Interview with Robert Ferguson
The following transcript comes from our recent podcast interview with Robert Ferguson.
Carlos: Greetings! With us today we have Robert Ferguson, a Values expert whose website is www.fergusonvalues.com. Welcome Robert!
Robert: Thanks, Carlos. Happy to be here.
Carlos: Thank you for joining us. Robert, one of the topics that has surfaced in the last several years is around developing a Sales-Driven Growth culture. All our research suggests that essential to having a strong culture is the role that values play. You consider yourself a values expert. Why did you choose to make values the focus of your consulting practice?
Robert: It’s very interesting. 15 years ago, I witnessed the collapse of companies like WorldCom and Enron and others. As a strategic marketer, I was working with Fortune 500 companies like Nortel and Sprint and FedEx, and I often saw a disconnect between the brand promise and the brand experience. At Nortel, for example, when I started working with them in 1996, I remember when the new CEO John Roth took over and talked about doing a right angle turn, taking a 100 year old company that was in the Telecommunications business into the internet business. They grew to 90,000 employees and 40 billion dollars in revenue in the year 2000. And yet, by 2009 they were bankrupt and it just floored me how could this happen? And so, I really dug into it. There has to be something here and for me, and it all came down to values. The core of success is found in values.
Carlos: So you saw that there was a big gap in the case of those companies on how they applied their values?
Robert: Absolutely. I mean, there were a lot of good people but there was no unity around what makes one company different from another and what that one company should focus on. What was it that kept them all together? And that’s where I have found that those that are very successful are very clear on what makes them different and to me, it’s in Values.
Carlos: Well, so how would you define Values?
Robert: It’s interesting. The word “value” actually means worth. When people say, “Well, what’s it worth to you?” they’re talking about values. But most people think of values as ethics. And Carlos, what I’d like to do is really separate the difference between values and ethics first. I think this is an important point.
Robert: Ethics is about providing moral clarity. It’s the system of moral principles, the rules of conduct on what is right and wrong, what is good and bad. Values provide strategic direction. It is values that helps all the stakeholders understand what is produced or provided, how it gets done, who is involved, where it belongs and when and why it matters. And so, values to me is critical to creating competitive advantage.
Carlos: Wow. That’s powerful. In fact, I was looking at one of your white papers and it’s clear that you are a diligent student of values. In the white paper you identified 423 differentiating values and 17 common values that are shared across all businesses. That is quite a list. Can you share what a common value is and what a differentiating value is and why they’re important?
Robert: Absolutely. My original work started when I began looking at values as a strategic marketer, Carlos, I looked and said, “What is it that makes a company unique?” But as I was doing my research and had actually gathered the 423 values that you referenced, I proceeded to define all of them. I went through and looked at them and I thought each of these could be unique as a place to start to help organizations identify what makes them unique. But then as I was going along and working with different companies I came to realize there was a common theme – of certain values that every company seemed to have. So, a number of years ago – I started in 2013 – I decided to take the Fortune 500 company list and analyze the values of every single company and what I discovered is that there are 17 values that are common across all companies. And I could see that these were the ones that weren’t making a company unique but rather were the 17 values that employees, customers, shareholders and suppliers expect from every company, at least to some degree.
Carlos: Please give me some examples of those.
Robert: Sure. The top 3 common values: number one is Integrity, which probably doesn’t surprise anyone. Number two is respect, also known as trust. And the third is excellence, or quality. Those are the top 3 values of the 17.
Carlos: And so, you found that for the Fortune 500 companies, 17 or these values were pretty common?
Robert: All the way across. And maybe I should say there’s 17 categories. So some might say ethics and someone else might say honesty and another company might list integrity but when you look at their definition they were all meaning the same thing.
Robert: So there were 17 values or 17 categories. We might talk a little more about that in a bit.
Carlos: Alright. So, now contrast the “common values” with “differentiating values.”
Robert: Sure. To me Differentiating Values determine an organization’s strategic direction. They’re strategic in that they define: Where we are going and what sets us apart from our competitors. That really helps all the stakeholders understand what is truly unique, and defines the meaningful purpose, and most important for me it’s what increases brand value. Just consider: What’s the difference between Walmart and Target? They are 2 companies. They are both focused on discount vs. a retail store like Nordstrom or Macy’s. They are different brands. So, if you’re going to create brand value you have to know what makes us different from our competitors and to me that’s what differentiating values are, and there can only be a few. It’s not a lot. Three is the number that I always promote.
Carlos: Well, I know that you talk about them providing competitive advantage. Can you give me examples of other companies that have values that are truly unique? Maybe give us an example just so we understand it better.
Robert: Absolutely. For example, when I present, I ask people, “Of all the automotive companies on the planet, which one owns the value of safety in the mind of consumers?” And the one that everyone gets is Volvo. Now, specifically Volvo trucks, as they’ve actually migrated a little bit in the last year with the change in the automotive industry, but Volvo trucks remained independent and safety is their number one value. If we go back to the root of when they started the company in 1927, there was actually two values they had: safety and quality. But safety in the case of Volvo is different from other companies that say, you know, we want to have a safe product. They build safety into every aspect to their vehicle. In fact, there are many safety features that we have in vehicles today that originated from Volvo, and they actually even put their vision statement inside the definition of the value of safety where they’ve stated, “Our vision is it there will be zero accidents on the road around the world with any Volvo product.” It’s quite a vision statement!
Carlos: In the past when I was looking to buy a car, I remember people saying that Volvo had an average life span of 17 years. So I know that they were also very driven by longevity and the stability and quality of their product.
Alright, well that’s fair. That gives us a little bit of sense of what we mean by differentiating values. But how do companies create accountability for values? We know that there are many companies who have created values and maybe they put posters around the hallways on the values that they have. They have it in their mission statements. But how do they create accountability for values?
Robert: That’s a great question, Carlos, and I like the fact you highlighted posters. I like to say, “Values need to be more than just posters on the walls, they need to be discussed in the halls!” And to me, for accountability there are a couple of things. Number one, we need to hire and reward for supporting differentiating values. So, the example I used about Volvo, if they’re hiring people, they should be hiring and rewarding people for promoting and encouraging safety features and new innovations around safety. But then I also think that with common values, like integrity, if we really value these, then we have to be accountable, we need to fire or reprimand people if they violate common values. And so, if people know they’re serious, then there’s either a reward or a reprimand. Then they’re serious.
Carlos: Consequences, in other words.
Robert: Absolutely. And I also think values need to be included in employee reviews and team meetings. They need to be discussed on a regular basis.
Carlos: So values are one of the things that companies require people to agree to? I know that when I began my career many years ago with IBM, that was one of the expectations that we had to sign our commitment to the values of the company.
Robert: My first answer is it’s easy to say yes. The challenge today is that most organizations, especially bigger ones like IBM, have a code of business conduct. They can range from a couple of pages to where I’ve seen documents that are a 100 pages or more. So, if you ask somebody to sign a document that big what do they know they are signing? What would they remember?
Carlos: That’s true.
Robert: That is why I promote 3. If there are 3 values and we were to say these are the 3 things that matter here and we ask you to sign that, I’m going to remember and integrate into every decision and action that I take here at this company.
Carlos: So when you think about a sales organization, since that is the focus of our company, we know that companies often have these common values. Sometimes they’re not being enforced as you said, but if I’m the leader of the sales force and I want to get serious about defining and practicing values within the sales team, as opposed to the entire corporation, what advice would you give me as far as what I as a VP of sales can do to establish a stronger culture and using values as part of that?
Robert: Absolutely. So, there’s 2 parts to this that I would like to respond. One is I want to look at the common values which apply to the sales organization. And then, also look at differentiating values.
Carlos: Right. So let’s do that.
Robert: Sure. So, if I look at the 17 values, there are 8 of the 17 that I think really apply to sales, and I think maybe in this order. The number one is actually the value of ACHIEVEMENT. And, as I looked across Fortune 500 companies there are different values or qualities of achievement but they’re all meaning the same thing. So, I have various values under the umbrella of Achievement. Maybe the most common ones are RESULTS, as sales are all about results. Or some will claim SUCCESS or GROWTH. Some list the value of AMBITION. These are all great, but what they’re really talking about is ACHIEVEMENT, where we have numbers or metrics that we need to meet.
Carlos: So ACHIEVEMENT is one?
Robert: Achievement is one. Then we’d look at the value of EXCELLENCE. Here’s an element that I think is very important in sales. When sales folks talk about EXCELLENCE, they’re talking about PERFORMANCE or DISCIPLINE or RESPONSIVENESS. They’re all elements of EXCELLENCE, and I think these very much apply to sales. Under the value of CARE, another one of the 17 common values, SERVICE and ANTICIPATION are 2 key aspects for sales.
And then, when I think about the emotional side of values, I see PASSION. It’s one of the 17 and having ENTHUSIASM being filled with ENERGY and a can-do attitude, again, those are all descriptors of the PASSION value that sales organizations talk about. Another is LEADERSHIP. That’s one of the 17 values. Leadership as John Maxwell said is INFLUENCE. Nothing more nothing less and I think very much that salespeople very much influence customers to understand the direction you’re trying to get them to go.
Carlos: And INFLUENCE is different than PERSUASION. Maybe you persuade by influencing as a result of your character, or your knowledge or your process.
Robert: Correct. Absolutely.
Carlos: So we got ACHIEVEMENT, EXCELLENCE, CARE, PASSION, and LEADERSHIP. You said a couple of more.
Robert: Yes. LEARNING I think is key for sales. It is about continuous improvement or developing insight as part of personal growth – these are key for sales cultures. And then a few more from the common values list would be RESPONSIBILITY, COMMITMENT, OWNERSHIP, and SELF-CONTROL, all of those aspects to me in sales are critical. And then, the 8th one that I would highlight from the common values for a sales culture would be TEAMWORK as you don’t really want to operate alone. It’s having a collaborative environment and synergy that you need to promote.
Carlos: So these would be the common values that you would recommend that a VP needs to have and be at the core of any sales organization. Is that what you’re saying?
Carlos: Okay. So, now on the other side for the “differentiating” values what comes to mind?
Robert: Well, again, I’ve got some categories and I know I’m referring to a lot of words and yet to me what I would do first is ask: “Which of these resonate with your organization?” So, one of them might be RELIABILITY, where the elements of reliability include trustworthiness, dependability, consistency and even stability. And depending on the industry, it could be that STABILITY is a great way of talking about reliability if other organizations or the environment is not stable. Well, for a company that can truly represent stability — what a great way to differentiate from their competitors.
Carlos: In other words, because there’s a lot of churn in an industry, the fact that we’re saying that a differentiating value for us is RELIABILITY it can give us advantage.
Carlos: Okay. What else is there?
Robert: Another one would be ADAPTABILITY. I think adaptability is an opportunity for many sales organizations where there is a need for speed. There’s a need for agility or flexibility. If the competitors are slow or they’re not flexible at all, what a great opportunity — providing the culture supports that’s value. That’s going to be key.
Robert: The third one would be, this might be interesting for you, COURAGE. Having boldness, having conviction where maybe others in an industry are very timid in taking risks or an opportunity for somebody to stand up and say, “We’re going to have the courage to do something different.”
Carlos: So, let me make sure I understand. If I’m the VP of Sales, I need to identify which of the common values resonate the most for me and my sales force , and then also select from either the entire list so that there are no more than 3 that are differentiating values. Is that the prescription?
Robert: That’s correct. Perfect prescription.
Carlos: Alright. I would now like for you to clarify for me is where do I place more emphasis? On the differentiating values or more emphasis on the common values or both?
Robert: I think more emphasis should be on the differentiating values because that is what a sales organization needs to say when they’re talking to customers. They need to be really clear on what sets them apart, what’s going to help them be successful , to beat their competitors and to help our customers achieve their desired outcome. What is it that we’re going to bring to the table? And it should be 2 or 3 values where we can be really clear on what will really make a difference.
Carlos: Good. Thank you. I recognized that you are a student of culture. When we spoke last, we had discussed how values weave and shape the culture. Now, any specific ideas on how a set of core values can be applied to help transform a culture?
Robert: Absolutely. In fact, one of the common questions I get Carlos is, what’s the difference between values and culture. My answer is that relevant and meaningful values set the strategic direction. Values thereby influence the culture by establishing expected behaviors, but the opposite is not true. What I mean by that is that every organization has a culture. The culture may be healthy or there may be elements that are unhealthy. Values are a way of saying: “This is what matters, this is the direction we need to go.” There are 4 things that I would highlight on how the values can help align culture to the strategic direction.
The first is that values must be applied to everyone. Imagine a VP Sales saying: “Oh, I have 3 problem salespeople and I want them to have these values but my top salespeople – they are amazing but I don’t want them to be encumbered by these, so I’m not going to talk to them about it.” Well, that’s not going to work. Values have to apply to everyone.
Robert: The second would be that people do need to be held accountable and one of the things that I find very powerful is that it is not just the leaders who are responsible for promoting and talking about and getting people accountable. You want to create a culture where there is peer to peer accountability. So, imagine a sales environment where one sales rep can say to another, “Hey, you know Joe, you might like to do that, but you can’t do that here!” When salespeople keep each other accountable or when all employees keep each other accountable, now we’ve created an environment where that’s in the culture and then that value really matters.
My third point would be that we need to have ongoing communication. So, not just on the website and the booklets for hiring new people, but values need to be in weekly emails, sales reports and employee reviews. They need to be used regularly and discussed on an ongoing basis so we know that they’re there.
And then, last but not least, we have to find a way to have customers what they can expect. So ideally, it’s built into our marketing messaging. It’s built into the messaging when we talk to customers as something they can expect. For example, reliability, or they can expect courage, or boldness, or something else. They have to know what they should expect; so then our team knows they must deliver it because our customers are expecting it. Does that make sense?
Carlos: Yes. Other culture experts talk a lot about defining behaviors for each value. What’s your thought on that?
Robert: One of the things that I’ve seen in Fortune 500 companies that I really like in their documents is they would give a nice definition for each value so that it is very clear and then they provide some examples of both good and bad behavior, making it really clear. If we’re going to say integrity matters, then here’s what it means. If the value is being ethical, then we are honest, we always tell the truth. Then they would give some examples, like if a customer calls and says, “Hey… so and so says that you give a special discount, is that true?” Well, you have to give an honest answer. Then they also give an example, “if somebody says they want to give you a gift or they want to take you on a golf tour to try and persuade you so that you’ll give better pricing, you can’t do that.” So they would give very specific examples of what you can and can’t do around the definition of the value which I find very useful.
Carlos: So that helps. In other words, crystallizing the behaviors so that you are communicating what’s expected.
Carlos: Well, that’s helpful. Anything else? I mean, you shared earlier that you think 3 is probably a good number at least for the differentiating values and then of course more if you are talking about the core values. When you work with an organization, what process do you take them through in order to define the differentiating values? Just give us an idea of the process that you follow.
Robert: It’s a 3 step process that I use. I start with our list of 423. The first part of the 3 step process I ask specific questions around these values. I also ask what’s unique, relevant and sustainable? It is a process of whittling down from 423 to “What is it that sets you apart?” and then whittling that down to, “Which of these is most relevant to your customers?” and then whittling that down to, “Which of these are sustainable?” They’re not called wishful thinking but rather what we can live by today, and over the next 3 to 5 years. So, identifying what is unique, relevant and sustainable is the process I walk people through until they get down to 3.
Carlos: Do you try to interview some of their customers to see what the customers think about the values that they find are the most important to them as a customer?
Robert: There’s really two parts to this. One is with a startup, a new company, or a new division, versus a company that that’s been around a while. I often do a 3-step process here. I work with an internal team of 6 to 8 people who represents the cross-section of the organization or sales team and then we look at the industry and see what our competitors claim based on their marketing messaging. We then determine what value might give us competitive advantage. Finally, we go and talk to customers which I love doing. Imagine right now in a session – I often do this – I ask if everybody knows Walmart, and then I ask, “Give me one word to describe Walmart?” Everybody can do this. They’ll usually say, “Cheap.” And then I’ll say, “Well, I can turn that into a good term. It’s called frugality.” That’s a value that all customers see in Walmart, being frugal. So imagine if we ask our customers, “Give me one word to describe our organization?” They can do it. Then it becomes good to ask, “What do they see us as?” versus “How do we want to be seen?”
Carlos: Thank you. Our objective was to try to keep the podcast to about 30 minutes. Anything else you would like to share with our listeners on the importance of Values?
Robert: One real quick story I’d love to share with you that helps exemplify this. In 2008 in Mumbai, India at the Taj Mahal Palace Hotel, there were terrorist that came in that day in November of 2008. Guns blazing and they were looking for foreign nationals. And they set the roof on fire. It was just chaos. And what was most interesting, something never experienced before, is that not a single employee left the building!
Robert: Not a single employee. In fact, there were stories of the kitchen staff forming a human shield to help protect and usher out the guests. It was just an amazing feat. In fact, they got the telephone operators out who then went back in. Amazing! So, a researcher from Harvard in 2010 went there to interview them and ask, “What is it about all of your people that sets you apart that would cause them even in the face of danger, to stand and stay?” And here’s what they found out. They hired every single employee – whether they were kitchen staff, the concierge, the front desk, managers, everyone – was hired on a single value, the value of empathy.
Robert: Yes. Empathy. And empathy means someone who is willing to do something for someone else even if it cuts against their own self-interest. And so, they hired people specifically on this idea of people who wanted to serve others, but it wasn’t just serving, it was empathy. They looked for people who were focused on the needs of others. They would go to tier-2 and tier-3 cities at universities and colleges and campuses to hire people, because they found that major city universities were more competitive. They would go ahead and talk to professors of their schools and ask, “Who in your class demonstrates the value of empathy?” and that’s who they would hire. So, they went to a great lengths to make sure that every person working in that hotel all demonstrated the value of empathy, which is what set them apart from their competitors – even a Ritz-Carlton – who are more focused on service than on empathy. So, my point is that if you get everybody aligned around a differentiating value that is unique to your company, amazing things will happen, including that they might even stand in the face of danger.
Carlos: Wow! That’s a great story. I know that many companies follow that advice, to hire for empathy and then train for service. In other words, they want to have service professionals particularly the ones around the phone who always get the irate customers, to put themselves in the shoes of a customer. Great story.
Carlos: Thank you, Robert for the opportunity to visit with you. I know that this will be a recording that will be followed. Appreciate it.
Robert: I appreciate the opportunity. Thanks, Carlos.