Imagine a conservative British Prime Minister denouncing a powerful British mogul as "the unpleasant and unacceptable face of capitalism." No, it wasn't David Cameron excoriating Rupert Murdoch, the media baron, after reports that his company had bribed police officials to get at tawdry information. It was Edward Heath, back in 1973, denouncing Rowland "Tiny" Rowland, the mining baron, after reports that his company bribed African leaders to get at their country's resources.
Everything old really is new again. There's been plenty of commentary on the sorry spectacle of James and Rupert Murdoch, their cringeworthy appearance before a parliamentary panel, and escalating reports of abysmal behavior inside their company. This scandal is about money, power, and poor governance. But what it's really about is Murdoch Family Values -- the kinds of behaviors that were celebrated inside News of the World, News International, and News Corp. itself, the sorts of leaders who were praised, promoted, and paid handsomely.
Is there any doubt that Rupert Murdoch's people basically behaved the way he wanted them to behave (other than getting caught)? Are we surprised by what's been unearthed thus far, especially since, as David Carr reported last week in The New York Times, News Corp. "has paid out about $655 million to make embarrassing charges of corporate espionage and anticompetitive behavior go away" in prior episodes.
The most eye-opening of Carr's many examples was an effort by a division of News Corp. to derail a competitor in the advertising business by hacking into its computer systems. After settling a lawsuit over the behavior, News Corp. bought out the company it hacked -- and named Paul Carlucci, the head of the unit that did the hacking, to become publisher of the New York Post!
To summon the spirit of Edward Heath, this is the face of business at its worst. But Murdoch Family Values aren't the only values that drive business. Last week, as the eyes of the world were focused on the trials and tribulations of an old-line entertainment mogul, a presentation by a new-wave entertainment innovator were making waves as well. Both Business Insider and Slate.com highlighted a 126-slide PowerPoint presentation by Reed Hastings, founder and CEO of Netflix, that explains the company's management philosophy and culture. The contrasts with News Corp. could not be more dramatic. This is the face of business at its best, even if customers debate the latest wrinkles in the company's pricing policies.
"Values are what we value," Hastings declares in his presentation, and values "are shown by who gets promoted, rewarded or let go." Actual company values, he continues, "are the behaviors and skills that are valued in fellow employees."
He then goes on to articulate the nine core values that Netflix values, and offers plain-spoken definitions of those values. Here are some of them:
Judgment: "You identify root causes, and get beyond treating symptoms."
Impact: "You accomplish amazing amounts of important work."
Curiosity: "You learn rapidly and eagerly...and contribute effectively outside of your specialty."
Courage: "You say what you think, even when it is controversial."
Honesty: "You only say things about fellow employees you will say to their face."
The ultimate goal at Netflix, Hastings says, is to build a great place to work. But a great place to work isn't about free lunches or weekly massages. A great place to work is about "stunning colleagues," an organization filled with people who bring out the best in themselves and in everyone around them. Which is why the company refuses to tolerate what it calls "brilliant jerks." The best managers, Hastings argues, "figure out how to get great outcomes by setting the appropriate context, rather than by trying to control their people."
It may sound soft, idealistic, naïve. But Reed Hastings and his colleagues have built a fast-growing, high-performing company whose business results put to shame the results delivered by News Corp. The Murdoch family may play rough to make money, but they haven't made much of it for shareholders of late. Back in November 2004, the company's stock was trading at $18 per share. It's now at $16. Back in November 2004, Netflix was trading at $10 per share. It's now at $280.
The lesson: If you want to create long-lasting value in the marketplace, you've got to embrace human and humane values in the workplace. What values do you value -- and what behaviors do you reward to bring those values to life?
Reprinted from Harvard Business Review