The Strategy of Grounding Leaders and Employees in Values
July 2, 2019
QTS Realty Trust, Inc. is a leading provider of data center solutions across a diverse footprint spanning more than 6 million square feet of owned mega-scale data center space within North America and Europe. Through its software defined technology platform, QTS is able to deliver secure, compliant infrastructure solutions, robust connectivity, and premium customer service to leading hyperscale technology companies, enterprises, and government entities.
- QTS Participants:
- David Robey, Chief Operating Officer
- Steve Bloom, Chief People Officer
- Kelly Michael, Senior Marketing Manager
Every organization has corporate values—on its website, in framed posters on its walls, in the taglines of its emails. Yet organizations often struggle to make those values relevant, role-modeled, and practiced as guidelines of accountability. Executive Roundtable columnist, Sonja Meighan, and guest columnist, Harry Feuerstein, sat down with QTS’ Chief Operating Officer David Robey, Chief People Officer Steve Bloom, and Senior Marketing Manager Kelly Michael to ask how they bring the company values to life and align them with their business strategy.
The Strategy of Grounding Leaders and Employees in Values
People + Strategy: To set context, can you summarize the market opportunity or challenge your strategy requires your organization to solve for?
Steve: We have two primary business verticals: hybrid colocation and hyperscale. Hybrid colocation is a data center and cloud play focused on thousands of enterprise customers who trust us with managing their mission critical IT infrastructure, and our hyperscale business provides large footprint data center services to some of the largest technology companies in the world. While many of our competitors play in one of the two areas, we believe that one of our core differentiators is our proven ability to cater to both markets. The hyperscale business is lumpy— large deals that come only a few times a year. The hybrid colocation business is more consistent, but smaller deals. Success in both businesses requires innovation, speed, and superior customer-service. Above all, we want our customers to feel safe that they are working with a trusted partner.
David: The market is rapidly evolving, and things are changing quickly. Because of this, there is a constant tension of a history of conservatism and caution, balanced with the need to keep up with the changing marketplace, while not compromising integrity. These are constantly at odds with each other.
P+S: What purpose should values serve in an organization, generally? What is the relationship—if any—between a company’s strategy and its stated values?
David: To begin with, values are not a tool to use to get to an end. They are so much more than that. Values are more important than the business objectives—you can never compromise them because of a better business opportunity or because you could benefit from it personally. In the case of values—actions speak much louder than words.
Steve: These days most companies have a values statement somewhere. At QTS, values for us are used at the executive level to guide our business decisions. I can think of many examples where we were faced with making a tough decision and we stopped to ask ourselves, how does this relate to our values? For example, we implemented a number of strategic growth initiatives in 2018, and throughout the planning and implementation processes, we constantly used our core values as a check for how we treated customers, employees, and shareholders. We work consciously at using the values as a true and active guide for our business decisions.
Values are not a tool to use to get to an end. Values are more important than the business objectives—you can never compromise them because of a better business opportunity.
P+S: Given your particular context, how did you select your values and how have you kept them fit for today’s purpose and demands?
Steve: Our values were first written in 2010 by our CEO, Chad Williams. They are part and parcel to who Chad is and the business he has built. Chad embodies our values and constantly gives them voice. One of Chad’s favorite say-ings is, “it starts with character, trust, and integrity, and it ends with support of family, faith, and community,” which is a way of paraphrasing some of our essential values.
Kelly: Due to the breadth of our values, they cover every aspect of the business from top to bottom. Especially in terms of the community aspect—it is not just about the business and this is something we will never falter on.
David: I have been with the company for more than eight years and I don’t believe the values have changed one bit. They have remained consistent, strong, and the foundation for every conversation we have as a company.
Steve: Our customers rely on us. Our job is to keep their data safe. In today’s world, data is often one of an organization’s most valuable commodities. Our values of integrity, trust, and respect are at the core of this. If these values are not hallmark to what we do for our customers and how we operate, I am not sure why anyone would trust us with their data.
David: Our commitment to live our values is what differentiates us. To customers, it matters who they are working with.
P+S: How do the QTS values have to show up at the leadership levels?
Steve: To be clear, we are far from a perfect company and this includes liv-ing our values. I think every leader at this company would say there are times when they fail to live up to the values. However, what is different at QTS is we catch each other and ourselves. We genuinely make an honest and earnest attempt to correct our actions when we falter or fail to live up to our values. The entire leadership team is comfort-able talking about the ways we make mistakes and identifying ways we can be better.
Kelly: We are not a culture of blame. One of our strengths is trusting our teams and ensuring we keep everyone on the same page. We are each accountable for our actions and we trust each other. This creates an open forum for communication where it is not whose fault is it, but rather learning from mistakes that occur. We have created great leaders because of this.
Steve: Because of this commitment and Chad’s expectation of the leadership team to live and rolemodel the values, we strive to instill it in our teams. It is never about slapping someone on the hand when they don’t live up to a value, but instead it is coaching them and having a conversation about how a value was not lived when the decision was made. As leaders, it is our job to guide our people.
P+S: So many companies in today’s world drive towards results. Com-pensation systems tend to be biased towards bottom-line results. How do leaders in QTS work with their teams to balance the “how” behind accomplishing things? How has this become part of your culture?
David: There are two key components: 1) our actions and behaviors as leaders become the guide for the rest of the organization and 2) our performance reviews and evaluations weigh heavily on the “how” of accomplishing things. More specifically, when evaluating em-ployees, we place equal weight on what was accomplished and how said work was accomplished.
Steve: When we conduct evaluations, employees are evaluated equally against their core accountabilities and how they showed up against our core competencies. In other words, employee performance reviews are 50 percent based on what they accomplish and 50 percent based on how they accomplished it. These performance reviews drive much of our internal compensation decisions be it salary, bonus, or equity. There is a clear link between living up to values and compensation, but that’s only part of the equation—it’s really our corporate culture that sets the tone for living our values daily.
David: I’d like to reiterate again that you can never compromise on the values. There will always be points in time where you are faced with a decision to either live up to the values or stray from them to meet a business objective. As soon as you stray from them once, it sets the precedent that it is ok to do that in certain circumstances. As a leader, I will never allow or endorse someone on my team to break a value to reach a business objective. If we don’t accomplish the objective, that is on me as a leader. We may miss the business objective today, but in the long run we will win because we are true to who we are and who we strive to be for customers.
Steve: We also have a number of initia-tives as a company that highlight our commitment to the values. For example, community is a core value of ours. We provide paid-time off to our employees to volunteer at charitable organizations of their choice. We also offer a generous matching gift program to supplement the corporate money we donate to charities each quarter. Each of our data centers chooses several local organiza-tions that they personally sponsor with their time, talents, and giving—and we make these commitments in good times and bad. This is just a small example of how we live the values as an organi-zation regardless of the extenuating circumstances around us.
P+S: If I was walking around at lower levels in the organization, would I get a sense that people understand the importance of values in what they do?
David: If I were to rewind the clock to when we first became a company, the values emanated from the top. Over the years, the emphasis on values at the top has penetrated deeper into the organization. I am convinced that if you walk up to any QTS employee and ask them about our values, they will get 80 percent of them right. But more importantly, they know the context around what we stand for and who we strive to be in every interaction with each other, our customers, and our communities.
Steve: I would also imagine that the longer the tenure of the employee, the more likely they will be to articulate the values and how they show up. If you watch the way they interact with colleagues and treat their teammates and customers, it’s clear they are living the values.
David: It may not be as strong as it is at the leadership team level, but the presence of our values is definitely there. We are a company of service—to our customers, to each other, and to our communities. If we live in that space and stay true to that space, we are going to do alright. That shows up in our customer service scores and how folks interact with one another. It is prominent throughout many aspects of the organization.
Kelly: Having been at the company for a long time at a mid-level, the values are constantly reinforced through communication, posters, new initiatives that are rolled out, and people rallies. In those communications and when we announce a new internal service, we try to tie it back to a core value. We want to do this to enhance team orientation and accountability. The communication trickles down to all levels in the organization. Even though employees may not be able to recite all the values, the values are felt in every employee. People know what we stand for.
P+S: What do you say to an investor who argues you are not putting enough emphasis on results?
David: For me it all comes back to living the values constantly. If I can’t deliver the results while staying true to the values, then I am not creating the right leadership. It never means compromising the values. It means I have to do a better job at building leaders or getting the right people in to jobs to put us in a place where we can succeed.
Steve: Investors are getting very savvy these days, and they are demanding new forms of transparency and new types of results. At QTS, we are finding that many of our values have long been aligned with these new investor demands. Sustainability is one example of this. Our longstanding commitment to community is also about our commitment to sustainability and environment, and we’ve codified how we think about this in our recently published report on environment, social, and governance.
P+S: When you’re challenging your-self about whether you’ve lived the values that day, or that meeting, or that decision, whose voice is asking that question in your head? Is it a leader you worked for once, a coach you played for, a mentor, a parent?
David: Steve made the reference that we are not a perfect company. I love that he made this comment because if you can’t admit you are wrong, then you don’t have character, integrity, and trust. When I think of the voice in my head when faced with a tough decision, I think of myself. I am who I am, and I have to live with the decisions I make. I want all employees to hold me accountable to the same extent I hold myself accountable.
Steve: All my life I have had strong role models. One of these that stands out is my grandfather. He was a rancher in western Kansas for all 96 years of his life. In many ways he just lived the life of a quiet rancher. However, when I was a little boy, I remember walking through the streets of the small town near his ranch. When I told people, I was Glenn Bloom’s grandson, I was inspired by their reactions. It was not because of who I was, but because of who my grandfather was. It was so clear to me that they trusted him, and he carried a lot of weight in the community. There is no question that he lived an ethical life. In the hard times, I think of those interactions with the people in the small town by his ranch and the impact he had on their lives.
P+S: What role should HR play in the translation of values into culture? Can you give us an example of how you’ve operationalized that?
Steve: The biggest thing is helping leaders translate the values into their leadership behaviors. Our HR organization provides several tools to assist leaders in building strong culture and values-orientation. For example, we rebalanced the scoring of our performance management systems to focus equal weight on what was accomplished and how it was accomplished. We have created a set of core competencies that are unique to QTS and are shaped specifically around our core values.
We recently created a leadership development curriculum that is aligned to the values. Through this curriculum, leaders at all levels in the organization are exposed to how to lead in a way that is consistent with how we want to run the company. Additionally, the entire talent acquisition team focuses on values during the interview process. We want to ensure candidates understand who we are and how we want to run the business when deciding if this is a place they’d want to work.
A leader needs to have a firm grounding outside of work. The foundation upon which you stand transcends your title, paycheck, status, and role as a leader in the company. As long as you have this foundation, you are able to make decisions aligned with your values even in the most difficult of times.
P+S: As a leader, what advice would you offer a new CEO for keeping him or herself accountable to values? Not so much in front of investors or a town hall or a board, but when they’re alone in the dark at 2 a.m., thinking about the organization and what it needs from them?
Steve: The first thing I would say is the leader needs to have a firm grounding outside of work. The foundation upon which you stand transcends your title, paycheck, status, and role as a leader in the company. With a strong foundation, you have the freedom and space to make the hard decisions that may cost you your job, your company, or draw angst from the shareholders. As long as you have this foundation, you are able to make decisions aligned with your values even in the most difficult of times. David: I always say leaders should create the values they believe in, not the values they need to be successful. It is critical that as a leader you believe your results will come as a result of your actions. If you let the results dictate your actions, you will compromise on your core values.
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