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On the same page

Posted by Eric S. Pelletier

Eric S. Pelletier

What makes high-performing companies stay that way? They are very well aligned, particularly around their enduring core values – the corporate ‘genome’. Critically, they target markets where these values are welcome, rather than trying to impose them everywhere.

Over the years, many companies have come and gone from the top echelons of the World’s Most Admired Companies (WMAC) annual ranking. Yet ‘stars’ – like IBM, GE and P&G – have remained there for years.

Looking for common success factors, we noticed that two other groups of companies also share the standout financial performance of WMACs: family owned business (FOBs), and private equity funds. FOBs amass ‘family capital’ that helps them outperform quoted companies, while private equity firms are particularly good at fast decision-making.

When we analyzed these three groups together using Hay Group’s employee opinion database, which includes responses from over 6 million employees worldwide, we found an intriguing similarity. They are all “aligned” around culture, strategy and operations. A historical comparison might be the 1,000 plus-year run of success enjoyed by the Venetian republic, itself an extremely well aligned organization.

But why are high performing companies aligned, and how can others achieve it?

Crucially, they are aligned around very strong corporate values. Making up the ‘genome’ of the organization – the very essence of what it is – these values could be customer service (IBM) or beautiful craftsmanship (Hermes).

Alignment is behind some of the greatest corporate turnarounds
When IBM departed from its core values of solving clients’ problems and turned instead to obsessing about proprietary hardware in an open solutions world, it faltered. Its turnaround, in which the IT giant returned to its customer-focused values, is one of the greatest in corporate history. Similarly, Apple was turned around when it coalesced once more around core values of simplicity. BMW refocused on engineering excellence in the 1960s, beginning a run of success that continues to this day.

Kodak: when values no longer match the market
Once a long-standing member of the WMAC club, Kodak illustrates why it’s not enough just to have strong values – they must match the markets you are targeting too. Kodak invented instant photography and digital photography. Yet in 2012 it filed for Chapter 11. What went wrong? Its values, exemplified by the slogan “you push the button, we do the rest”, left Kodak unprepared for a world in which customers would take full control of their photographic experience. These values — based on taking charge on behalf of the customer and producing very high quality products – were perfect for the past century but are no longer relevant in today’s do-it-yourself photo environment. What if Kodak had tried to find markets that were consistent with its values, rather than trying to change its values to fit a rapidly evolving photographic mass market? Its archrival Fujifilm managed the transition successfully. Today, it applies its core values around sophisticated chemistry, quality and a passion for imaging to run a thriving business producing a range of products from medical systems to semiconductor materials.

Alignment around customers is another key feature of high performing companies. This also makes them successful innovators, whereas their industry peers, who look at innovation in isolation rather than in light of what it can do for customers, often have trouble in this area. Top performers also have cultures that tolerate failure more easily, and are more focused on inclusion and diversity.

The mission statement acid test
Want to test how aligned your organization is? Read its mission statement. If it has meaning, purpose and uniqueness, then chances are your organization is well aligned and well admired.


Strong values don’t change. That is why they are an organization’s genome. But like Kodak’s “You push the button, we’ll do the rest”, the values that helped your company get where it is today may be irrelevant to your future markets. So find your values, align people around them, and identify markets where they are welcome rather than trying to make them fit the market. That’s what the best companies do.



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