Managing by Values is a book the focuses on the idea that the usual metrics used to measure the performance of a company such as return on investment, return on assets, Price to Earnings Ratio, and dividend growth do not provide any information about the values the company uses to guide its actions. This book looks beyond financial performance; it looks at management practices and how they contribute to or constrain companies from taking actions that benefit the company's stockholders and stakeholders.
The authors make the point that a values based organization is no longer a matter of choice for companies and other organizations. They argue that adopting core business values that become the basis for strategic business decisions. These same values can be used throughout the organization in making tactical and operational decisions that are also critical for the success of the organization. The last five years of history in corporate America is full of examples of ethically inappropriate decisions based largely on greed and ambition. When the lack of consensus on a company's core values was combined with uninspired leadership and a dose of accounting fraud it resulted in the largest bankruptcies in U.S. history. Investor and creditors lost billions of dollars when companies including Enron, WorldCom, Global Crossing, and Adelphia, and Arthur Anderson and Company filed for Chapter 11 bankruptcy protection because of a lack of both values and leadership. In each case, the missions and values articulated by these companies did not match the actions of their senior managers.
The process envisioned Ken Blanchard and Michael O'Connor begin by creating a mechanism to help companies articulate their corporate values, and to help the company's senior executives to define their own personal values. Once this has been accomplished, Blanchard and his team envisioned that senior executives would address and reconcile
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