With the proliferation of social media, reputation issues have become 'the new normal' for most businesses. This is especially true today when mass media are in direct competition with the Facebook and negative social media hype is well on its to take its place among business’ crisis triggers. However, the reputation a company ends up with is merely the consequence of the decisions it makes through the years of operations. To put it simply, a crisis today is a fruit of the poor decisions and behaviors made earlier. But what drives different companies around the world to act improperly in very similar ways? Destructive values do.

The general line of thinking about corporate values is — they are a good thing to have, and a company with strong values is destined to succeed. But which values are the most effective for a business? Are real corporate values always ‘good’? Turns out, they are not. At least, not always.

We live in times of forced transparency when exposing any one of a company’s problems (or making one up for that matter) takes only a couple of clicks on the smartphone. From that moment on negative information spreads like a forest fire, regardless of how true it is. In such an era, corporate values that guide employee behavior play a decisive role in shaping corporate reputation. And if those values are destructive, destructive is the behavior they will produce.

To handle destructive values effectively, it helps to remember five simple rules.

Rule #1. Every value has a negative ‘flipside’.

According to Deloitte Global Survey on Reputation Risk 2017 data, 87% of top-managers rate reputation risk as the most important of as important as other strategic business risks. The logic here is clear: any business risk or incident results in reputation losses. The only difference is their scale — from leaked customer data to speaker snafus, rude employees, or poor product quality.

Consequently, to get ahead of its most probable crises, a company should analyze its existing values to determine what unacceptable and risky behavior they are most likely to trigger. Perfectionists tend to miss deadlines. Proactive forward thinkers often lack empathy. Extremely result-focused managers may sacrifice human relations to obtain the needed outcomes.

Rule #2. As long as destructive values persist, reputation problems are here to stay.

Even the most disturbing cases of employee error, lack of judgment, sabotage, or deliberate harmful actions can often be traced to the destructive values a company’s had for years, sometimes decades. Every unfortunate incident leading to financial and reputation losses stems from a corporate culture that allowed or helped to make it happen.

Take lying (or “stretching the truth”) for example. A commonly used tactic, unfortunately, especially in external communications — such as marketing, PR, and advertising. So what’s the harm – everyone knows marketing exaggerates things, right? Wrong. Lying, when encouraged or condoned, quickly becomes a part of a corporate culture which is very difficult to get rid of. Think about it, if management, legal, and accounting see marketing and PR people “stretching the truth” on regular basis, what is their reaction? They think lying is allowed, encouraged even – for a greater good, of course.

This slippery slope is a recipe for disaster and not only reputation-wise. Deloitte Global Survey on Reputation Risk 2017 states unethical behavior (55%), security (45%), and problems with products and services (43%) as top three drivers of reputation risks and financial losses associated with them. The moral here is — destructive employee behavior hurts the bottom line.

Rule #3. Business owners and management are key ‘carriers’ of corporate destructors.

Schwartz’ Basic Values Theory says that two sets of values guide our behavior: life values and work factors. Life values develop in our early childhood and by the time of the first job interview they have already firmly set in. We are talking here about honesty, integrity, responsibility and the like. These values remain relatively stable during our lifetime and require a great deal of distress to change, such as a war, a terminal illness, a deep personal tragedy, etc. This kind of stress is highly unlikely to happen in the workplace.

Work factors are less associated with moral qualities and more with professional ones, such as ambitiousness, professionalism, result-orientedness, service mindset, etc. These values can and should be cultivated through corporate motivation systems and culture. And top-managers are the key role models for employees to follow and emulate behaviors – both desired and destructive. In other words, if bosses do not ‘walk the talk’ when it comes to integrity, responsibility, openness to dialogue, and other productive values, the employees will absorb the values bosses really exhibit. More often than not in such a case, those values will be destructive.

Rule #4. Corporate culture can help destructive values to grow and spread.

According to the article by Daniel P. Skarlicki and Robert Folger in the Journal of Applied Psychology, there are aspects of corporate culture, which can indicate the presence of destructive values:

1. Hypercompetitive workforce.

2. Weak discipline and different ‘rules of the game’ for management and line staff.

3. Absence or lack of deep dialogue about mistakes and problems.

4. Excessive focus on quantitative and financial indicators in assessing, motivating, and promoting employees.

A company with such a culture will inevitably have problems with employee engagement and commitment since both these mechanisms work through manager-subordinate relations. If team members are unable to establish productive two-way dialogue and human relationship with their superior, their desire to improve and take initiative will eventually diminish.

And no matter how forward-thinking top-management is in terms of values and practices, if most lower level managers do not share the same approaches to work, it’s only a matter of time before a company turns into a ‘serpentarium’ of destructors. So much so that it oftentimes takes serious restructuring and major personnel changes to mitigate the consequences of the destructive corporate culture — such as tense customer and subcontractor relations, low morale and sabotage, poor service or product quality.

Rule #5. “Nothing personal, just business” no longer works.

Employee relationships with a superior are inherently an exchange process. Employees trade skills and expertise for salary and benefits. However, the nature of such an exchange determines workplace behavior. Mutual expectations and the perceived fairness of this exchange are called ‘psychological contract’ and serve as a filter through which employees evaluate the company’s decisions and actions.

Employees who believe their relations with a company to be unfair will try to ‘compensate’ for this unfairness in various ways — from absenteeism to sabotage, stealing, or apathy towards their work.

At a company with the following psychological contract elements (transactional), employees are at risk of engaging in destructive behaviors:

1. The exchange is mainly ‘economic’ and remains strictly within a job description.

2. Money is the key measure of employee success.

3. Employees are viewed as an expendable resource.

4. Management is a privileged group with more ‘leeway’ in terms of behavior than their subordinates.

Such a ‘contract’ is merely an exchange with little or no personal relationship and identification between a subordinate and a superior. In such a relationship, company interests are likely to come second after employees’ personal interests.

At a company with the following psychological contract elements (relational), employees are more prone to productive behaviors:

1. Constructive communication and interaction.

2. Regular dialogue.

3. Employees are viewed and treated as contributors to a common goal.

4. Management openly discusses mistakes, problems, and lessons learned, including their own.

Such a ‘contract’ extends the relationship between a superior and a subordinate beyond job descriptions and helps focus on the desired results, which all parties involved view as important. In such a relationship, employees are prepared to temporarily forego personal interests in favor of the company’s.

The Deloitte Millennial Survey 2018 says that employees younger than 35 years believe corporate values and treatment of employees are as important when considering a job offer as compensation.

So, what should a top-manager do if destructive values are present or are likely to emerge at the company?

Determine the reasons and the role models — who at the company gave an example of destructive behavior and why it took hold.
Analyze the existing business processes and motivation systems – whether and to what extent they encourage destructive behavior.
Determine, jointly with company management team, the existing destructors and their specific effect on business.
For every destructive value, find a constructive ‘flipside’: aggression — ambition, obnoxiousness – directedness, perfectionism — focus on quality, etc.
Determine the changes needed to steer destructive behaviors in a constructive direction, so that eventually destructive behavior ceases.
If necessary, adjust processes and procedures that stimulate or support destructive behavior.

Marina Starodubska, TLFRD