Jeff Judy

Jeff's Thoughts - August 26, 2015

How Much Do Values Cost?

Every institution I work with has a "statement of values" or a "mission statement" or some other list of goals, standards, and principles. These lists tend to overlap quite a bit, from one place to the next. I don't doubt that, say, "a healthy workplace environment" or something similar is on your list. Being the "premium provider of financial services in our market" probably makes your list as well.

This overlap does not suggest for a moment that these values are not sincerely embraced by your institution. After all, many of the same values are going be held at different organizations in the same line of business.

Still, it can also be said that any value may be taken more seriously at one institution than it is at another. There's little doubt that some things end up on these "statements" because they sound good. Inclusion on a list doesn't always reflect an effort to implement them.

So how do we know which values matter, and which are more, shall we say, decorative?

Follow the money.

"Values" or "principles" represent an investment in the employees, customers, community, and other stakeholders in the institution. And investment begins with a cost. After all, without any cost, where is the investment?

Costs come in many forms. When it comes to that healthy workplace, costs could include purchasing some explicit training, either in self-study or seminar format, to educate all employees. But it also includes the time, effort, and yes, the stress cost to managers who have to deal with issues and find ways to reinforce this value, to head off those issues in advance.

Does an institution that provides no training and no discussion among management about "a healthy workplace environment" really hold that as a value?

What are the investments your institution makes in becoming that "premier service provider" to your customers? Do they involve time and money spent on getting in-depth feedback from customers, and even from non-customers? Or is it more "supply side" in nature, all about developing products and services? Does all the money go to influencing customers, and very little go to helping them influence you?

One common item on these lists goes something like, "invest in our community." The first step in upholding this value is fair lending practices, attention to CRA, and so on. That's not usually much of an issue.

But after that, what constitutes "investment in community"? Sponsoring events at a community celebration, or perhaps making a contribution to the local Little League? Providing access to education in financial literacy, not only to consumers, but to small businesses?

And what do you accept as your return on investment in the community? Good will? Greater visibility? An immediate jump in business clients? An opportunity to make new calls on potential customers?

I believe that mission statements, statements of values, and similar lists can be good for an organization. They can also be partially or wholly irrelevant.

If you want the items on your guiding list to make a difference in how you conduct your business, take a hard-nosed look at what you are willing to invest to achieve those objectives, and what you expect from a "successful investment" in your goals, values, and principles. If you can't identify either the cost or the return on an item, it might be time to ask why it is even on your list.