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Why every organization should be a little less smart

As a leader you are supposed to do smart things. Whatever school you graduated from, you probably learned a thing or two about making smart business decisions, creating smart technology or managing people in a smart way. Many of the university departments educating the leaders of our society are placing a big weight on intellect from their entrance criteria onward and recruiting consultants know that general intelligence or “G” is one of the best predictors of workplace success. Smart seems to also be one of the favourite attributes companies want associated to themselves and their products. Even the politicians' use of the word smart has increased during the last decades. If the opposite of smart is dumb, then it is pretty hard to oppose the claim, that we as individuals, organisations or societies should be smart. What could possibly be wrong with this?

Smart only goes so far

If you run a company you obviously need to be smart to some extent. You want to make sure that your accounting firm does not charge you extra, that your marketing strategy brings a steady flow of new customers and that you meet your quarterly goals.

But being too preoccupied with smartness, we can easily forget that not all issues we face are technical questions of what is the “smartest thing to do”. Instead, many of the issues companies have to tackle are ethical. Ethics are intertwined with everything. Do you hire “the good guy”, because he reminds you of yourself, or do you make use of anonymous recruitment to ensure a fair recruiting process? Do you pay men and women equally for the same job? What is the company's societal and environmental impact? The list goes on. But how do you answer these complicated ethical questions that arise during your company’s day-to-day?

By defining your values.

Values are the bread and butter of every company

Values can be thought of as something desirable that motivates and guides our actions. Values define what we consider to be good and worth pursuing. Thus, values are intimately linked to our goals. Without having a clear picture of what our values are, we cannot know what our goals should be either. You probably did not start your company because you wanted the accounting to run smoothly and because you wanted to create a successful marketing campaign (unless, obviously, your product is one of the former). Those are the tools that help you complete your company’s mission and achieve the goals you set for your company.

In a busy and competitive corporate world it might be very tempting to discard values as fluffy humanistic nonsense that does not have anything to do with the realities of business. But as values and goals cannot be separated, not caring about your company values is like saying that you don’t care where your company is going. Values are what gives your company a purpose, what tells you how to navigate situations where there are ten (or zero) “smartest things to do” and what unifies everyone in your organization under a shared goal.

How to clarify your organizational values

The thing about values is that even if we fail to explicitly define them, they still affect our work. But instead of unified company-wide codes of conduct, what would dictate the direction of the company would be a miscellaneous bunch of sometimes compatible, sometimes contradictory and sometimes outright hostile-towards-each-other goals and aims. Us humans differ in terms of what we value and we should not delude ourselves that “the good guys” we hired will think similarly to us in every respect. Values are not absolute, but something that needs to be discussed, decided on and committed to in order for a company to succeed.

So where do you start as a business leader if you want to clarify your company's values? The answer is pretty simple: start with yourself. Define your own values and discover what's truly important to you. Ask yourself:

"What do I value?"

"What makes me feel joy, pride and fulfilment?"

"Why is it important for me to wake up every morning and start my work day?".

Clarifying your values is not only important for the success of your company, but also for your own well-being. More on that topic here.

The next step is to start thinking about your company. What was the reason you started your company in the first place? In what way is your company making the lives of your customers and your employees better? When you have a profound understanding of your company's values, make sure you also communicate them to your employees and your customers.

Then comes the tricky part. It might be tempting to check values off your to-do list when they are stated at your web-page and the employee handbook, but the thing about values is that they only matter if they lead to action. You need to make sure you understand the difference between the aspirational values (what we want to do) and the practiced values (what we’re actually doing) and "mind the gap" between them. When you are evaluating how well you are doing in terms of bringing values to action, you can think of, for instance, the following things:

Do the norms of the everyday reflect the defined values? If you value efficiency, is it still common in your company to have 3-hour meetings about a loosely defined topic, where nobody is well-prepared? This is not only detrimental to the efficiency, but also undermines the well-being of the employees.

Does the communication in your company reflect the defined values? For example, if your value is transparency, do you communicate accordingly or leave some employees systematically out of the loop when making decisions that affect them?

Are you realistic about the challenges?  What kind of obstacles are there between you and the company goals (that are defined by your values) and do you have a plan to overcome those obstacles? If you are developing a new technology in an unregulated market, you cannot just hope that the legislative environment will work for your benefit in the future. Instead you need to proactively try to change the attitudes towards regulation to support these goals.

Are you willing to make tough choices? In an ideal world the best for the company is also best for the people. Sometimes, unfortunately, this is not the case. But in either case, you as a leader, must be ready to not only do the smart thing, but to do the difficult thing.

To summarize, where there are people, there are always ethical decisions to be made. You should not avoid  moral and ethical issues by hiding behind the rhetoric of smart. It should be questioned, whether there are any value-free questions in business, technology or any other form of human endeavour. But as you probably have realized reading this blog, the divide between ethical and technical questions is really not very clear cut. On that note: starting to think in terms of morality, ethics and values might be the smartest thing your company has done in a long time.


This blog-post was inspired by a book about ethical leadership by Erika Heiskanen and Jari Salo: Eettinen johtaminen - tie kestävään menestykseen (2007)