Governing by rules allows those at the top to believe they can control the actions of those below.
Leading from values, though, shifts the responsibility for decision-making to employees. Values are like trust: They empower people to honor or betray you.
Shifting power to people may seem dangerous, but it can ultimately make an organization more powerful.
An example: Boeing was rocked by a mini-scandal when its president and CEO, Harry C. Stonecipher, had an affair with another employee. The company could have changed the rules right then and there to restrict certain types of relationships between employees.
Instead, Boeing did something more interesting. It enforced a value.
Lead director Lewis Platt sent out communication to the world that stressed how important it was for the CEO to have “unimpeachable professional and personal behavior” to safeguard the reputation of the company.
His message was clear: Employees understood that part of their jobs was to bring the company positive repute, and that integrity was a core Boeing value. Reputation and integrity are both so core, in fact, that even the CEO would be fired for sullying either.
As a result, Boeing gained alignment with its workforce, which could now internalize this value. While the proclamation was seemingly less direct than a rule, it was more powerful.
— Adapted from How, Dov Seidman.