We, Incorporated

If anyone, Google would seem likely to make that connection. It is famous for pursuing great technology -- both because there's money to be made and because great technology can make the world better. The "letter from the founders" in its initial-public-offering document was adamant about values: "Don't be evil. We believe strongly that in the long term, we will be better served -- as shareholders and in all other ways -- by a company that does good things for the world even if we forgo some short-term gains."

Yet even at Google, linking value and values can be complex and painful. In early April, some troubling emails began trickling in. Someone had noted that, when he searched for the term "Jew" on Google's search engine, the first result was for an anti-Semitic site called Jewwatch.com.

The search result surely was alarming -- cofounder Sergey Brin, among other Google execs, is Jewish, and the notion of abetting a hate site was abhorrent to everyone. But Google's brand, and so its commercial success, depended in large part on the "purity" of its search technology. It had become an article of faith at the company never to mess with the results that the algorithms delivered.

And so, Jewwatch.com remained atop the search results. But Google also inserted its own link to a page that apologized for the "upsetting nature of the experience" while explaining why it was sticking to ideological neutrality. It was an admirable solution, one that appeared true both to Google's values and to its economic well-being, and Smith applauds Google for taking the Jew Watch question seriously.

One thing bugs him, though: Google actually knew about the Jew Watch result as early as three years before the public flap. Why didn't it act then? "It was a nonissue," says a spokesman. "We didn't post an explanation because no one was searching for it." If no one notices the problem, in other words, then there's no problem.

But "if our communities are only reactive," Smith notes, "where does that leave us?" As consumers, we must rely on the judgment of companies and their employees when we use their products and services. If they act on moral values only after we notice something wrong, they fall short of their responsibility as political communities. "I don't think that's good enough," Smith says.

What is, then? In a world of purpose, Smith says, organizations must actively blend value and values to sustain competitive advantage. He isn't talking about a "balanced scorecard," where dedication to social and environmental goals merely serves financial performance. Rather, value and values feed each other: Employees deliver value to customers, who create returns for shareholders for providing opportunities for those employees. Smith calls this the "ethical scorecard."

It's up to employees to participate in defining the blend of value and values a company promises and delivers to customers. Employees must work together to communicate to investors and analysts how that blend sustains performance. And employees need to help shape the learning that will foster individual and shared success.

There's a construction crew, for example, that's based in a barn on Smith's property. (It's a symbiotic relationship: They get the space discounted in exchange for work on Smith's house.) Most of the eight men have worked together for at least eight years; the newest member joined up three years ago.

The men come from different places and have different interests. But on the job, says boss Chip Hoagland, borrowing Smith's language, "we have shared paths." Those paths coalesce around important values: respect for one another, a willingness to take on different tasks, and working hard.

And one more: "We have a collective interest in doing a good job and in getting the next job." The crew understands acutely that their reputation as a group, their brand, drives their long-term economic security. "Every day you work on a job," Hoagland says, "you're one day closer to being unemployed. So good work, and good values, keep us all employed."

The crew has embraced Smith's ethical scorecard: Value and values form a virtuous circle. One can't exist without the other. So can Shell or Google comprehend that relationship the way an eight-man construction crew does? Can business organizations effectively come to terms with their new roles as political communities?

And can we? As much as the problem resides in organizations, the solution is for us to find. As Smith writes: "Who will guide organizations to adopt and implement such strategies? Who is responsible for the choices organizations make about value and values, and how those choices get communicated in markets and networks?

"The answer is obvious. We are."

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