Leading with values, not money

When Luck Companies decided it was time for such a thought shift, it wound up changing the company’s culture in a way none of the company’s leadership could have predicted. 

Luck, a Richmond-based mining and construction company, went through a period of rapid growth in the 1990s, but the growth wound up being too much of a good thing. Study after study and consultant after consultant failed to fix the issues that stemmed from the expansion. 

“We had a real command-and-control environment,” said Tom Epperson, leadership development manager at Luck Stone Corporation, a Luck subsidiary. “People at the top would say to go do things and we would go and do it. We had a period of rapid growth where we basically tripled in size, and we could no longer use that approach, so we decided to decentralize the business.  

“When we did that, all hell broke loose. The culture started to come apart at the seams. People started to fight over resources, and people in different locations would make decisions in different ways. The organization got political in a hurry. Even though we were financially successful at the time, it was not a pleasant place to work.” 

Luck found a way to fix its problems in Values Based Leadership (VBL), a philosophy that President and CEO Charles Luck IV learned from business legend Ken Blanchard. The shift to VBL was both simple and incredibly complex as Luck leadership worked on transitioning the company’s entire culture. In a presentation to CPA firm leaders at the VSCPA Top Firms Roundtable on Sept. 29, 2014, Epperson detailed how Luck used VBL. 

“When we started to work on our values and our culture, good things started to happen,” Epperson said. “Financially, it helped our numbers. We saw increases in things like our levels of customer service. We saw improvements in our safety record. People were more engaged at work and felt better about working here.” 

TURNING COURSE TO A NEW PHILOSOPHY 

Luck’s VBL website describes the philosophy as “living, working and leading in alignment with your values, principles and beliefs to in turn ignite the extraordinary potential in those around you.” Epperson likes to cite Gallup polling figures that state: 

• 20 percent of the U.S. workforce are engaged in their work 
• 60 percent are “in neutral” 
• 20 percent are actively disengaged 

The aim of VBL is to increase that first number as much as possible.  

“When you can find an organization that aligns with your core values and primary beliefs, you’re going to be happier,” Epperson said. “The more decisions you can make that align with your authentic self, who you are, the better work you’re going to do.” 

The true test of VBL for Luck came with the 2008 economic downturn. As a company with interests in the construction industry, Luck was hit especially hard by the downturn, but the company’s core strengths allowed it to weather the storm. 

“Basically two-thirds of our business evaporated in six months,” Epperson said. “Funding dried up. Resources dried up. Our ability to get capital dried up. It got bad in a hurry, and we weren’t any exception to that. We were fighting to keep the lights on. We felt like, looking back, it would have been a lot worse had we not done all this work on the culture and the leadership.” 

At the same time, Charles Luck IV was going through a period of personal turmoil. His mother and sister were diagnosed with cancer, and he developed an illness of his own that kept him bedridden for six months. With half a year to think, Luck’s thoughts took a philosophical turn, both inward and outward. He emerged from his illness with a fresh set of ideas about the future of Luck Companies. 

“He had a lot of time to think about why the company existed and why he was on the earth,” Epperson said. “When he got back, he charged us with trying to make a difference in the world. Making money’s not enough. It’s our sweet spot, but at the same time, leaves something on the table. We can do more than just print paychecks.” 

That led to the next phase of the company’s VBL journey. By 2010, the philosophy had taken root and expanded, and company leadership decided it was time to take the ideas out into the community. Part of that was done on a case-by-case basis, with Luck employees assuming leadership roles in the community, but part was more formal. The company founded the Luck Institute for Values-Based Leadership, a nonprofit aimed at spreading the philosophy. 

“One reason engagement is what it is is that with these larger organizations, ethics kind of get blurred. You lose sight of right and wrong,” Epperson said. “You start making questionable choices, particularly the more you get focused on short-term results. One of the outcomes of VBL is really defining what your decision-making processes are. How do you make decisions that really align with your organization’s values?” 

CREATING MEANING FOR MILLENNIALS 

A major focus of the VBL ethos is answering a question asked by many millennials who have entered the workforce in huge numbers. Research shows that generation is motivated by the idea of making an impact, rather than making the most money possible. How does a company help fill that need for meaning? 

“In our for-profit business, we don’t always make the decision that’s going to make us the most money,” Epperson said. “We ask whether it will align with our integrity value.  

“We’ve walked away from deals, customers, permitting opportunities, because we would have to sacrifice our integrity value to get that business deal done. But our partners trust us more, the community trusts us more.” 

Those are statements that should resonate with CPAs, who trade on their professional integrity as much as their accounting credentials. 

“In the CPA world, your integrity is desperately important,” Epperson said. “People want to trust you. They want to know that you’ve got pretty high integrity, that you’re not going to just say ‘yes’ and tell them what they want to hear. That’s a strength that the CPA community can definitely capitalize on.” 

That search for meaning has the added benefit of appealing to the millennial generation, born between 1982 and 2000 and currently entering the workforce in droves. In addition to being motivated more by meaning than by sheer financial clout, millennials are also notable for their job-hopping tendencies. 

“They were the dotcom boom babies …They’ve seen a rapidly shifting world as far as security goes. So you see millennials focused on creating meaning. They’re going to have between seven and 25 jobs in a lifetime, so chances are they’re not going to be especially loyal to that work. So it has to be meaningful work.” 

And the generation right behind the millennials, the so-called “Generation Z,” will pose an entirely new set of challenges and opportunities for forward-thinking leaders. 

“Imagine kids who never learned how to write in cursive. They barely know how to print,” Epperson said. “You talk about millennials being digital natives, and these kids are even more connected. These kids will never be lost as long as they have a cell phone. They’ll never have to own a book unless they want to. They can go to Google and find the answer to any question in the world.  

“These kids are going to be hitting our workforce in the next several years, so how can we stay ahead of the curve on that, and how can we take advantage of this new skill set and this new set of values that Generation Z is bringing with them? How can we take advantage of this expectation of and comfort with technology, this high rate of multitasking and this approach to work?” 

The beauty of VBL is that it can help inform decisions that crop up thanks to changes in the workforce or the market. It’s an ethos that can help define a company’s mission, its priorities and its future goals. 

“Years ago, Harley-Davidson®, when they were trying to turn around their business, came up with the idea of freedom with fences,” Epperson said. “The fences were the organizational values, but inside those fences, you could make any decision you wanted.  

“You can’t make a decision for your whole workforce. When you’re dealing with clients and the world, you need a way to make decisions within your organization’s values. If you can get that, you’ve got your arms wrapped around a lot of what you need to solve.” 

Learn more about VBL at www.valuesbasedleader.com.