Dear Colleagues! This is Asrar Qureshi’s Blog Post #1316 for Pharma Veterans. Pharma Veterans Blogs are published by Asrar Qureshi on its dedicated site https://pharmaveterans.com. Please email to pharmaveterans2017@gmail.com for publishing your contributions here.
Preamble
This post is based on Harvard Business Review article. Link at the end.
When Values Are Tested: What Does Your Organization Really Stand For?
Part 1 of 2 – From Values on the Wall to Values Under Pressure
Every organization has values. They appear in annual reports, websites, employee handbooks, induction programs and conference-room walls.
Integrity. Customer focus. Excellence. Respect. Innovation. Quality. Accountability.
The words are usually attractive. Almost nobody argues with them. But there is a more important question: What happens to those values when following them becomes expensive, inconvenient or commercially painful? That is where values stop being statements and become tests.
A recent Harvard Business Review article by Nick Hobson and Margie Warrell, “Will Your Organization Stand By Its Values, Even When It’s Hard?”, makes an important distinction: organizational values become particularly powerful when they define not only what an organization stands for, but also what it refuses to do, even when doing so carries a cost. The authors call this a “Refusal Framework of Values.”
This idea deserves much more attention from business leaders. Because the real culture of an organization is rarely revealed when everything is going well. It is revealed when the quarterly target is in danger. When a major customer threatens to leave, when a product launch is delayed, when a regulatory problem emerges, when a senior executive makes a mistake, when telling the truth is commercially inconvenient; that is when values are tested.
Values Are Easy When They Cost Nothing
Suppose a company says: “Quality is our highest priority.” That statement is easy to make. But imagine that a batch is ready for shipment and the quality team identifies a problem. Holding the batch will delay deliveries, disappoint customers and reduce monthly sales. Now the value has a price.
If management says, “Ship it, we’ll deal with the problem later,” the organization has learned something more powerful than anything written in its values statement. It has learned that sales take priority over quality when the two conflict. The organization may still have “quality” printed on every wall. But employees understand the real value system.
This is one of the most important lessons for leaders: Employees don’t learn organizational values from what leaders say. They learn them from what leaders permit, reward, tolerate and refuse. The most revealing moments are moments of conflict. Values become meaningful when two legitimate objectives collide. The organization cannot avoid these conflicts. Leadership is partly the art of deciding which principles remain non-negotiable when priorities collide.
The Pharmaceutical Industry: Where Values Have Real Consequences
Pharma provides perhaps one of the clearest environments in which organizational values are tested.
Consider a field-sales organization. The company announces an ambitious sales target. Managers cascade the target to regional managers. Regional managers cascade it to sales representatives.
Everyone understands that performance matters. But what happens when the target becomes unrealistic? The problem is not the target itself. The problem begins when employees conclude that the target matters more than the rules governing how the target is achieved.
Research examining pharmaceutical physician incentives in Pakistan has documented the complexity of incentive-linked prescribing relationships and has also noted that Pakistani regulatory and professional frameworks prohibit various forms of incentives to healthcare professionals. This illustrates an important organizational principle: A rule written in a policy document is not necessarily a value embedded in culture.
Culture exists when people follow the rule even when nobody is watching and even when violating it might produce a short-term benefit.
The “Small Compromise” Problem
Most ethical failures do not begin with a dramatic decision. They often begin with a small compromise. Each individual decision may seem small. But repeated small compromises can gradually redefine the organization’s boundaries. Eventually, the exceptional becomes normal.
And once behavior becomes normal, employees stop seeing it as a violation. This is why values need boundaries. A value such as “integrity” can be interpreted differently by different people.
The Power of Saying “We Don’t Do That”
This is perhaps the most useful insight from the HBR article.
Companies often define themselves through positive aspirations:
“We innovate.”
“We care.”
“We empower.”
“We put customers first.”
But organizations can also define themselves through refusals.
“We don’t falsify.”
“We don’t hide material information.”
“We don’t compromise patient safety for sales.”
“We don’t punish people for raising genuine concerns.”
“We don’t manipulate data to make results look better.”
“We don’t sacrifice long-term trust for short-term revenue.”
These statements are powerful because they convert abstract values into decisions.
Vioxx: Values, Science and Difficult Decisions
The pharmaceutical industry offers a more complicated example through Merck’s Vioxx experience.
In September 2004, Merck announced the worldwide withdrawal of Vioxx after data from the APPROVe trial showed an increased relative risk of confirmed cardiovascular events beginning after 18 months of treatment compared with placebo. Merck subsequently described the withdrawal as consistent with its commitment to patient safety, scientific investigation, openness and integrity.
The broader history surrounding Vioxx is complex and has been subject to extensive regulatory, scientific and legal scrutiny. That complexity itself teaches an important leadership lesson: Values cannot be judged only by slogans; they must be examined through decisions, evidence, incentives and governance. In highly regulated industries, leaders must create systems in which inconvenient scientific information can travel upward quickly.
When Speaking Up Becomes a Value
This brings us to another critical element: psychological safety.
Employees must be able to say: “I think there is a problem.” “I don’t agree with this decision.” “The data don’t support this conclusion.” “I believe this batch should be held.” Those statements are essential to organizational health.
HBR has previously highlighted the importance of creating cultures in which employees feel able to speak up. When people at different levels contribute concerns and alternative views, organizations can circulate local knowledge and avoid collective tunnel vision. The Institute of Business Ethics similarly emphasizes trusted channels through which employees can raise concerns, challenge decisions and speak up without fear of retaliation.
For pharmaceutical organizations, this is especially important. If these employees remain silent because “management doesn’t want bad news,” the organization loses its early-warning system.
What Leaders Should Ask
Every leadership team should periodically ask five uncomfortable questions:
- What would we refuse to do, even if it cost us revenue?
- Which behaviors would lead to consequences regardless of who committed them?
- What bad news reaches the CEO quickly?
- What bad news gets filtered as it moves upward?
- Can an employee challenge a senior executive without damaging his or her career?
The answers may reveal more about organizational culture than an employee engagement survey.
Sum Up
A company’s values are not tested when following them is easy. They are tested when revenue is under pressure, a launch is delayed, a major customer is unhappy, a senior executive is involved, or admitting the truth creates embarrassment. At that moment, leadership has to choose. Sometimes the decision will be complicated. Values do not eliminate difficult trade-offs. But organizations should know which lines they will not cross.
Values become organizationally meaningful when they define not only what the company wants to achieve, but what it is unwilling to sacrifice to achieve it.
Concluded.
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Reference:
https://hbr.org/2026/09/will-your-organization-stand-by-its-values-even-when-its-hard