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Rules of the road Featured

8:00pm EDT October 26, 2008

Jim Kavanaugh has heard and spoken about many of the common values that leaders use to describe what their company stands for. Honesty, integrity, transparency, accountability and so on and so on.

But as he sat down to compose a list of the core values that would guide World Wide Technology Inc. after the dot-com bubble burst, he knew he needed to be more selective.

“The easy thing to do was to list every strong value that you could ever think of,” says the company’s co-founder and CEO. “You would end up with 50 different values or 50 different things that you think are critical to the organization.”

You would also end up with a laundry list of principles that, while important, would be very difficult for most employees to get their minds around. Kavanaugh needed an exclusive list that his people could easily remember and live by.

“If it was something that just drove a specific action because of the time period we’re in or it’s the Internet craze or a market melt-down, if it was anything time-related, I wasn’t interested in it,” Kavanaugh says. “I wanted it to be structured and be a value system that would stand the test of time.”

He wanted a list that would guide World Wide Technology today, tomorrow and long into the future when Kavanaugh is no longer with the company.

“A lot of organizations create their own problem, and that is they change their core values,” Kavanaugh says. “If I leave, these core values should still be able to live and breathe within the organization because it’s not dependent on me or the specific time period we are in relative to the economy.”

The IT solutions provider needed these core values to provide alignment for employees on how they were expected to act.

“As a smaller company, you can do that just through communicating in person or through some type of correspondence,” Kavanaugh says. “However, as you get larger, you need to build a more systematic way of getting that message out.”

Here’s how Kavanaugh conveyed a list of foundational core values throughout his company and got employees to commit to them.

Act with integrity

The acronym for WWT’s five core values is EPATH, or the EPATH to employee and company success.

It stands for embracing change and diversity of people and thought; passion and a strong work ethic; attitude and being positive and open-minded; being a team player; and honesty and integrity.

“I put a bunch of things down and thought about what I felt were the most important,” Kavanaugh says. “You’re never going to capture everything, but I think it’s critical that you keep it simple enough that people can understand it, and you also keep it consistent.”

Honesty and integrity is the most important one out of the group in the eyes of Kavanaugh. It is the foundation upon which the values of embracing change, passion, work ethic and attitude are built.

“People need to feel that the organization has a high level of integrity all throughout the company,” Kavanaugh says.

The conveyance of values begins at the top. “The CEO needs to do what’s right,” Kavanaugh says. “When the organization and the people see those types of decisions being made with consistent integrity, that begins to resonate and drive the values and the culture of the organization.”

These are decisions that are made both inside the company and with external clients and vendors. Internally, it may come down to a longtime employee who has developed relationships throughout the company but did something that clearly crossed the line of integrity.

“It would be very easy to try to overlook that specific action or that specific thing that individual did and just allow them to continue to work for the company,” Kavanaugh says. “If you do that, all of a sudden now people start questioning the integrity of the CEO and the executive management team because they don’t walk the talk.”

If you have honesty and integrity as one of your core values and you respond consistently each and every time someone crosses that line, the message gets delivered.

“We expect you to treat people with a level of respect and integrity, and your actions need to demonstrate that,” Kavanaugh says. “We all know what we need to do. You need to have an organization that is willing and ready to make those decisions. If you don’t make that decision at that point, you jeopardize the integrity of the entire organization.”

Externally, it could come down to a business deal in which you might be asked to break a commitment to generate more money.

“You could look at it and say, ‘That’s an easy decision; you’re going to make a lot more money if you go with this other partner,’” Kavanaugh says. “We absolutely believe it’s the wrong thing to do from an integrity perspective. If we committed to that partner, we’re going to stay with that partner. If we end up jeopardizing profit margin on this deal because of that or even potentially losing the deal, we’ll lose the deal before we jeopardize the integrity of the company and the integrity of our employees.”

Experience has shown Kavanaugh that honesty wins out in the long run.

“The old adage is desperate people at desperate companies do desperate things,” Kavanaugh says. “It doesn’t make you happy at the time that some of it is going on. But those types of business practices and behaviors are normally very short term. You can’t let them pull you down to react at their level.”

Keep talking about it

Backing up your words with action is an effective way to convey a message such as your core values. But you still need to make a continuous effort to remind your people about what your company stands for.

“It has to be something that is led from my position, and it needs to be led with a level of passion and overall commitment to the entire organization,” Kavanaugh says. “For it to really work, it needs to be delivered on a daily basis by the management team and the employees all throughout the company.”

Just when you think you’ve told your employees about your company’s core values enough, try telling them one more time.

“You have to do it to a point where people are almost like, ‘Oh, my goodness, I’m tired of hearing him say this,’” Kavanaugh says. “Well, you know they’ve got it. It’s like business concepts and values. It’s one thing that they understand it. It’s another thing that they are executing it.”

Communication means nothing, even if your employees understand what you’re telling them, if they don’t put the values into practice in their daily behaviors.

To help make this happen, WWT integrated its core values into the employee assessment process. Employees are measured not only on how they perform relative to their job and their specific job requirements but also on how they measure up to the core values.

“Are you a team player?” Kavanaugh says. “Do you have the work ethic that we expect? Do you deal with people with integrity and respect? The five core values that we have, those individuals are assessed on their core values just like they are assessed on their job requirements.”

The core values are regularly communicated through corporate updates and in meetings that are held across the organization. It’s something that is always at the core of what the company is doing.

“We’ve tried to be very clear about what our value system is all about,” Kavanaugh says. “We’re not about going in and if somebody makes a mistake on the job or a bid or a quote, we’re not going to be happy about it, but we’re not going to come in and fire somebody over that. We want to talk to them about what we expect and how we’d like to see them improve.”

By integrating them into as many modes of communication as possible, you keep your core values front and center in the minds of everyone in the company.

“It has to be something that you are very aware of and committed to day in and day out,” Kavanaugh says. “Great companies all of a sudden become mediocre companies because they take their eye off the ball.

“You link it to the assessment process, and you link it to the goaling process,” Kavanaugh says. “It starts at the executive level, and it needs to roll all the way up and down throughout the company so that they are all linked and they all understand the importance of the value system.”

Stay focused

The problem that many companies have is that they draw up the values, and then don’t know how to get their employees to buy in to them.

“They haven’t thought through how they are going to actually make it stick and get it to be completely integrated and proliferated throughout the organization,” Kavanaugh says.

All of your hard work to build a foundation of values can be for naught very quickly if you take your foot off the pedal once the initial development of values is complete.

“The CEO has to be passionate about pushing this on a very regular basis,” Kavanaugh says. “The organization is looking for that individual to be the driving force behind the value system of that culture. When that individual starts to take his eye off of it and it doesn’t seem to be important anymore, that is quickly reflected in the attitude and actions of employees.”

It doesn’t have to be a lot of work to do it.

“It’s how you act and treat people,” Kavanaugh says. “They have to be able to see and feel that you are passionate about these things. If they don’t and they think it’s lip service, you’ll never get the benefit of implementing something like this.”

Kavanaugh tries to assess the importance that his employees place on the company’s core values through different means.

“It’s something that we want to use and should be using consistently as a tool to recruit, manage, motivate and retain employees — and also to terminate. It’s a tool to help them do those things as we manage our culture, new and departing.”

When you lay a foundation of how to act and follow through in living by those values at the top, you set the tone for the rest of the company.

“It makes it a lot easier for people to make decisions because it’s pretty clear to them what they should and shouldn’t do,” Kavanaugh says. “They don’t spend a whole lot of time debating, ‘Whoa, should I do this or shouldn’t I do this?’ It’s pretty clear.”

Employees are using the values to make choices at WWT, and it’s paying off. Revenue reached $2.5 billion for 2007, up from $1 billion in 2003, and the company now has 1,100 employees.

“A lot of people are asking us, ‘How do you continue to grow and add to your employee base at a very challenging time?’” Kavanaugh says. “The performance has been extremely strong from our employees because of the level of teamwork and execution they have demonstrated that is helping us to work right through this bubble.

“When you make decisions that are consistent with your value system, people see that you are very serious about that and they get it and understand it. If you start turning your head, that’s when all of a sudden it becomes paper and it has no meaning. It’s critical that you really have the discipline and the rigor and accountability throughout the organization that people are going to hold people accountable to that expectation of how they should act, work and treat other people.”

HOW TO REACH: World Wide Technology Inc., (314) 569-7000 or www.wwt.com