The Hidden Values Driving Strategy
Leaders’ subconscious biases can influence their choices of growth strategies.
A growing cadre of managers is recognizing that their companies’ long-term prospects depend on demonstrating positive societal impacts.1 To that end, they’re taking pains to clearly articulate what they and their organizations value. This is helping them to define meaningful business goals, appeal to customers, and motivate a rising generation of workers who seek purpose, not just a paycheck.
But in doing all this, leaders tend to focus on values that are consciously held and shared in their organizations, such as sustainability or diversity and inclusion. They often fail to recognize how their very personal subconscious values — for instance, how much they value debate versus harmony — influence how they make plans and decisions and achieve their goals.2 These subconscious values shape our organizations’ strategies and tactics by directing our focus and influencing which plans we make and how we implement them.
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Our research and consulting experience suggests that our values are among the biggest drivers of our strategic decisions. While conscious values may be clearly articulated by the CEO or other leaders, our very personal subconscious values are frequently not acknowledged. And knowing our values is crucial. As long as they are implicit, we can’t recognize and work to counter our biases.3
In our consulting experience, we have observed that leaders’ subconscious values particularly affect three aspects of their strategic decision-making: how and where they grow their businesses, how open they are to new ideas and new ways of solving problems, and how they interact with people. Within each of these areas, individuals typically lean toward one of two opposed values.
Our personal attitudes toward growth are shaped by how much we value security or embrace risk.4 Are we very risk averse, or can we tolerate uncertainty? Keep in mind that there is a significant difference between saying that we like risk and actually taking risks.
Our openness to new ideas and processes is influenced by whether we value learning or knowing.
1. L. Fink, “Larry Fink’s 2018 Letter to CEOs: A Sense of Purpose,” BlackRock, Jan. 16, 2018, www.blackrock.com. Fink tied long-term success with not only delivering financial performance, but also making a positive contribution to society.
2. D.C. Hambrick, “Upper Echelons Theory: An Update,” Academy of Management Review 32, no. 2 (April 2007): 334-343.
3. P. Meissner, O. Sibony, and T. Wulf, “Are You Ready to Decide?” McKinsey Quarterly 2015, no. 2 (April 2015): 18-23.
4. W.H. Stewart Jr. and P.L. Roth, “Risk Propensity Differences Between Entrepreneurs and Managers: A Meta-Analytic Review,” Journal of Applied Psychology 86, no. 1 (February 2001): 145-153.
5. C.S. Dweck, “Mindset: The New Psychology of Success” (New York: Random House, 2006).
6. D. Lovallo, T. Koller, R. Uhlaner, et al., “Your Company Is Too Risk-Averse: Here’s Why and What to Do About It,” Harvard Business Review 98, no. 2 (March-April 2020): 104-111.
7. J.M. Nebel, “Status Quo Bias, Rationality, and Conservatism About Value,” Ethics 125, no. 2 (January 2015): 449-476.
8. A. Parker, C. Medina, and B. Schill, “Diversity’s New Frontier: Diversity of Thought,” Rotman Management Magazine, fall 2017.
9. M. Spiegel and T. Schmiedel, “What Makes Change Harder — or Easier,” MIT Sloan Management Review 58, no. 3 (spring 2017): 88-89.
10. S. Arieli, L. Sagiv, and S. Roccas, “Values at Work: The Impact of Personal Values in Organisations,” Applied Psychology 69, no. 2 (April 2020): 230-275.
11. L.A. Rivera, “Hiring as Cultural Matching: The Case of Elite Professional Service Firms,” American Sociological Review 77, no. 6 (December 2012): 999-1022.
12. H. Ibarra, “Take a Wrecking Ball to Your Company’s Iconic Practices,” MIT Sloan Management Review 61, no. 2 (winter 2020): 13-16.