Values Cockpits

This is an ambidextrous book. At its core, it is interested in business practice and investigates how companies can use the values cockpit as a means of making themselves more competitive. Establishing a corporate culture that is securely grounded in certain values is one of the key value creation processes determining the future viability of any business in our economy. On this practical and pragmatic level, this book explains how companies can use a rational, unbiased instrument to tailor their value sets to match the unique qualities and nature of their organizations.

The English language version adds a new theoretical shell around its practice-oriented core. It frames the book’s subject of value-oriented management as part of something larger than the simply entrepreneurial wish to create and maintain a sustainably viable business. That shell engages with current ethical, ecological, and political discourse of what sustainability means for our economic order as a whole.

Considering these higher concerns, this book is trying to add to our understanding of how we can tackle the global problems that our economy’s belief in untrammelled and limitless growth has created. It is not (only) meant as a “create your own sustainable business” manual for managers, but as one possible answer to the question of how the future of all of us can be protected with such a self-sustained, self-responsible company.

Before beginning your journey through this book, consider the following three questions that every entrepreneur and executive will encounter at some point:

A company’s values tell us what the company stands for and what it produces, tangible or intangible, to survive in its business. They form a funnel that determines how the company perceives the world around it, which problems it recognizes, which solutions it finds, and which products or services it develops in response. If the values at work in the company are balanced well and if the company is managed in line with its values, commercial success, entrepreneurial excellence, and a unique and unmistakable presence are within reach. Values-oriented management tries to do just that: to balance the values that exist in the company in a coherent manner. It can measure the values by means of a dedicated values cockpit, tie them to specific conditions, and link them to a set of applied values as the frame of reference which forms the corporate culture. By organizing and managing this frame of reference, the values cockpit helps align individual and corporate actions and imbues the whole enterprise with a sense of focus and durability.

What distinguishes successful companies from their less successful counterparts? All companies enjoying above-average performance are known to have a dedicated corporate culture. It is sustained by a clear set of values that are maintained and applied in all areas at excellent companies—within and without. The means and tools offered by the values cockpit will now be explored with case studies drawn from current German and Austrian based business: HiPP GmbH & Co. Vertrieb KG, Hilti AG, Brauerei Gebrüder Maisel KG, dm-drogerie markt GmbH + Co. KG, and Pro Natur GmbH, who enjoy coherent corporate cultures that are constantly evolving and durable enough to survive any crisis. The interviews with the people at the helm of these companies, Professor Claus Hipp, Michael Hilti, Jeff Maisel, Erich Harsch, and Rudolf F. Schreiber, show that their companies consider the corporate culture as the key value creation process that precedes and governs all other processes. Values-oriented management and corporate social responsibility are two cornerstones of this value adding process.

The management of values is a value-creating process. We have seen how the values cockpit can help control this process in practice. What now needs to be done is to dig deeper and uncover the commercial mechanisms that make corporate values a seedbed for new commercial value. Before examining these mechanisms in detail, another look at the case studies is worthwhile. They seem to imply that values-oriented management is the natural reserve of owner-managed businesses, and that there are forces stopping listed companies from following suit. This assumption seems reinforced by the idea that listed companies differ from family-run businesses that think in terms of generations, in not years and quarters, in that they are caught in the straitjacket of ad-hoc reporting and decisions taken under duress and time pressures. This seems to prevent them from seeing the long-term perspective. This impression that many listed companies are forced into short-term ways of thinking and economic practice is also confirmed by the findings of Jim Collins. His studies gave impressive proof that truly excellent companies only manage to secure their dominance in the markets over the years because they have committed themselves in full to long-term goals and a long-term culture.

It is right to assume that owner-managed or family-run businesses are sustained by strong values simply by force of the long-termism inherent in their nature—think of the traditions and family values that many owner-managed companies like to herald, especially when selling branded goods, such as the associations of “smallholder farmers” who define their freedom in terms of family ownership and independence from corporate structures. It is, however, just as right to stress that all other companies are also powered by their own intrinsic values. Just like any social system, a company is the product of people coming together, sustained by a shared notion of certain values and their benefits. From this grows the specific systemic culture that forms the very being of the company.

Values affect and form all areas of the organization:

The logics of values: