Identifying shadow values can help HR understand what is driving staff behaviours and decision making, says The Ethics Centre’s director of innovation, John Neil.

When we engage in work to understand an organisation’s culture, our go-to tools are often employee surveys, pulses and 360-degree reviews. 

They can all be enlightening, says John Neil, The Ethics Centre’s director of innovation. However, they don’t tell the whole story.

Neil believes an organisation’s ‘shadow values’ are better indicators of the attitudes of its workers and leaders. They are, by definition, more difficult to identify than the attitudes of workers gauged by self-report, but Neil says they can be even more relevant.

“To put it another way, there are really two fundamental aspects to an organisation’s culture,” he says. “There are ‘above the line’ elements: the visible, the identifiable, the self-evident. And then there are ‘below the line’ elements, which are less visible, more implicit, and not so easy to identify. The latter are shadow values and principles.”

These shadow values are ideas and beliefs that workers and managers might not identify in staff surveys or performance reviews, oftentimes because they are not aware of them.

“Shadow values are implicit,” says Neil. But the benefits of identifying shadow values can be significant.

“Being aware of them is a really key part of better understanding what drives individual employees and the organisation’s culture as a whole.”

Shadow values: positive or negative?

Although the word ‘shadow’ has negative connotations for many, Neil is quick to stress that shadow values are not necessarily a bad thing.

“In fact, they can be positive, neutral or negative,” he says. “Each plays a role.”

He gives the example of a large financial services company whose CEO asked The Ethics Centre to evaluate the organisation’s culture.

‘“One of the very positive shadows was the principle of putting members first,” says Neil. “So, if staff had no clear information or instructions about how to respond to a situation, they would apply this principle and act in the member’s best interest.”

‘Putting members first’ was not codified as one of the organisation’s corporate principles, but it was widely held throughout the organisation, says Neil. “It’s an incredibly powerful and positive shadow value.”

However, many shadow values do have negative impacts. Neil cites another Australian company at which ‘harmony’ was a strong shadow value.

“Being harmonious and keeping the peace was something that everyone held to, and while it could be positive, it had negative dimensions as well.”

Striving for harmony impeded individuals’ ability to make decisions and to have difficult conversations. “They avoided those conversations,” says Neil. “They tended to over-consult, so decision making was slow.”

One of the company’s strategic challenges was to be more agile and responsive in the face of changing market conditions. But the shadow value interfered.

“The decision-making model was a consensus based one and tended to include everyone,” says Neil.  “As a result, people would defer accountability for making decisions, and therefore decision making was unwieldy and bureaucratic. The shadow value was a major impediment to building a culture in which people expressed their actual views.”

How can HR identify shadow values?

Because they are implicit, Neil says there is no standardised method for identifying shadow values. But he says re-thinking our ideas about company culture can help us become more attuned to them.

“We need to recognise the limitations of the existing approaches to understanding culture, such as staff engagement surveys,” he says.

“Those methodologies are only as good as the psychological safety in an organisation and the employees’ belief that their contributions to those surveys are going to make a difference.”

If employees feel safe and valued, they are more likely to provide the sort of open feedback that can get us close to identifying shadow values.

“There also remains a need to recognise the strategic significance of culture,” says Neil. “Culture is integral to the success of a company. It’s the backbone of delivering on an organisation’s strategy.”

In the past, he notes, culture was relegated to secondary status. “That’s changed over the years. But there is still, I think, a general lack of recognition of how important culture is in achieving and delivering on strategy. Culture goes much deeper than ‘engagement.’”

By giving culture the attention it deserves, we can shine a light on shadow values. “Using that knowledge, we can improve outcomes both for individuals and for organisations.”

John Neil is one of many inspiring speakers lined up for AHRI’s  Convention Transform 2021.
Book your pass before registration closes on 9 August.