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Sustainable Brands – Culture Building Richard Barrett
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Powerful metrics that enable leaders to measure and manage cultures.
www.valuescentre.com
2
CULTURE AND BRAND ARE TWO SIDES OF THE SAME COIN
Employee Perspective Customer Perspective
Who you are on the inside, looks a lot like who you are on the outside
CULTURE BRAND
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Powerful metrics that enable leaders to measure and manage cultures.
www.valuescentre.com
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THE BIG MESSAGE
IF YOU WANT TO BUILD A SUSTAINABLE BRAND THEN
YOU NEED TO BUILD A VALUES-DRIVEN CULTURE.
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Powerful metrics that enable leaders to measure and manage cultures.
www.valuescentre.com
4
MY SPEECH TODAY
HOW TO BUILD, MEASURE AND MANAGE A VALUES-DRIVEN CULTURE
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Powerful metrics that enable leaders to measure and manage cultures.
www.valuescentre.com
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Available in July 2014
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Powerful metrics that enable leaders to measure and manage cultures.
www.valuescentre.com
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Richard Barrett has made extraordinary contributions to our understanding of organisational values and culture. His frameworks for measuring culture and enabling whole system change are elegant. His reservoir of knowledge is vast and his connection to timeless wisdom is profound. Raj Sisodia Co-founder and co-chairman of Conscious Capitalism Inc. and Professor of Marketing at Bentley University
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Powerful metrics that enable leaders to measure and manage cultures.
www.valuescentre.com
7
THE BIG QUESTION WHY ARE VALUES-DRIVEN ORGANISATIONS THE MOST SUCCESSFUL SUSTAINABLE ORGANISATIONS ON THE PLANET?
WHAT DO THEY FOCUS ON? WHAT MAKES THEM SUCCESSFUL?
THEY CARE ABOUT THE NEEDS OF THEIR PEOPLE
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Powerful metrics that enable leaders to measure and manage cultures.
www.valuescentre.com
8
S&P 500
Average Annualized Return
16.39%
Average Annualized Return
4.12%
BCWF
The Best Companies to Work For engender high levels of employee engagement and commitment, because the leaders of these organisations focus on meeting employee’s basic needs and satisfying their growth needs: they focus on helping their employees feel happy and find meaning in their work.
The Top 40 Best Companies to Work For (USA)
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Powerful metrics that enable leaders to measure and manage cultures.
www.valuescentre.com
9
The Top 40 Best Companies to Work For (USA)
Adobe Systems Inc.
Adobe Systems Inc.
Aflac Inc.
Amazon.com Inc.
American Express Co.
Autodesk Inc.
Build-A-Bear Workshop Inc.
Capital Trust Inc. Class A.
Chesapeake Energy Corp.
Devon Energy Corp.
Dreamworks Animation SKG
Inc.
EOG Resources
FactSet Research Systems Inc.
General Mills Inc.
Goldman Sachs Group Inc.
Goldman Sachs Group Inc.
Google Inc. Class A.
Hasbro, Inc.
Intel Corp.
Intuit Inc.
Marriott International Inc.
Mattel Inc.
Medical Properties Trust Inc.
Men’s Wearhouse
Microsoft Corp.
National Instruments Corp.
NetApp Inc.
Nordstrom Inc.
Novo Nordisk, A/S ADR
Novo Nordisk, A/S ADR
Nustar Energy, L.P.
Publix Super Mkts, Inc.
Qualcomm Inc.
Rackspace Hosting Inc.
Salesforce.com Inc.
Southern Michigan Bankcorp.
St Jude Medical, Inc.
Starbucks Corporation
Stryker Corporation
SVB Financial Group
Ultimate Software Group, Inc.
Umpqua Holdings Corporation
Whole Food Markets, Inc.
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GtG Average Annualized Return
5.32%
S&P 500 Average Annualized Return
4.12%
$60m
$100m
$140m
$180m
Po
rtfo
lio V
alu
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2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
20m
The 10 Good to Great Companies (Jim Collins)
The seven characteristics Collins identified in the so-called Good to Great companies, on their own, are not sufficient for long-term success. Focusing on the needs of your employees
and the culture of the company are more important.
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11
Abbott Laboratories
Abbott Laboratories
*Circuit City
**Fannie Mae
Gillette Company
Kimberly-Clark
Kimberley-Clark
Kroger Co.
Nucor Corp.
Philip Morris International Inc.
Pitney Bowes Inc.
Pitney Bowes Inc.
Walgreen Company
***Wells Fargo & Co.
* No longer trading. ** Involved in a home mortgage scandal. *** Received $25 billion bailout from the Troubled Asset Relief Program (TARP) as part of the United States government’s response to the subprime mortgage crisis of 2008.
The 10 Good to Great Companies
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Powerful metrics that enable leaders to measure and manage cultures.
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“Culture eats strategy for breakfast.”
“No matter how far reaching the vision or how brilliant the strategy, neither will be realized if it is not supported
by the organisational culture.” Luther Johnson
Peter Drucker
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Powerful metrics that enable leaders to measure and manage cultures.
www.valuescentre.com
13
THE DIFFERENCE BETWEEN THE BEST COMPANIES TO WORK FOR AND OTHER COMPANIES IS THE LEADERS CARE ABOUT
THE NEEDS OF THEIR EMPLOYEES:
THEY CARE ABOUT WHAT THEIR EMPLOYEES VALUE
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Leadership, Values and Excellence
Peters and Waterman, “In Search of Excellence: Lessons from America’s best run companies”, 1983
Clarifying the value system and breathing life into it are the greatest
contributions a leader can make.
Tom Peters
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Powerful metrics that enable leaders to measure and manage cultures.
www.valuescentre.com
15
AT ANY GIVEN MOMENT IN TIME, the
values that are most important to us are a the needs of the stage of psychological development we have reached and the unmet needs of the stages of psychological development we have passed through but haven not yet mastered. Our needs (what we value) have always been, and always will be the principal drivers of our behaviors and actions.
What motivates employees is the satisfaction of their needs.
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Powerful metrics that enable leaders to measure and manage cultures.
www.valuescentre.com
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Stages of Psychological Development
Surviving: Staying alive and healthy in the best possible conditions.
Conforming: Keeping safe and secure by staying loyal to your family, kin and culture.
Differentiating: Distinguishing yourself from the crowd by honing your skills and talents.
Individuating: Letting go of the aspects of your parental and cultural conditioning that no longer serve you.
Self-actualizing: Becoming more fully who you are by leading a values- and purpose-driven life.
Integrating: Aligning with others who share the same values and purpose to create a better world.
Serving: Fulfilling your destiny by caring for the well-being of humanity and/or the planet.
Evo
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of
Pers
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Powerful metrics that enable leaders to measure and manage cultures.
www.valuescentre.com
17
Stages of Psychological Development
Surviving: Staying alive and healthy in the best possible conditions.
Conforming: Keeping safe and secure by staying loyal to your family, kin and culture.
Differentiating: Distinguishing yourself from the crowd by honing your skills and talents.
Individuating: Letting go of the aspects of your parental and cultural conditioning that no longer serve you.
Self-actualizing: Becoming more fully who you are by leading a values- and purpose-driven life.
Integrating: Aligning with others who share the same values and purpose to create a better world.
Serving: Fulfilling your destiny by caring for the well-being of humanity and/or the planet.
Evo
luti
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of
Pers
on
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on
scio
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Powerful metrics that enable leaders to measure and manage cultures.
www.valuescentre.com
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Stages of Psychological Development
Surviving: Staying alive and healthy in the best possible conditions.
Conforming: Keeping safe and secure by staying loyal to your family, kin and culture.
Differentiating: Distinguishing yourself from the crowd by honing your skills and talents.
Individuating: Letting go of the aspects of your parental and cultural conditioning that no longer serve you.
Self-actualizing: Becoming more fully who you are by leading a values- and purpose-driven life.
Integrating: Aligning with others who share the same values and purpose to create a better world.
Serving: Fulfilling your destiny by caring for the well-being of humanity and/or the planet.
Evo
luti
on
of
Pers
on
al C
on
scio
usn
ess
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Powerful metrics that enable leaders to measure and manage cultures.
www.valuescentre.com
19
Stages of Psychological Development
Surviving: Staying alive and healthy in the best possible conditions.
Conforming: Keeping safe and secure by staying loyal to your family, kin and culture.
Differentiating: Distinguishing yourself from the crowd by honing your skills and talents.
Individuating: Letting go of the aspects of your parental and cultural conditioning that no longer serve you.
Self-actualizing: Becoming more fully who you are by leading a values- and purpose-driven life.
Integrating: Aligning with others who share the same values and purpose to create a better world.
Serving: Fulfilling your destiny by caring for the well-being of humanity and/or the planet.
Evo
luti
on
of
Pers
on
al C
on
scio
usn
ess
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Powerful metrics that enable leaders to measure and manage cultures.
www.valuescentre.com
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Stages of Psychological Development
Surviving: Staying alive and healthy in the best possible conditions.
Conforming: Keeping safe and secure by staying loyal to your family, kin and culture.
Differentiating: Distinguishing yourself from the crowd by honing your skills and talents.
Individuating: Letting go of the aspects of your parental and cultural conditioning that no longer serve you.
Self-actualizing: Becoming more fully who you are by leading a values- and purpose-driven life.
Integrating: Aligning with others who share the same values and purpose to create a better world.
Serving: Fulfilling your destiny by caring for the well-being of humanity and/or the planet.
Evo
luti
on
of
Pers
on
al C
on
scio
usn
ess
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Powerful metrics that enable leaders to measure and manage cultures.
www.valuescentre.com
21
Stages of Psychological Development
Surviving: Staying alive and healthy in the best possible conditions.
Conforming: Keeping safe and secure by staying loyal to your family, kin and culture.
Differentiating: Distinguishing yourself from the crowd by honing your skills and talents.
Individuating: Letting go of the aspects of your parental and cultural conditioning that no longer serve you.
Self-actualizing: Becoming more fully who you are by leading a values- and purpose-driven life.
Integrating: Aligning with others who share the same values and purpose to create a better world.
Serving: Fulfilling your destiny by caring for the well-being of humanity and/or the planet.
Evo
luti
on
of
Pers
on
al C
on
scio
usn
ess
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Powerful metrics that enable leaders to measure and manage cultures.
www.valuescentre.com
22
Stages of Psychological Development
Surviving: Staying alive and healthy in the best possible conditions.
Conforming: Keeping safe and secure by staying loyal to your family, kin and culture.
Differentiating: Distinguishing yourself from the crowd by honing your skills and talents.
Individuating: Letting go of the aspects of your parental and cultural conditioning that no longer serve you.
Self-actualizing: Becoming more fully who you are by leading a values- and purpose-driven life.
Integrating: Aligning with others who share the same values and purpose to create a better world.
Serving: Fulfilling your destiny by caring for the well-being of humanity and/or the planet.
Evo
luti
on
of
Pers
on
al C
on
scio
usn
ess
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Powerful metrics that enable leaders to measure and manage cultures.
www.valuescentre.com
23
Levels of Consciousness
Survival: Staying alive and healthy in the best possible conditions.
Relationship: Keeping safe and secure by staying loyal to your family, kin and culture.
Self-esteem: Distinguishing yourself from the crowd by honing your skills and talents.
Transformation: Letting go of the aspects of your parental and cultural conditioning that no longer serve you.
Internal Cohesion: Becoming more fully who you are by leading a values- and purpose-driven life.
Making a difference: Aligning with others who share the same values and purpose to create a better world.
Service: Fulfilling your destiny by caring for the well-being of humanity and/or the planet.
Survival, safety, control, financial stability, wealth, job security, health.
Belonging, friendship, loyalty, caring, respect, tradition, harmony.
Excellence, status, pride , recognition, achievement, continuous improvement.
Autonomy, challenges, adaptability, accountability, continuous learning, adventure, independence.
Meaning, purpose, integrity, fairness, commitment, creativity, trust, transparency.
Making a difference, coaching, mentoring, collaboration, empathy, sustainability.
Compassion, humility, future generations, ecology, social justice, service.
WHAT WE VALUE
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The Shift from “I” to “We”
Service
Making a difference
Internal Cohesion
Transformation
Self-esteem
Relationship
Survival
COMMON GOOD (WE)
SELF INTEREST (I)
TRANSFORMATION
Evo
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SEPARATION AND ISOLATION COMMUNITY AND COHESION
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The Three Mantras of Organizational Performance
Cultural Capital is the new frontier of competitive advantage.
Mantras Implications
The Culture of an organizations is a reflection of leadership consciousness
Measurement matters. If you can measure consciousness, you can manage it.
Who you are and what your organization stands for is vitally important.
Organizational transformation begins with the personal transformation of the leaders
You can make the evolution of consciousness, conscious
Focus on Vision, Mission and Values
Begins with Self Leadership
Measure and Map the Values
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Stages in the Development of Personal Consciousness
Positive Focus / Excessive Focus
Service
Making a difference
Internal Cohesion
Transformation
Self-esteem
Relationship
Survival Financial Security & Safety Creating a safe secure environment for self and significant others. Control, greed , …
Belonging Feeling a personal sense of belonging, feeling loved by self and others. Being liked, blame, …
Self-worth Feeling a positive sense of pride in self and ability to manage your life. Power, status, …
Personal Growth Understanding your deepest motivations, experiencing responsible freedom by letting go of your fears
Finding Personal Meaning Uncovering your sense of purpose and creating a vision for the future you want to create
Collaborating with Partners Working with others to make a positive difference by actively implementing your purpose and vision
Service to Humanity and the Planet Devoting your life in self-less service to your purpose and vision
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Positive Focus / Excessive Focus
Financial Stability Shareholder value, organisational growth, employee health, safety. Control, corruption, greed, …
Belonging Loyalty, open communication, customer satisfaction, friendship. Manipulation, blame, …
High Performance Systems, processes, quality, best practices, pride in performance. Bureaucracy, complacency, …
Continuous Renewal and Learning Accountability, adaptability, empowerment, teamwork, goals orientation, personal growth
Building Corporate Community Shared values, vision, commitment, integrity, trust, passion, creativity, openness, transparency
Strategic Alliances and Partnerships Environmental awareness, community involvement, employee fulfillment, coaching/mentoring
Service To Humanity And The Planet Social responsibility, future generations, long-term perspective, ethics, compassion, humility
Stages in the Development of Organizational Consciousness
Service
Making a difference
Internal Cohesion
Transformation
Self-esteem
Relationship
Survival
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The Values Survey
Three Questions: PERSONAL VALUES Which of the following values and behaviours most reflect who you are? Pick ten. CURRENT CULTURE Which of the following values/behaviours most reflect how your organisation currently operates? Pick ten. DESIRED CULTURE Which of the following values/behaviours most reflect how you would like your organisation to operate? Pick ten.
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Placement of Values by Level
Top Ten Values
1. tradition (L) (59)
2. diversity (54)
3. control (L) (53)
4. goals orientation (46)
5. knowledge (43)
6. creativity (42)
7. productivity (37)
8. image (L) (36)
9. profit (36)
10. open communication (31)
10
4 2 5
7
9
6
8
3
1 10
Current Culture 100 Employees
Service
Making a difference
Internal Cohesion
Transformation
Self-esteem
Relationship
Survival
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Distribution of Values by Level
Current Culture 100 Employees
11%
1
2
3
4
5
6
7
Cultural Entropy
Service
Making a difference
Internal Cohesion
Transformation
Self-esteem
Relationship
Survival
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Entropy and Engagement
Cultural entropy significantly impacts employee engagement.
25%
35%
45%
55%
65%
75%
85%
0% 5% 10% 15% 20% 25% 30%
Cultural Entropy
Emp
loye
e E
nga
gem
en
t
Research carried out in 163 organisations in Australia by Hewitt Associates and the Barrett Values Centre in 2008.
Low Entropy = High Engagement
High Entropy = Low Engagement
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What is Cultural Entropy?
The amount of energy that is consumed in an organisation doing unnecessary or unproductive work that does not add value. It is a measure of the conflict, friction and frustration that employees encounter in their day-to-day activities that prevent the organisation from operating at peak performance.
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Cultural entropy is a function of the personal entropy of the current leaders of an organisation and institutional legacy of past leaders as embedded in the structures, systems, policies and procedures.
How Does Cultural Entropy Arise?
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What is Personal Entropy?
Personal entropy is the amount of fear-driven energy that a person expresses in his or her day-
to-day interactions with other people.
It is a measure of a lack of a person’s lack of personal mastery skills. Fear-driven energy arises from the
conscious and subconscious fear-based beliefs of the ego about meeting its deficiency needs.
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Example of Cultural Evolution
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SA Bank: Group (2011)
Level 7
Level 6
Level 5
Level 4
Level 3
Level 2
Level 1
Personal Values Current Culture Values Desired Culture Values
IRS (P)= 6-4-0 | IRS (L)= 0-0-0 IROS (P)= 2-2-5-1 | IROS (L)= 0-0-0-0 IROS (P)= 3-3-4-0 | IROS (L)= 0-0-0-0
Matches
PV - CC 2 CC - DC 6 PV - DC 4
Health Index (PL)
PV: 10-0 CC: 10-0 DC: 10-0
1. accountability 8576 4(R)
2. honesty 6133 5(I)
3. commitment 5221 5(I)
4. respect 4420 2(R)
5. family 4057 2(R)
6. integrity 4023 5(I)
7. caring 3568 2(R)
8. balance (home/work) 3526 4(I)
9. responsibility 3279 4(I)
10. efficiency 3085 3(I)
1. accountability 5464 4(R)
2. client-driven 4571 6(O)
3. client satisfaction 3486 2(O)
4. brand reputation 2740 3(O)
5. achievement 2491 3(I)
6. teamwork 2408 4(R)
7. environmental awareness
2372 6(S)
8. commitment 2263 5(I)
9. being the best 2218 3(O)
10. cost-consciousness 2187 3(O)
1. accountability 6987 4(R)
2. balance (home/work) 4183 4(O)
3. client-driven 3864 6(O)
4. client satisfaction 3742 2(O)
5. employee recognition 3297 2(R)
6. honesty 3053 5(I)
7. commitment 2953 5(I)
8. achievement 2809 3(I)
9. teamwork 2744 4(R)
10. employee satisfaction 2687 2(O)
Values Plot Copyright 2011 Barrett Values Centre April 2011
Black Underline = PV & CC Orange = CC & DC P = Positive L = Potentially Limiting I = Individual O = Organizational
Orange = PV, CC & DC Blue = PV & DC (white circle) R = Relationship S = Societal
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1%
0%
1%
5%
16%
16%
26%
4%
7%
24%
0% 20% 40%
1
2
3
4
5
6
7
3%
3%
5%
5%
11%
20%
13%
14%
6%
20%
0% 20% 40%
1
2
3
4
5
6
7
1%
0%
0%
5%
15%
16%
21%
12%
5%
25%
0% 20% 40%
1
2
3
4
5
6
7
SA Bank: Group (2011)
C
T
S
Values Distribution Copyright 2011 Barrett Values Centre April 2011
C = Common Good T = Transformation
S = Self-Interest
Positive Values
Potentially Limiting
Values
CTS = 37-24-39
Entropy = 2%
CTS = 33-20-47
Entropy = 11%
CTS = 38-25-37
Entropy = 1%
Personal Values
Current Culture Values
Desired Culture Values
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Entropy 14% Entropy 25% Entropy 19% Entropy 17%
SA Bank: Current Culture Evolution
1. cost-consciousness 2. profit 3. accountability 4. community involvement 5. client-driven 6. process-driven 7. bureaucracy (L) 8. results orientation 9. client satisfaction 10. silo mentality (L)
2005
1. cost-consciousness 2. accountability 3. client-driven 4. client satisfaction 5. results orientation 6. performance driven 7. profit 8. bureaucracy (L) 9. teamwork 10. community involvement
2006
1. client-driven 2. accountability 3. client satisfaction 4. cost-consciousness 5. community involvement 6. performance driven 7. profit 8. achievement 9. being the best 10. results orientation
2007 2008
1. accountability 2. client-driven 3. client satisfaction 4. community involvement 5. achievement 6. cost-consciousness 7. teamwork 8. performance driven 9. being the best 10. delivery
4 matches 4 matches 3 matches 5 matches
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Entropy 14% Entropy 13% Entropy 13% Entropy 11%
SA Bank: Current Culture Evolution
2009 2010 2011
6 matches 6 matches 6 matches
1. accountability 2. client-driven 3. client satisfaction 4. cost-consciousness 5. community involvement 6. achievement 7. teamwork 8. employee recognition 9. being the best 10. performance driven
1. accountability 2. client satisfaction 3. client-driven 4. teamwork 5. brand reputation 6. being the best 7. achievement 8. commitment 9. community involvement 10. cost-consciousness
1. accountability 2. client-driven 3. client satisfaction 4. brand reputation 5. achievement 6. teamwork 7. environmental awareness 8. commitment 9. being the best 10. cost-consciousness
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Powerful metrics that enable leaders to measure and manage cultures.
www.valuescentre.com
41
Evolution of Number of Survey Participants
8%
25%
38%
51%
67%
73% 77%
75%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
2005 2006 2007 2008 2009 2010 2011 2012
Percentage of employees voluntarily participating in the
values assessment grew significantly each year as
people realized that the leaders of the organisation were not just paying attention to the
results of the assessment, but were taking actions to reduce cultural entropy and increase
the values and mission alignment every year.
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Powerful metrics that enable leaders to measure and manage cultures.
www.valuescentre.com
42
Cultural Entropy Evolution
Entropy risk bands
0 -10% Healthy functioning
11-20% Some problems
21-30% Significant problems
31-40% Serious situation
41%+ Critical situation
Entropy reduction led to improved performance through increased employee engagement—increased revenues, productivity, share price, etc. Working toward entropy of 10% will result in healthy functioning of the organisation and improved staff morale.
25%
19%
17%
14% 13% 13%
11% 10%
0%
5%
10%
15%
20%
25%
30%
2005 2006 2007 2008 2009 2010 2011 2012
Cutlural Entropy
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Powerful metrics that enable leaders to measure and manage cultures.
www.valuescentre.com
43
Revenue Evolution
0%
5%
10%
15%
20%
25%
30%
0
5000
10000
15000
20000
25000
30000
35000
2005 2006 2007 2008 2009 2010 2011 2012
Revenue Cultural Entropy
Total revenue increases as
cultural entropy falls.
Global Economic Meltdown
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0%
5%
10%
15%
20%
25%
30%
0
200
400
600
800
1000
1200
2005 2006 2007 2008 2009 2010 2011 2012
Revenue per Capita Cultural Entropy
Revenue per capita increases
as cultural entropy falls.
Productivity Evolution
Global Economic Meltdown
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0%
5%
10%
15%
20%
25%
30%
0
5000
10000
15000
20000
2005 2006 2007 2008 2009 2010 2011 2012
Share Price Cutlural Entropy
Share price (cents) increases
as cultural entropy falls.
Low entropy
organisations are extremely resilient.
Share Price Evolution
Global Economic Meltdown