Core Values -- Building Organizations with Soul

Author: Wu Hongbiao
Publisher:
Publish Date: November 28, 2006
Features: Strongly recommended by Wang Pu, Chief Partner of Peking University Consulting Group. A great organization can survive in the long run not because of its structure or management skills, but because of the spiritual strength we call belief. — Thomas Peters, author of In Search of Excellence. What truly sustains a company is the core values deeply rooted in the hearts of its employees. — Jim Collins, author of Good to Great. A well-managed business can be profitable; a well-managed business can be healthy; a business with a strong culture can make its employees happy. — Gao Jianhua, author of Smiling Away from HP.
Since June 1996, when Peking University Consulting Group was established, we have provided consulting services to numerous businesses. Through our interactions with these companies, we have found that those that grow rapidly and are well-managed always have a strong corporate culture, and their owners and employees work with passion. In an environment where the average lifespan of a private enterprise is only 2.9 years, and on a stage where young Chinese companies must compete with strong multinational corporations, how can our businesses survive, develop, and thrive? How can we cultivate our core competitiveness? For a long time, the question of what constitutes a company’s core competitiveness has been a focal point of attention and debate. Some say it is high technology, others say it is corporate systems, organizational development, team spirit, and so on, with no consensus. But whatever the case, this exploration has gradually deepened people’s understanding of business management.
I believe that Mr. Wu Hongbiao’s book Core Values is a product of this gradual deepening of understanding, and at the same time, it has raised people’s perception of businesses to a new level, proposing the idea that "core values are a company’s core competitiveness." The concept that "ideas come before systems, and systems are more important than technology" is widely accepted. Therefore, core values are the foundation of all ideas, systems, and technologies. Technological advantages and the competitiveness they demonstrate are the product and embodiment of a company’s core values. Only by having the right core values and forming a corporate culture centered around them can a company develop its core competitiveness.
Some international research results also support this conclusion. A study by the "Transnational Corporation Competitiveness" research team at Columbia University Business School found that the core values established by these companies are almost never related to commercial profits. When the Japanese government summarized the reasons for the rapid economic development during the Meiji Restoration, it published a white paper, attributing Japan’s economic growth to three factors: spirit, secondly, regulations, and thirdly, capital. The proportion of these three factors was: spirit accounted for 50%, regulations for 40%, and capital for 10%. This conclusion highlights the importance of spiritual and cultural factors in business operations and economic development.
Research results from the RAND Corporation, McKinsey & Company, and other international management consulting firms show that the fundamental reason why the top 500 global companies outperform others is their ability to infuse vitality into their corporate culture, paying special attention to the cultivation and improvement of core values such as teamwork, customer-centricity, equal treatment of employees, and innovation, thereby forming cultural strength to ensure long-term sustainability.
A survey by Charles Hamptom, a British-American scholar, and Alfons Trompenaars on 15,000 corporate managers in the U.S., UK, Germany, Italy, Sweden, Japan, Singapore, and 12 other countries found that different businesses are influenced by their unique value systems in the process of creating wealth. This shows that core values play a central role in the development of businesses and other organizations.
To gain core competitiveness, a company must start by establishing core values and building a corporate culture centered around them. Chinese businesses have gone through stages of focusing on finance, marketing, and technology before finally realizing the importance of people, recognizing that talent is the foundation of a company. But how can we？ The answer is: establish core values and build a corporate culture centered around them.
Lu Xun said, "People need a bit of spirit." Businesses also need spirit, using it to organize people and generate cohesion and creativity. This spirit is a corporate culture centered around core values. It can be said that a company’s core competitiveness comes from its core values.
I am delighted that these ideas are well-expressed in Mr. Wu Hongbiao’s book Core Values. The book not only explains the importance of core values but also clarifies their mechanism of action in businesses, describing two threads through which core values exert their influence. First thread: Core values → corporate vision and mission → strategic goals and plans → execution. Second thread: Core values → corporate ideas and principles → corporate systems → employee behavior. These two threads will undoubtedly guide businesses in refining their core values and building their culture. I believe this book will deepen people’s understanding of business management and help Chinese businesses improve their management level and enhance their core competitiveness.