business group. Over 10 years I experienced a changing relationship with our local Business Link organisation as its strategy altered and successive governments changed their funding policies.
When we first started out as a group, I remember feeling privileged just to be recognised and asked for our opinions. As time went on, and we realised that the Business Link was attracting funding based on our needs, we demanded to be consulted and we felt good when we achieved that. It satisfied our needs as a community of businesses.
As we matured as an organisation, we found that we could also bid directly for funds. Now, consultation was not enough. We wanted to be engaged and influence the process of applying for funds and see our needs being reflected as part of a collaborative effort.
Before the demise of the Business Link, we got to a place where there was real ‘buy-in’ because of the process of collaboration.
In the workplace we need to adopt similar practices with our people. We need to actively listen, engage before decisions are made and ensure that people feel that they are part of the process of strategy development and visioning – because they actually are!
This step is all about having integrity. There’s an ancient phrase, which appears in various forms in management books, which says a fish rots from the head down. This means that as leaders we have to practice what we preach.
If you want the golden thread to stay in place, we have to develop trust with all employees and stakeholders. An essential part of this is that we have to ‘walk the walk’ as well as ‘talk the talk’. We have to be seen to be living by the values we have set and committing to the vision and mission of our organisation.
We need to check that all the work we have done on our vision and mission and values is contributing to our strategic objectives. If, as a board member, I am sent a report on an area that doesn’t fit into our strategic objectives I would ask why is it being presented and why we are investing time to talk about it.
The last step is governance. I have said before that our values act as a behavioural compass. Well, to achieve good governance and effective leadership we need the right policies in place to act as a framework for consistency and fairness.
People must be able to speak out, or whistle-blow, when they see things going wrong, without fear of being punished. A culture of burying bad news and bad practice leads to disaster and good governance and strong leadership can prevent this. We should trust our employees, something we saw in the previous blog post that Brazilian businessman Ricardo Semler has done – to the extreme.
Reward should always be based on performance and achieving targets that line up with our strategic objectives. Governance will bring this all together so we must ensure that we have the right policy framework, the right engagement framework and the right authority framework.
In an article called The “Old” Board Governance Model Needs to Change, published in February 2020, Michael Volkov wrote: “A broad definition of corporate purpose can involve numerous objectives – profits, competitive gains, attracting a productive workforce, avoiding or reducing environmental harms from operations, increasing prosperity to benefit the community, and establishing a reputation as an ethical and responsible corporate citizen. To this end, corporate board members have to acknowledge the new set of expectations from shareholders, employees, customers, suppliers, communities and government entities. Such a perspective will quickly identify important issues on a variety of social topics: climate change, wealth inequality, wages, training, healthcare and retirement, supply chain performance and avoidance of trafficking, slavery and child labour. Working with management, the board has to identify stakeholder interests, measure the corporate impact or performance in these areas, and prioritise objectives and measurement of performance on an ongoing basis.”
So, we should be mindful of the fact that corporate decision-making is changing and multiple stakeholders – which include employees, shareholders, suppliers, clients and the general public – have more concerns than just profits. We ignore them at our peril.
Successful companies and organisations live by their values and inspire and motivate stakeholders by giving back to the community, delivering genuine engagement, achieving buy-in to the purpose, vision and mission of the organisation and ensuring that they understand their role in delivering it.
Let’s make sure our golden thread stays in place.
Until next month !