1. June 9, 2013 Dr. Marilyn Taylor Institute for Values Based Leadership. School of Leadership Studies VALUES BASED LEADERSHIP AND ORGANIZATIONAL CULTURE FOR HIGH PERFORMANCE AND A BETTER WORLD

2. Key Themes Organizational Culture --it’s significance and how we’re learning to improve it; Values Based Leadership – it’s critical role and how we might develop more of it; and Interdependence of Business and Society – how it is being recognized and its prospect for building a better world

3. INTRODUCTION: CONVENTIONAL ORGANIZATION LEADERSHIP

4. Consciousness of survival: Striving for survival Seeking profit and share value. Stable financial management.. Utilization.Excessive control. 1 Organizational Consciousness Development

5. Relationship consciousness: Stake holder relations Consciousness of survival: Striving for survival Maintenance of stake holder relations in the organization Positive communication between Employee, customer and supplier. Manipulation. reprehension Seeking profit and share value. Stable financial management.. Utilization.Excessive control. 2 1 Organizational Consciousness Development

6. Self Esteem consciousness ： Organizational Reputation, Productivity Relationship consciousness: Stake holder relations Consciousness of survival: Striving for survival Policy and process control for high efficiency Bureaucracy. complacency Maintenance of stake holder relations in the organization Positive communication between Employee, customer and supplier. Manipulation. reprehension Seeking profit and share value. Stable financial management.. Utilization.Excessive control. 3 2 1 Organizational Consciousness Development

7. Acceleration of the Pace of Change Technological change Global connectivity Interconnected global economy

8. Consciousness of change: Learning and Innovation Self Esteem consciousness ： Organizational Reputation, Productivity Relationship consciousness: Stake holder relations Consciousness of survival: Striving for survival Consistent upgrade and learning Adaptability. Innovation. Collaboration. Policy and process control for high efficiency Bureaucracy. complacency Maintenance of stake holder relations in the organization Positive communication between Employee, customer and supplier. Manipulation. reprehension Seeking profit and share value. Stable financial management.. Utilization.Excessive control. 3 2 1 4 Organizational Consciousness Development

9. A Lot of Improvements and Still a Lot of Problems

10. 10 A Different Order of Change, not just Improvement “Discontinuous change requires discontinuous thinking. If a new way of doing things is going to be different from the old, not just an improvement on it, then we shall need to look at everything in a new way.” * Charles Handy (1990) The age of unreason. Harvard Business School Press, p. 23

11. ORGANIZATIONAL CULTURE

12. Organizational Consciousness ： Internal harmony Consciousness of change: Learning and Innovation Self Esteem consciousness ： Organizational Reputation, Productivity Relationship consciousness: Stake holder relations Consciousness of survival: Striving for survival Development of highly cohesive culture: Restrained passion, shared value Consistent upgrade and learning Adaptability. Innovation. Collaboration. Policy and process control for high efficiency Bureaucracy. complacency Maintenance of stake holder relations in the organization Positive communication between Employee, customer and supplier. Manipulation. reprehension Seeking profit and share value. Stable financial management.. Utilization.Excessive control. 3 2 1 5 4 Organizational Consciousness Development

13. What is Culture? “...a pattern of basic assumptions— invented, discovered, or developed by a given group as it learns to cope with its problems of external adaptation and internal integration...” p. 9 How things get done around here

14. Collective consciousness ： Change of reality Organizational Consciousness ： Internal harmony Consciousness of change: Learning and Innovation Self Esteem consciousness ： Organizational Reputation, Productivity Relationship consciousness: Stake holder relations Consciousness of survival: Striving for survival Development of highly cohesive culture: Restrained passion, shared value Consistent upgrade and learning Adaptability. Innovation. Collaboration. Policy and process control for high efficiency Bureaucracy. complacency Maintenance of stake holder relations in the organization Positive communication between Employee, customer and supplier. Manipulation. reprehension Seeking profit and share value. Stable financial management.. Utilization.Excessive control. 6 3 2 1 5 4 Strategic alliance and partnership Employee. Execution. Community. Participation Organizational Consciousness Development

15. Positive Focus/ Excessive Focus Social consciousness ： Serving the society Collective consciousness ： Change of reality Organizational Consciousness ： Internal harmony Consciousness of change: Learning and Innovation Self Esteem consciousness ： Organizational Reputation, Productivity Relationship consciousness: Stake holder relations Consciousness of survival: Striving for survival Serving humanity Ethics, social responsibility, the future generation. Development of highly cohesive culture: Restrained passion, shared value Consistent upgrade and learning Adaptability. Innovation. Collaboration. Policy and process control for high efficiency Bureaucracy. complacency Maintenance of stake holder relations in the organization Positive communication between Employee, customer and supplier. Manipulation. reprehension Seeking profit and share value. Stable financial management.. Utilization.Excessive control. 7 6 3 2 1 5 4 Strategic alliance and partnership Employee. Execution. Community. Participation Organizational Consciousness Development

16. Placement of Values by Level 16 Current Culture 100 Employees 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) Service External cohesion Internal cohesion Transformation Self-esteem Relationship Survival 4 4 2 2 5 5 7 7 9 9 6 6 8 8 3 3 1 10

17. Calculating Wasted Energy & Resources Current Culture 100 Employees Service External cohesion Internal cohesion Transformation Self-esteem Relationship Survival 11% Cultural Entropy 1 2 3 4 5 6 7

19. Entropy 13% Entropy 25% Entropy 19% Entropy 17% Entropy 14% Nedbank: Tracking Current Culture 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 20072008 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 2009 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 5 matches 4 matches 3 matches 6 matches

20. Nedbank: Cultural Evolution Entropy reduction leads to improved performance—increased revenues, profits and share price. Working toward entropy of <10% will result in healthy functioning of the organisation and improvement of staff morale. Entropy Scores

21. Revenue grew Share Price grew Nedbank: Financial Impact of Cultural Evolution

22. Key Financial Indicators For the year ended200520042003 Headline earnings Rm3 1671 74355 Headline EPS cents79748319 ROE %15,511,10,4

23. Tor Enroth: Culture Manager at Volvo IT

24. Volvo IT Culture – Over 10 Years 1999/ 2000 Realize Strategy – Culture as an Enabler 2003/ 200420082010 Grow ONE Company – the Volvo IT Identity Grow Customer Focus – applying values in operations Ensure Resilience – Culture in Downturn - Build a company with one culture, uniting people with different backgrounds - Build awareness & understanding of culture - Apply our values in our work with customers, make sure we live our values - Build awareness & understanding of culture - Work with trust to decrease loss of faith and commitment in turbulent times - Maintain customer/ delivery focus - Build awareness & understanding of culture - Emphasize the connection to our new strategy and the requirements it poses on our culture and brand - Focus on making culture an enabler for expected business benefits Culture - Tor Eneroth, 2010

25. The Culture – Our Main Competitive Advantage Culture - Tor Eneroth, 2010

26. Impact of Volvo IT Culture 2000 - 2009 Improved more than 30% Customer Satisfaction ESI 90% last 5 years Employee Satisfaction From 55 to 90% Delivery Precision Best in branch (IT) Attractive employer Culture - Tor Eneroth, 2010

27. Investments in our Culture Pays Back! >500 Culture Ambassadors to facilitate and support “ Dedicated and persistent work with our wanted culture is one of our most critical success factors ” Visible Results Customer Satisfaction 60 to 90% Employee Satisfaction ~90% Owners Trust Low to High! Delivery Precision 55 to 90% Attractive Employer Best in Class! Systematic Approach >100 tools and methods for active dialogues and reinforcement Consistently Shared Mission, Vision Values

28. Best Employers have Lowest Entropy Staff EngagementCultural Entropy Tier 1 (Best)89%5% Tier 276%8% Tier 355%15% Tier 4 (Worst)40%21% This research of 163 organizations in Australia was carried out by Hewitt Associates and the Barrett Values Centre in 2008

29. VALUES BASED LEADERSHIP

30. BALANCING HEALTHY SELF-INTEREST AND THE COMMON GOOD VALUES–BASED LEADERSHIP

31. Some Features of Values Based Leadership Develops shared vision and values linked to strategy and structure Fosters employee development and invites their leadership and responsibility Recognizes employees’ meanings in their work Models their values in action Creates enduring commitment in stakeholder relationships and in the wider community Keeps a long term perspective

32. The Seven Styles of Leadership Wisdom/Visionary Mentor/ Partner Integrator/ Inspirer Facilitator/ Influencer Manager/ Organiser Relationship Manager Crisis Director SERVICE TO HUMANITY Long-term perspective. Future generations. Ethics. COLLABORATION WITH CUSTOMERS AND LOCAL COMMUNITY Strategic allicances. Employee fulfilment. Environmental stewardship. DEVELOPMENT OF CORPORATE COMMUNITY Positive, creative corporate culture. Shared vision and values. CONTINUOUS RENEWAL Promotes learning and innovation. Team builder. Empowers others. BEING THE BEST. BEST PRACTICE Productivity, efficiency, quality, systems and processes. Bureaucracy. Complacency. RELATIONSHIPS SUPPORTING CORPORATE NEEDS Good communication between employees, customers and suppliers. Manipulation. Blame. PURSUIT OF PROFIT & SHAREHOLDER VALUE Able to manage adversity. Directive. Willing to take charge. Exploitation. Over-control. Positive Focus/ Excessive Focus

33. Canadians’ Personal Values 2009 1.Honesty 2. Family 3. Caring 4. Humor/Fun 5. Respect 6. Friendship 7. Responsibility 8. Positive Attitude 9. Trust 10. Patience All Values Entropy = 5% - Potentially Limiting Value - Positive Value Level 7 Level 6 Level 5 Level 4 Level 3 Level 2 Level 1 Top Values

34. Impact of Leaders on Organizational Cultures Personality Individual values and beliefs Character Individual behaviors Culture Group values and beliefs Social Structures Group behaviors Individual Collective Values Behaviors Based on the work of Ken Wilber INFLUENCE

35. INTERDEPENDENCE OF BUSINESS & SOCIETY

36. Collective consciousness ： Change of reality Organizational Consciousness ： Internal harmony Consciousness of change: Learning and Innovation Self Esteem consciousness ： Organizational Reputation, Productivity Relationship consciousness: Stake holder relations Consciousness of survival: Striving for survival Development of highly cohesive culture: Restrained passion, shared value Consistent upgrade and learning Adaptability. Innovation. Collaboration. Policy and process control for high efficiency Bureaucracy. complacency Maintenance of stake holder relations in the organization Positive communication between Employee, customer and supplier. Manipulation. reprehension Seeking profit and share value. Stable financial management.. Utilization.Excessive control. 6 3 2 1 5 4 Strategic alliance and partnership Employee. Execution. Community. Participation Organizational Consciousness Development

37. Social consciousness ： Serving the society Collective consciousness ： Change of reality Organizational Consciousness ： Internal harmony Consciousness of change: Learning and Innovation Self Esteem consciousness ： Organizational Reputation, Productivity Relationship consciousness: Stake holder relations Consciousness of survival: Striving for survival Serving humanity Ethics, social responsibility, the future generation. Development of highly cohesive culture: Restrained passion, shared value Consistent upgrade and learning Adaptability. Innovation. Collaboration. Policy and process control for high efficiency Bureaucracy. complacency Maintenance of stake holder relations in the organization Positive communication between Employee, customer and supplier. Manipulation. reprehension Seeking profit and share value. Stable financial management.. Utilization.Excessive control. 7 6 3 2 1 5 4 Strategic alliance and partnership Employee. Execution. Community. Participation Organizational Consciousness Development

38. Re-Interpretation of Business as a Social Institution SOCIETY BUSINESS SOCIETY BUSINESS

39. BUSINESS is a WHOLLY OWNED SUBSIDIARY... … of its SOCIETY which is a WHOLLY OWNED SUBSIDIARY… … of the ENVIRONMENT VALUES-BASED LEADERSHIP VALUES-BASED LEADERSHIP Richard Barrett’s Comment

41. PRINCIPLES OF SUSTAINABLE BANKING 1. Triple bottom line approach (people, planet, prosperity) at the heart of the business model; 2. Grounded in communities, serving the real economy and enabling new business models to meet the needs of both; 3. Long-term relationships with clients and a direct understanding of their economic activities and the risks involved; 4. Long-term, self-sustaining, and resilient to outside disruptions; 5. Transparent and inclusive governance; 6. All of these principles embedded in the culture of the bank.

42. Values Based Leaders have a Wider Perspective “... the distinguishing feature of “firms of endearment” is that they treat all stakeholders— employees, customers, investors, partners, and society—equally. In addition, they fully recognize that they are a part of an economic ecosystem with many interdependent participants. They are committed to exemplary citizenship, and they embrace the concept of servant leadership.

43. THANK YOU !

44. 原理、方法与工具 从人的需求到企业意识的七个层次 员工意识的 七个层次 企业意识的七个层次 服务社会 变革现实 人生意义培养内涵 个人成长 转换升华 个人成就 自我尊严 人际关系各方关系 健康安全求得生存 (1) (2) (3) (4) (5) (6) (7) 公共利益） 个人利益