(Re-) Creating Company Values that Matter
Company values can positively impact your organization, if you have the right ones in place.
This week we are continuing to talk about organizational values and, specifically, how to create, or modify, your organizational values.
Just to recap some previous findings we have discussed regarding the value of organizational values, they include:
· Financial: Multiple studies have shown that companies with corporate values perform higher on as many as five different financial metrics. Those that have unique values perform at even higher levels financially.[1]
· Employee engagement: Research shows that alignment of personal values and company values has the highest impact on employee engagement than any other factor.
· Customer loyalty: Companies whose values align with customer values have the highest levels of customer loyalty. [2]
There are other benefits as well. But this tells already tells us that values are beneficial when they are unique (i.e. leaders have though through picking the right ones), and when they are aligned with employee and customer values.
Clearly, for values to positively impact financial performance, employee engagement, and customer loyalty, those values must be genuinely accepted and integrated into the organizational culture and practiced consistently by leadership.
After all, the values of Communication, Respect, Integrity, Excellence all sound pretty good, but they were the stated values of Enron, an energy commodities business whose
leaders perpetrated one of the largest accounting frauds in history which resulted in more than $11 billion in shareholder losses.
How do you create a set of values that employees accept and adopt? And, more importantly, how do you make the unique, differentiating, and resonating with employees and customer values you need?
Given the fact that about 90% of companies have a stated set of values, the more appropriate question might be, how do you adapt your values to do all the above?
For the rest of this article, we are going to walk through a high level approach to lead your team and organization through this process. Before we do, I’d encourage you to go back and read my previous article, Creating Advantage from Company Values and noting in particular the five practices of values-driven organizations.
Okay, here is the process I recommend at a high level:
1. Know your types
2. Assess your current values
3. Seek to answer, “What do you need to succeed?”
4. Educate your team
5. Choose a process
6. Weave values into your organization
Know your types
First, know and understand the types of values you might choose from. Last time we talked about four basic types of values, those that linked to collaboration, creativity and innovation, competition, and control. Another way to look at values is through the lens of how they operate inside your organization:
Core Values: These are fundamental, unchanging beliefs that define an organization's essential character and purpose. They are integral to the way you do business.
Permission to Play Values: These types of values are the minimum standard values necessary for an organization to operate legitimately within its industry. They often come from expected personal, ethical expectations or industry norms.
Differentiating Values: You want to put your focus on unique organizational values that distinguish it from competitors and provide a distinctive competitive advantage.
Aspirational Values: They are future-oriented ideals that an organization strives to develop and fully integrate into its culture. These can include values from any of the previous definitions. You don’t really have them now, but you want to talk them until you walk them.
Accidental Values: Finally, these are the unintentionally developed values that emerge organically through organizational practices and historical circumstances. You may or may not want them, but you should identify them.
Educate your team
Next, educate your team about values and lay out your intention to make changes which includes their input.
It might be tempting to say that you need to bring in a consultant to train on organizational values, unless you’re a large, publicly traded company with a lot of money to spend, you don’t need it.
People know what corporate values are. They inherently understand they are meaningful. So, tell your own story, how you believe they are important, impactful, and you as a leadership team want to make some changes and improve them to make them more meaningful. Most of all, encourage your team to think about what values are important and encourage some rigorous thinking and debate.
Assess your current values
Next, it’s time to get curious about your current values and their impact on your organization. This is your chance to learn from your team about whether that values statement on the wall is worth the paper it’s printed on.
If you have a current list of values, start asking and observing. Here are examples of what you can do:
1. Observe how people interact in meetings. What does it tell you about what values you uphold with each other?
2. Look at your workflow and processes for signs of values.
3. Observe what you measure through the organization.
4. Ask team members in 1:1’s and meetings what they think about specific values.
If you’re not already actively promoting company values, be prepared to find that your team may not know them, even if they are visibly posted. If you’re like other companies, about a third of your employees may know less half of your stated values.[3]
In addition, be prepared for some cynicism and harsh feedback. A Gallup survey found that only about 25% of employees believe that their company values are useful or believable.[4]
What’s the practical learning from this? You should go into your questions with a sense of curiosity and leave defensiveness at the door. Your employees likely didn’t create your values, so learn from them now that you’ve given them a voice.
A great way to do this more generally is to survey employees. List your values in a survey form and ask two questions (on a scale of 1-5 for low to high) for each value:
1. To what extent do we follow or not follow this value?
2. How important is this value to our success?
Choose your process
Now, it’s finally time to choose a process for selecting/changing your company values. Again, if you aren’t hiring a consultant to do this, it’s important to keep the process simple. Next time I am going to suggest a simplified process for creating a new set of values that focuses on an iterative, collaborative process.
Weave values into your organization
Finally, you will get to the stage of promoting your values and encouraging how they will be implemented, reinforced, and rewarded across your team.
We’ve largely dealt with a (hopefully) insightful exploration of how to create or redefine organizational values. There are deeply human and emotional dimensions of value creation. From my experience, this is a process that his highly compelling for most employees. They want to create an organization that aligns with their personal values and beliefs.
The most transformative values emerge not just from strategic planning, but from genuine, vulnerable conversations about what truly matters to people. Organizations often treat values as a technical exercise—a checkbox to be completed—when in reality, they should be a living, breathing narrative of collective aspiration and effort.
The most powerful values are those that connect to individual team members' sense of purpose, their personal growth, and their desire to contribute to something meaningful beyond mere business metrics. They are not just statements on a wall, but a shared commitment that resonates at an emotional level, inspiring people to bring their whole, authentic selves to work and to collectively define how to work together.
Next time we will cover a simple, iterative process for creating those values as a team. In the meantime, here are some questions for you to discuss with your team.
Things to consider.
1. How well do our current stated values (if we have them) align with our day-to-day actions?
2. Where do you see disconnects between what we say we value and how we actually operate?
3. What unique qualities set our team apart from others in our industry?
4. If we could create a values-based culture that becomes our competitive advantage, what would it look like?
5. What behaviors do we want to encourage that we're not currently emphasizing? How would we express those in our values statement?
6. How can we create values that truly represent everyone on the team, not just leadership?
7. How might our current values need to evolve to meet future challenges in our industry?
8. What values would help us attract and retain the best talent?
9. How can we make our values more than just words on a wall?
Until next time, lead with purpose.
Will
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[1] Do corporate values have value? The impact of corporate values on financial performance, Taher, Ahmed, Future Business Journal volume 9, Article number: 76 (2023).
[2] Why Principles Are Becoming Essential to Profit. David Jonker Cindy Waxer November 1, 2022, https://www.sap.com/resources/principles-corporate-values-essential-to-profit#:~:text=The%20mission%20won't%20end,be%20good%20for%20the%20world.%E2%80%9D
[3] https://www.fond.co/blog/new-data-company-core-values/#:~:text=Walk%2Dthe%2DWalk%20When%20It,of%20your%20company's%20core%20values?%E2%80%9D
[4] https://news.gallup.com/businessjournal/195491/few-employees-believe-company-values.aspx