Leadership & Management

Leading With Values: When Good Intentions Aren’t Enough

If we create good institutions, then we can live up to our good intentions.

May 15, 2024

Knowing and articulating our values is essential. But when the metaphorical Siren’s song fills the air, is knowing our values enough to ensure that we actually live by them?

For Ken Shotts, the David S. and Ann M. Barlow Professor of Political Economy, this is a critical question: How do we guarantee that we will act in accordance with our values, especially when it becomes difficult to do so? Many assume that defining values is sufficient to keep people on course, that “because of our commitment to the mission,” Shotts says, “we will weather the turbulent storms and the things that tempt us to go against our values.” But, Shotts admits, “I don’t think it’s enough.”

Shotts discusses leadership and values in this episode of If/Then: Business, Leadership, Society. His assertion: If we create good institutions, then we can live up to our good intentions.

Institutions and Accountability

According to Shotts, there is no shortage of business leaders who espouse positive behavior within their organizations and positive societal impact beyond the walls. “It’s something that business leaders talk about their companies having, in terms of effects on society as a whole,” he says. However, having stated values is not the same as actualizing them through concrete policies and practices. For that, Shotts says, “We need those binding institutions to help us live up to those intentions.”

So what exactly are these “institutions” that Shotts refers to? At the organizational level, he defines them as “the incentive structures and the informal norms and authority” that leaders put in place. This includes tangible elements like compensation systems, promotion criteria, performance monitoring, and more. It also encompasses the unwritten cultural norms and actions that a company either celebrates or condemns.

On a broader scale, institutions such as regulatory bodies, laws, and civic organizations can provide the guardrails that ensure businesses create positive impact. As Shotts puts it, “If you want to have the world be a better place, you need to have the things that channel [business] in ways that make it a better place.”

As evidenced by the ancient heroes of Greek mythology, resisting the distracting Siren song requires more than just noble intentions. It demands a combination of inspirational leadership and intentional reinforcements and constraints.

If/Then is a podcast from Stanford Graduate School of Business that examines research findings that can help us navigate the complex issues we face in business, leadership, and society. Each episode features an interview with a Stanford GSB faculty member.

Full Transcript

Note: Transcripts are generated by machine and lightly edited by humans. They may contain errors.

Kevin Cool: If we create good institutions, then we can live up to our good intentions.

Adrienne Mayor: The Son of the Sirens was said to be so beautiful that sailors would leap into the sea and drown themselves or dash their ships on rocks trying to get closer to these beautiful women who were singing these lovely, ethereal melodies.

Kevin Cool: Adrienne Mayor is a classic scholar at Stanford. She says there are two very different stories of the myth of the Sirens Song.

Adrienne Mayor: The oldest story we have is Jason and the Argonauts. Some people that might even be older than the story of the Trojan War and Odysseus. So Jason and the Argonauts head off in their ship, the Argo, and they have been warned that there will be dangers at sea. And one of the worst dangers is posed by the Song of the Sirens. So Jason planned ahead. He invited Orpheus to join his expedition specifically to counter the peril of the Sirens. And Orpheus, of course, is the legendary musician, brilliant singer, lyre player. And his melodies — people said they could entrance birds, fish, wild animals, rivers, streams.

And Jason ordered Orpheus to start playing and singing as they were passing the rock of the Sirens.

Kevin Cool: Jason’s plan was to keep his crew on track with a song even more beautiful than the Sirens. The other famous story about the Sirens, the one that most people know, is from Homer’s Odyssey about Odysseus, or his Roman name Ulysses, and his men who returned from fighting the Trojan War.

Adrienne Mayor: They’ve been at sea for ten years trying to get home after that war. So as they near the rocky islands of the Sirens, Odysseus had his men block their ears with beeswax. And then Odysseus himself ordered his men to tie him to the mast so that he could hear the Song of the Sirens. He wanted to hear that song, but he wanted to make sure that he didn’t jump in the water or succumb to the dangers. And he told his men, “Don’t untie me, no matter how much I beg you, until we’re clear of the danger.”

Kevin Cool: Like Jason, Odysseus also sailed safely past the Sirens. But Adrienne says the two stories reflect differing approaches to dealing with human behavior.

Adrienne Mayor: I think both [of these] taken together are very interesting because the credible commitment, binding yourself to the mast, really is so different from the proactive defense with the secret weapon of Orpheus.

Kevin Cool: Many organizations have stated missions they set out to follow. But for leaders trying to keep people on that path, is it better to inspire the way Jason did with he music of Orpheus, or is the Odysseus way more realistic, to create the kind of structure that shielded his men from the Sirens’ Song. This is If/Then, a podcast from Stanford Graduate School of Business, where we examine research findings that can help us navigate the complex issues facing us in business, leadership, and society. I’m Kevin Cool, Senior Editor at the GSB. This episode, we speak with Ken Shotts, Professor of Political Economy and coauthor of the book, Leading with Values. The focus today: If we create good institutions, then we can live up to our good intentions.

Ken Shotts: I think there’re different myths that people sort of rely on, often implicitly. So I think there’s a tendency to think of, especially in Silicon Valley and especially in the United States, to think of the myth of the heroic individual who always does the right thing all the time. But some people think of the way that we should do this is we should get everyone on the same page, totally aligned in terms of our values. And because of our commitment to the mission, we will just weather the turbulent storms or the things that will tempt us to go against our values.

And that’s like the Jason and the Argonauts way of dealing with the Sirens’ temptation, right? It’s a story of inspiration. And I think inspiration is really important for a lot of organizations. I don’t think it’s enough, actually. I think there’s another story about how to deal with the Sirens, which is the Ulysses story of how to deal with the Sirens. And Ulysses is much less optimistic about human nature. He’s like, we’re flawed human beings. We’re not going to make it through unless I put wax in the guys’ ears, and I want to listen to the Sirens, so we’ll tie me to the mast. And that’s how we’re going to navigate this, and that’s how we’re going to deal with those temptations to go against our values.

And I think there’s tendency — and I have friends who like to talk about things is it should be all about inspiration. That’s what’s going to get us to do the right thing. But I also think we need those binding institutions to help us live up to those intentions, actually.

Kevin Cool: So the framing for our conversation is around good intentions and the reason to have good institutions.

Ken Shotts: Mm-hmm.

Kevin Cool: Let’s talk about what we mean by good intentions.

Ken Shotts: Well, I think that good intentions are things that people have as individuals, and I think it’s things that business leaders talk about having for their organizations in terms of behavior within the organization, and it’s something that business leaders talk about their companies having in terms of effects on society as a whole. So there’re different levels that I think of when I think about good intentions.

Kevin Cool: And what kind of institutions are we talking about, and why are they so important?

Ken Shotts: Well, the institutions I have in mind really vary depending on the level of analysis. It feels a little bit odd to talk out institutions because I think, especially in Western cultures and particular in Silicon Valley, people tend to think of themselves as individuals. And I think what we know from psychology — and I say this, I’m not a psychologist by training, but I just have a lot of admiration for the research that people have done — is that we’re profoundly influenced by the context in which we’re operating.

And so then if you’re thinking about institutions, let’s think about what are the contexts that I put myself into? How do I interact with my friends? What are the work environments that I put myself into? And assuming that those things are going to have a lot of power on shaping me is kind of the individual level on that.

Kevin Cool: But institutions, with respect to organizations or even at the societal level, when I think of institutions, I think of the Supreme Court. I think of Congress. I think of whatever, the education system. Is the definition broader than that?

Ken Shotts: Well, I’ll separate it out at an organizational level and a societal level. So I think at an organizational level, if both the incentive structures and the sort of informal norms and authorities — so it’s both the formal and the informal aspects of the organization. And that’s anything that like the leaders of the organization are setting up. So that can include like compensation systems. It can include who is promoted, how you make those decisions. It can include systems that are used to monitor what our people are doing. So those are examples of institutions at an organizational level.

It also includes what’s celebrated in an organization. What’s honored and held up is this is what we’re about. At a societal level, I really think of institutions as being about a lot of things outside of companies. The way it’s within companies is if a company wants to deliver on stuff, it needs to set up its own organization to deliver on those things. But at a societal level, it’s also about some of the things you were mentioning, like legislative bodies, regulatory bodies, all those things that are government, and also civil society as well, but those things that place limits on and that can really channel the amazing productive, innovative, and efficient energies of capitalism in ways that are broadly beneficial for a lot of people.

And I think a lot of people in business sort of talk about it like, oh, this is just going to naturally happen. Just we’re going to go out and we’re going to make the world a better place is like almost a trope — it is a trope at this point.

But the idea is like, well, if you want to actually have the world be a better place, you need to have the things that channel that in ways that make it a better place.

Kevin Cool: Okay. You mentioned incentives a minute ago. Is that how these institutions exert influence on people? What’s the magic that happens that changes our behavior because of institutions?

Ken Shotts: Well, I’m kind of an economist by training, so I’m definitely a big believer that incentives have a lot of impact on things. And whatever is rewarded or punished by public policy or — there’s a lot of different types of incentives. And sometimes the incentives are a lot more financial. Some of the time they’re just straight up constraints and legal rules. And I think both of those types of things matter. But yeah, a lot of it at the societal level is largely about incentives.

Kevin Cool: How do organizations arrive at their stated values. Is that embedded in a mission statement, or how does that occur?

Ken Shotts: That’s a great question. And my colleague Glen Carroll does something great about this. He like reads — I don’t know, it’s mission statements or things like that from a lot of different companies or statements of their values. And a lot of the time, they’re sort of indistinguishable, and —

Kevin Cool: You mean between the companies.

Ken Shotts: Between the companies. You’d have like here’s a list of these statements, and here’s a list of companies. Try to match these with each other. And what happens when people try to match like the statements and the companies, it’s not clear how they mesh up with each other. So I think to have it be meaningful as a statement of our mission or values, it needs to be something that’s actually specific to the company. It’s not meaningful if it’s sort of generic, like we’re good. You know, there’re versions of we’re good. But it needs to be something that’s specific to the company.

And often that means it’s anchored in specific stories within the company about this is what people in this company have done that are aligned with those things that matter, that we say we really care about. So I think that’s part of it. And sometimes that comes from the leaders of the company. Sometimes that’s something that organically forms amongst the regular rank and file within a company. So there’re different ways that can come about. And often, those are statements of intentions, actually. A lot of the statements that you read on companies’ websites, those are statements about intentions. They’re not statements about, here’re the institutions that we’re actually going to use to deliver on those things.

Kevin Cool: You’ve anticipated my question because I wanted to know if I’m not part of the leadership, if I’m just a rank and file, how can I affect those organizational values?

Ken Shotts: That’s an important question because I think the reality is there are power differentials within organizations. And an ordinary rank-and-file person doesn’t have the same level of influence as the CEO does. But I do think it’s the case that there are times when people who are at various levels of the hierarchy in an organization have a chance to talk with and communicate with those who are above them in the hierarchy. And I think that’s one way of saying, oh, this is something that I care about. This is something that matters to me. And this is how I think we should be approaching that.

So that’s one way of doing that. Another way of doing that is by — and most people have people who work for them, or a lot of people have people who work for them, and by asking those people to live up to the standards that the organization claims to aspire to. And that also can be done horizontally with people who are at the same level. But some of the time, the option that people have is to say I’m in this organization, and what I need to do to succeed within this organization is out of step with my values.

And I think it’s always important for people who are at a point of good fortune where they have exit options and they’re not tied down to I have to have this job and I need it financially, but where they could choose to be somewhere else, to be always willing to do that, to say, well, this is just totally out of step with my values. I’m not going to do it. I can go do something else. And maybe I’m not going to earn as much. Maybe there’re going to be other sacrifices. But if that’s what it takes to actually live up to one’s values, sometimes that’s the only option.

Kevin Cool: You’re listening to “If/Then,” a podcast from Stanford Graduate School of Business. We’ll continue our conversation after the break.


Kevin Cool: So bring us down to the ground level. Okay, we’re talking about this in the abstract — intentions and institutions and values and so on. But on the ground, right, day to day or quarter to quarter, how does this play out?

Ken Shotts: One way that companies deal with this is to act as if there isn’t a tradeoff actually. Business leaders talk about this as if there’s not a tradeoff. So often when I’m teaching — and I find this very frustrating actually — people will make arguments of the form. [While] there was a temptation to do something that wasn’t quite the right thing to do for society as a whole, but if only we do this thing that’s going to be good for society as a whole, then we’re going to be fantastically profitable in the long run because of the reputation we’ve established for ourselves or things like that.

I think that is true some of the time, but it’s actually somewhat misleading, and it can be — and people could have principled disagreements about what direction you should go if there’s a tradeoff. Some people could have a principled argument that the business leaders should maximize long-run shareholder value, even if that means doing things that are bad for society as a whole, or failing to do things that are good for society as a whole. And other people could have a principled position that it’s the responsibility of business leaders not just to maximize long-run shareholder value but also to take into account other consequences on society. And I don’t think it serves anyone well to pretend that there are no such tradeoffs.

But I think if a company really cares about a set of stakeholders in addition to shareholders. And I don’t think they’re ever going to not care about shareholders. That would be inappropriate to not care about shareholders. But if they’re going to care about stakeholders other than shareholders, they need to say who those people are. And they really need to be careful about articulating this is the set of people that we actually care about. Here’re our principles that we’re grounding on.

Kevin Cool: So our employees, our community, whatever those might be.

Ken Shotts: Yeah, our employees, our community. We care about environmental impacts, you know. And a company could legitimately say we do care about that, or we don’t care about that. But then it’s like once a company starts saying they care about those things, then they should actually measure on whether they’re doing those things and reward people for delivering on those things. You know, if it’s really something that the company values, and those are real intentions and not just greenwashing or trying to make the company look good or something like that, then it’s important to measure it and to try to deliver on it.

Kevin Cool: Mm-hmm. So in any workplace, there are going to be groups of people who disagree about any range of topics. And we live in a particularly divisive and fraught environment right now if you think about the situation in Gaza or the election coming up. If you’re a manager in a company, what do you do to manage a situation like that?

Ken Shotts: I think the first thing to do as a manager is to think about things introspectively and how like I myself interact with other people to try to understand that, yes, I do have serious disagreements with some of the other people in my organization about things that are not trivial and to try to recognize that there may be some legitimacy in where the other people are coming from, even if I disagree with them. I think that’s the first — actually for us as citizens as well as managers and business leaders. And that doesn’t say I have to agree with them. Iti’s just to say I have to try to understand and seek what’s legitimate in what they’re saying.

But then the question is how to handle the disagreements amongst people within a company. And I think it’s a challenge that a lot of companies face. Are we going to take positions on lots of things, or are we not going to take positions on lots of things? And I think there’s an argument that — and this probably varies by company, but there’s an argument to be made that companies shouldn’t take positions on as many things as they do sometimes and that, when they do take positions on something, it should actually be very carefully grounded in their core values and principles.

Like people shouldn’t be surprised that this is the company’s position on a particular issue if it’s really coming from something deep within the company. So that’s one thing is like, does the company take a position on things? But then there’s the question about how to handle things internally within the organization. And I think it’s asking a lot of humans to ask them not to, when they exist within an organization, have personal views on a lot of contentious issues. Like I don’t think we can ask people to not be humans in that regard.

But I think companies could say, well, the norm here is that we discuss things, we discuss them respectfully and thoughtfully with each other. Or the norm here is we’re not mainly focused on that. We’re mainly focused on what the business is doing. And I think that’s a matter that different leaders could come to different answers for, depending on the nature of their business.

Kevin Cool: Where do values come from? And how important is it that the people around us know what our values are?

Ken Shotts: I think it’s crucial that the people closest to us know what our core values are. And I think in many organizational contexts, it’s important for people to know what the leadership’s values are. I’m in kind of an odd role as a professor where I think it’s not my role to come in and tell my students exactly what values they should hold, and I don’t always succeed at this. They probably seep in some of the time, but I try to teach my class in a way where it’s not like this is what I, Ken Shotts, think is the right thing to do about everything. It’s not the right role for a professor to have. The other question you asked is, where do values come from? And so this is interesting because, at the end of the class, we ask our students to write a statement of their core values. And so I see what they write in that. And I think for many students, they talk about sort of their personal life experience. So that’s one of the big things that people talk about. People talk about culture. A lot of students talk about religion. And it’s interesting because we’re in a place that’s sort of presumptively secular.

The conversational norms in Silicon Valley is everything is as if everyone is not religious. But there’re religious convictions that are driving their core values, and I think it’s appropriate to say this is where I’m coming from if someone is coming from a place of religious conviction in their core values. What’s interesting to me when I sat down to write my statement of my own core values, because we figured — Neil and I figured if we’re having our students do this — that’s my coauthor, Neil Malhotra and I, who also teaches the class — then we should do it ourselves.

And when I sat down to write my statement of my core values, I would’ve thought, ex ante, that I would’ve built it on the various philosophies that I had studied and maybe cultural traditions and things like that. Maybe that wound up embedded in there somewhere. But I wound up defining my core values in terms of the roles that I play. What is appropriate and what are my responsibilities as a member of this organization actually, as a teacher, as a citizen in this area, and especially as a parent and as a child and as a husband?

Those were the things that spoke to me most about what are my core values, which is not like a typical Western philosophical approach to thinking about this, but that’s how I wound up thinking about it.

Kevin Cool: Do you think it would be useful for other people to do that exercise, like to actually document and write down what your core values are?

Ken Shotts: Oh, absolutely. Yeah, I think it’s worth doing. Andi have some people who come into the class and they’ve done it before, and a lot of them have done it with their spouse or partner and discussed it repeatedly over the years. So I think it’s good not only to do it but to revisit it. And so the situation I find myself in when I teach the class is because I revisit it at least once a year, often twice a year when I’m teaching different cohorts of students, is it’s useful to assess like how am I doing. Like if I say these are the things that I care about, am I putting myself into situations where I live up to those values? And that has to do with the individual-level institutions. It’s how do I set up my life so that I’ll live up to my values.

And I don’t always succeed. I unambiguously fail a lot of the time, but that’s because I’m a human.

Kevin Cool: Right. I think all of us fail at that —

Ken Shotts: Yeah.

Kevin Cool: — in some ways [laughs].

Ken Shotts: If we don’t realize that we fail at it, then we’re lying to ourselves and others.

Kevin Cool: Right. And if one of our core values is honesty —

Ken Shotts: Yeah, yeah.

Kevin Cool: — then [laughs] own up to it —

Ken Shotts: Yeah.

Kevin Cool: — right? It may seem farfetched to look to ancient stories for guiding principles, but Ken suggests that mythology can be useful when designing institutions of an organization. Whether it’s Jason and the Argonauts, some piece of folklore, or the founding myth of a startup, these stories can help accompany and navigate treacherous waters. Knowing and articulating our values is essential. But acting according to those values requires the direction and discipline institutions can provide. And as more heated disagreements emerge in a more polarized world, knowing how to grapple with them will be even more important.


Ken Shotts: If/Then is produced by Jesse Baker and Eric Nuzum of Magnificent Noise for Stanford Graduate School of Business. Our show is produced by Jim Colgan and Julia Natt. Mixing and sound design by Kristin Mueller. From Stanford GSB, Jenny Luna, Sorel Husbands Denholtz, and Elizabeth Wyleczuk-Stern. If you enjoyed this conversation, we’d appreciate your sharing this with others who might be interested and hope you’ll try some of the other episodes in this series.

For more on our professors and their research or to discover more podcasts coming out of Stanford GSB, visit our website at GSB.Stanford.edu. Find more on our YouTube Channel. You can follow us on social media at Stanford GSB. I’m Kevin Cool.

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