This blog was written by Tariq Kassum, COO of Obsidian Therapeutics, as part of the From The Trenches feature of LifeSciVC.
Early in the morning of April 24, 2018, I woke with a knot in my stomach because I knew that a tough negotiation – perhaps the most challenging of the year – lay ahead. In a few hours we would determine the future of Obsidian Therapeutics. We had to get it right. I rubbed my eyes wearily and hit the gym to chase the butterflies away. Not even a series of lung-curdling sprints on the Concept 2 could alleviate the tension.
We had rented a conference room downtown to provide a neutral environment. I arrived early to make sure the snacks and whiteboards were in place, and I fussed with the A/C to prioritize alertness over comfort. Things were about to get real.
My colleagues entered. We sat down, took stock of each other. Time to begin.
“Okay,” said our CEO. “Let’s define our corporate values.”
But First, Values
Many biotechnology companies establish their core values early as a key activity in company-building. Cheerleaders herald values as a panacea for corporate culture. Skeptics consider them a worthless extravagance.
Myself, I’m a recent convert. Over the past year I’ve made a 180-degree shift from being a values-skeptic to a true believer. In this blog post I’ll share with you the reasons for this turnaround, as well as the process we went through to define a great set of core values for Obsidian. Since we’re all evidence-based scientific professionals, we’ll start with a spin through the history of corporate value statements and what’s known about their benefits.
A Revolution in Print
The values movement started in the 1990s. It really kicked off with the publication of Jim Collins’s and Jerry Porras’s Built to Last: Successful Habits of Visionary Companies, a seminal text in the often-purchased-but-never-actually-read business book genre. Collins and Porras identified a series of successful companies considered ‘visionary’ and sought to reverse-engineer what made them great. Among other attributes, they noted that many of these companies had defined a series of core values that were durable across time and also set an ethical foundation for the company’s business activities.
This was the catalyst that sparked a revolution. Companies across the world started defining values as a way of linking core principles to their workers’ daily routines. Managers swore by them; Anne Mulcahy, CEO of Xerox, said at the time that corporate values “helped save Xerox during the worst crisis in our history.” Today, most Fortune 500 companies proudly trumpet their values on their websites.
Built for Last (Place)?
However, it has proven extraordinarily difficult to measure a positive effect from values statements. Many of the companies in Collins and Porras’ own sample of high performers started running into trouble shortly after Built to Last’s publication. Other researchers have attempted to measure a Return-on-Values effect with little success. A group in Brazil looked at Latin American financial services firms and found no relationship between corporate performance and actual practice of strong corporate values, which is particularly discouraging. A team at INSEAD did manage to correlate the number of espoused corporate values and stock performance, which suggests that we should all write really long values statements.
But the values revolution keeps rolling, and in many ways it has become a parody of itself. One team identified 52 companies whose stated corporate values on their website were directly cut-and-pasted from published values statements of Dow Jones Sustainability Index companies. Another team analyzed the values statements of FTSE 100 companies and noted that Integrity, Respect, and Innovation were the top three core values, claimed by 35, 29, and 24 companies, respectively. The language also gets more and more tortured; our friends at scientific publisher Reed Elsevier have coined the word “boundarylessness,” which I suppose has the benefit of being memorable.
A Skeptic’s Starting Point
My skepticism about corporate values was based in part on the excesses of the values movement, but also on my own experience. My former employer, a large pharmaceutical company, had implemented a complex mixed values / ethical framework illustrated in a wordy mandala that I found difficult to decipher. In my experience, the company’s core practices were highly variable from site to site and therefore uncapturable by any specific values statement. I also never understood how values could be enforced, given wide differences in how they could be interpreted across organizations, not to mention cultures.
At Obsidian, we didn’t define any corporate values in our first two years of existence since we had organically developed a strong unwritten company culture. We were reluctant to mess with what we had. But it became clear to us that this hands-off approach was unsustainable as we continued to grow. How could we guide decision making as the organization got bigger? How would we model behavior for new hires? And how could we make sure our culture didn’t start to evolve in the wrong direction?
What it Means for Us
I discussed these challenges with peers in leadership positions across the industry. I heard time and time again that company values were critical to growth. As I dug into the topic further, I learned that corporate values are incredibly useful to a startup, far more so than to Fortune 500 companies. And that is because they help manage growth.
When a biotechnology company is first formed, the founding team can define, model, and practice behaviors with great fidelity across the organization. That’s not due to any particular skill on the part of the management team – that’s because the organization is tiny. When you only have five people, modeling great behavior is relatively easy. There aren’t any nooks and crannies where bad practices can hide. But, as we all know, things change when companies grow.
One of my core beliefs as a manager is that in healthy organizations, people at all levels should be empowered to make independent decisions. In a growing company, where people need to adapt to circumstances and to a changing organization, this is doubly true but also quite challenging. Like a tree adding rings, each successive layer of the organization gets more and more difficult to reach from the founder / management core. How do you ensure decisions are made from the right perspective? How do you ensure that your company’s vision is consistent? How do you ensure that norms of behavior are established and managed appropriately?
By defining your core values early on, you take advantage of the founder effect. You get an opportunity to inoculate your organization early in its life with great behaviors, like those that Bruce outlined last year, rather than applying them later. No, the benefits are not quantifiable, nor will they ever be. But if you set the ground rules, and live by them (important), you can be confident that as your company grows you won’t stray too far from the original vision.
After learning more about the topic I realized we needed to be more open-minded; so, working with our management team, scientific staff, and external consultants, we embarked on a collaborative, iterative process to design a values statement.
I knew that we could damage our company if we screwed up the values definition exercise. We were already nearly twenty employees and we were coming to the values process quite late. A healthy company culture already existed but it was very unclear to me how we could lock the good stuff into sentence format. What if the management team had divergent impressions of what had worked? Or what we needed?
Thankfully, we worked with an experienced HR consultant to design a values definition process that was streamlined and inclusive. In the weeks leading up to our values summit, she had gathered feedback from the entire company in a series of roundtable meetings. She then distilled the feedback into key thoughts and themes, which she shared with us that morning in April. Our job was to review these points, edit and prioritize them, and then use them to create values statements which would then be recirculated for review from the broader team.
We designed the process to be a dialogue between management and staff. Some commentators argue that the values discussion should be purely top-down since management needs to impose its vision onto the company. I don’t buy it. While the process shouldn’t be entirely consensus-driven, it’s critical to get buy-in from the broader organization since that’s where the work is actually done. Also, a startup is generally small enough where this sort of thing is feasible.
That morning we reviewed our staff’s feedback and we were relieved by what we saw. We had a team that loved their work, that was energized by the possibility of making a difference, and that enjoyed working together. And as a management team, we were aligned with the themes that were identified. Ultimately the trickiest part of the discussion was picking the best stuff and then adapting it into a format that we liked. We had several rounds of negotiation-by-committee over the wording. Eventually, we narrowed it down to a semi-poetic series of sentences that resonated with the team.
The final step of the values-creation process was to share them. So, a couple of weeks later, after further reflection and some tweaks around the edges, we presented our values statement to the whole company to positive feedback. I’ve pasted them below so you can see where we ended up.
We’re now in the process of incorporating these values into our office décor, but more importantly, we are using them in our day to day lives. We’ve already used our definition of values to finalize several tricky HR decisions. We are implementing a new performance management system with a strong “living our values” component. And as we think about future business development opportunities (a topic near and dear to my heart), we now know which aspects of the company’s culture we will seek to preserve, no matter what the deal structure.
Drivers of Value(s)
That’s the story of how I became a convert to corporate values. They can be very helpful if you are in the right kind of company, have a realistic understanding of what they can do, and go about defining them in an inclusive fashion. I’d recommend the process we used as it was simple and efficient. And within a short period of time the values we wrote have already proven themselves to be highly useful. In a couple of months we’ll have them plastered up on our walls, so please do be boundaryless and come by to check them out.
Obsidian’s Core Values
How Do We Treat Each Other?
- With transparency and integrity
- With respect and kindness
- With playfulness and joy
How Do We Do Our Work?
- With collaboration as a team, helping each other succeed
- With commitment to truth and to finding the right answers
- With resilience and adaptability when facing challenges and complexity
Why Do We Do This Work?
- Because we believe our science can transform lives and improve our world
Thanks to Dina Keratsis, Mike Gilman, and Virginia Dean for their suggestions and input.