Keeping a Company VALUEable

By February 8, 2016 Business

16 years after the Pilgrims stepped foot on Plymouth Rock, the Puritans launched what would arguably become the most famous university in the world, Harvard University (1636). According to the founders:

“After God had carried us safely to New England, and we had built our houses, provided necessaries for our livelihood, reared convenient places for God’s worship, and settled the civil government; one of the next things we longed for, and looked after was to advance learning, and perpetuate it to posterity; dreading to leave an illiterate ministry to the churches, when our present ministers shall lie in the dust.”

Over 50% of Harvard’s 17th century graduates became ministers. Contrast that with a 2012 story in the Harvard Crimson:

“’It’s very hard to name the name of Christ at Harvard,’ Tu says matter-of-factly. It is a word—an idea—that carries with it a tremendous amount of baggage at an institution known for its secularism.”

Harvard is not alone. In fact, 106 of the first 108 American colleges were founded by Christians and built on Christian principles. Most of the founders of these institutions would likely roll over in their graves if they were privy to the current state of their beloved institutions.

There are also numerous examples of corporations that have strayed dramatically from their core principles. Take the example of IBM, which was founded in 1911 by a loose merger of three machinery manufacturers. Thomas J. Watson, Sr. became CEO in 1914, setting the groundwork for a truly remarkable company. In 1956, Thomas J. Watson, Jr. took over the company and codified the tenants that his father had developed during the past 42 years. In a speech at Columbia University, Watson, Jr. listed IBMs core beliefs:

  • Respect for the individual
  • We want to give the best customer service of any company in the world
  • We believe that an organization should pursue all tasks with the idea that they can be accomplished in a superior fashion

IBM invested in its people and took tremendous pride at their ability to avoid layoffs. In his influential book A Business and Its Beliefs: The Ideas That Helped Build IBM Watson, Jr. stated “For almost a quarter of a century now, no one has lost an hour’s time in layoffs from IBM, in spite of recessions and major product shifts.” Compare that with the 60,000 people who lost their jobs months into Lou V. Gerstner Jr.’s tenure (1993-2002). Gerstner reimagined the company in his eight principles. Towards the top were customer satisfaction and shareholder value, the primary measures of success, while employees and communities sat at the bottom. Samuel J. Palmisano (2002-2011) followed in Gerstner’s footsteps naming his vision for the company the “2015 Road Map” in which the primary objective was to double earnings per share to $20.

Universities and corporations of note survive long past their founders, yet all too often they transform into entities that are drastically different. Is this just simply bureaucratic evolution or is it possible to create an organization that can and will stay true to its core tenants all the while remaining nimble? I was pondering these questions in a recent conversation with Henry Kaestner, co-founder of Bandwidth.com and Sovereign’s Capital. Henry said that it ultimately comes down to control. I agree and would add that an effective transition must also include the passing of the torch to like-minded individuals who share in the values of the organization. Hiring solely on competency and ignoring values-fit is a sure fire way to cut short the lifespan of a values-minded organization.

This blog was originally published on Joel Montgomery’s personal blog. The original post can be found here.

Photo Credit: Boston Public Library

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