The unprecedented technical, logistical, and financial stresses placed on organizations today make the coronavirus crisis a crucible for an organization’s commitment to its values. There’s not a company around—not even the ones doing well during this time, like Netflix or Zoom—that isn’t wrestling with the new reality of Covid-19. And clearly, the stress is exponentially worse for companies in industries like travel and leisure that aren’t thriving in the current environment.
But it’s these times of crisis that reveal a company’s true commitment to its stated values.
Toyota does. Two of Toyota’s values are “respect for people” and “kaizen.” In the Great Recession, when other auto companies were laying off workers, Toyota kept everyone on full salary, and had them come into the office and factories to continue practicing kaizen and problem solving. Even today, with Covid-19 forcing the company to shutter factories, there have been no layoffs.
Barry-Wehmiller does. The manufacturer of capital equipment, “measures success by the way we touch the lives of people.” Trust, respect, and teamwork are among the company’s core values. When the firm lost 30% of its orders overnight in 2008, the CEO asked everyone to take a month off without pay, rather than laying off one-third of the workforce. The company also suspended 401(k) contributions during the recession—but then gave back those contributions that they missed in 2009 and 2010 when the economy recovered. Since that time, he’s run the company very conservatively, so that they have the financial resources to withstand another shock. He’s also sharing the pain by cutting his own salary.
But not every company lives up to its values. The New York Times reports that some of the Business Roundtable companies that last year pledged to run their companies for the benefit of workers and communities, not just shareholders, have been, um, less than committed to that. Marriott, a member of the BRT, not only paid out $160 million in quarterly dividends this year, it requested a 7.7 percent salary increase for the chief executive, and a cash bonus of up to 200 percent—all while furloughing most of its workforce.
Similarly, Amazon (which compared to the rest of the economy is doing quite well these days—stock price up 20% since the beginning of February), has been accused by its employees of not taking sufficient care of them during the Covid-19 outbreak. On March 30, workers at an Amazon warehouse in NY walked off the job, and Whole Foods staff called a sickout on the same day. Workers argued that the company failed to provide sufficient protective gear like masks and hand sanitizers, exposing them to the virus.
Jim Collins wrote that an organization’s core values
are the essential and enduring tenets of an organization. . . . A great company decides for itself what values it holds to be core, largely independent of the current environment, competitive requirements, or management fads. . . . Core values require no external justification; they have intrinsic value and importance to those inside the organization. . . . A company should not change its core values in response to market changes; rather, it should change markets, if necessary, to remain true to its core values. Would you want to hold those core values, even if at some point one or more of them became a competitive disadvantage?
The current crisis is putting organizations’ values to the test. Committing to all stakeholders, not just shareholders, during this time is logistically challenging and terribly expensive. But talk is cheap—and so is the paper on which companies print their core values.
Does your company live up to its professed values?