Core values are not buzzwords, they should drive action. Everything you need to know to turn your company values into action.
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Core values are not buzzwords, they should drive action. Everything you need to know to turn your company values into action.
By Gustavo Razzetti
January 15, 2020
Company values are not just words, but a guide on how people operate and what’s expected of them. They should encourage positive behaviors and discourage anything that harms the working environment.
Unfortunately, most companies don’t live up to their values. They promote safety, as Boeing does, but then put people’s lives at risk. Others, like Enron, talk about the importance of integrity, but then become a quintessential example of fraud.
In this article, I won’t just share the sunny side of values, but what you also need to watch out for. This in-depth post covers everything you need to know about company values, from how to define them, to how to communicate them, as well as examples of core values, and actionable tips.
You can read the post in order–or jump to a particular section using the table of contents below.
Company values, also known as core values, are the set of guiding beliefs upon which a business is based. Corporate values help people function together as one and shape the way employees (should) behave.
The core values of an organization impact both internal and external affairs. They define not only how employees treat each other, but also the behavior expected toward clients, partners, and the broader community.
Company values are at the service of your organizational purpose. They define the desired behavior to accomplish the company’s ‘why.’ Once set, they should affect every aspect of the business, from reward models, compensation, and policies, to strategic decisions and public affairs.
Showcasing the company values on a PowerPoint, your headquarters’ wall, or in a marketing campaign won’t bring those core beliefs to life.
Company values only make sense if they’re practiced. Unfortunately, most companies have a disconnect between ‘proclaimed’ values, and ‘behavioral’ values, as Nik Beeson wrote here.
Values are only helpful when they’re expressed in everyday behavior.
When put into practice, well-defined core values are crucial for creating a thriving culture. They are one of the ten building blocks of the Culture Design Canvas.
Here are the key benefits of defining your company values.
Values drive community: If you want your employees to act like one, you need a shared code of behavior. Your values define your company beliefs and bring people together, building a community.
Values attract the right people: People don’t leave companies; they leave toxic workplace cultures. Your core values define what you stand for and will help attract the talent that is right for your organization.
Employees are willing to earn less money to work in an organization that’s aligned with their personal values.
Company values simplify decision-making: It’s easier to make choices when everyone knows what matters (or not) to the organization. Values help establish clear priorities; they make it easier to say “no” to the things that are not aligned with their core beliefs.
Core values educate customers about who you are: When a company brings its beliefs to life, their partners and clients know what they expect (or not) when doing business with that organization.
Corporate values create differentiation: They don’t just represent what you believe, but your unique behavior.
Atlassian is a hugely successful software company. One of Atlassian’s values is “don’t f**k the customer.” Customers are their lifeblood and, by avoiding formal corporate language, it looks like they mean it.
Your company values may be doing more harm than good.
Enron is considered the biggest fraud in history. Everyone is aware of how the once seventh-largest company in the world ended up being a big scam filled with lies and manipulation.
What very few people remember is what Enron stood for — their corporate values. Let me refresh your mind.
Respect. Integrity. Communication. Excellence. These are the corporate values of Enron, as stated in the company’s annual report. Frightening, right?
That’s a big issue with most organizations; they don’t live up to the standards their executives once defined. Most values mean nothing.
Boeing stands for “Integrity,” “Trust,” and “Safety.” That doesn’t seem to come from the same company that, according to internal memos, had “clowns designing its airplanes.”
That’s the problem with company values.
Leaders pay lip-service to beautiful-sounding words to define their culture. When they define core values, they don’t think in terms of inspiring positive behaviors, but on buzzwords that would excite people.
Approaching your culture by merely listing some inspirational (and politically correct) values won’t do your organization any good. Don’t expect people to jump out of their chairs, saying, “This is our culture! I love it.”
In a world of transparency and cynicism, people are more skeptical than ever before. Don’t try to fool your employees. Your company values should represent how your people actually behave, not what you wish for.
Your company’s purpose defines the reason why your organization exists. It represents the impact you want to create in the community, not just in the business.
Organizations that have compelling purposes succeed in rallying people around a mission. They tap into our human desire to be part of something bigger than ourselves.
Your company values are the principles that support your organizational purpose. When designing your workplace culture, you must articulate a compelling purpose before defining your values.
If the purpose addresses the ‘why,’ the values express the ‘how.’
Throughout this post, I’ll be sharing or addressing the values of various organizations. It’s okay to analyze how other companies define their core beliefs; some might even inspire you to tweak yours.
However, avoid the temptation of acting “like Google or Pixar.” Each workplace culture is unique. That’s why it’s the only true competitive advantage; you can copy what others are doing, but you can’t behave like a company you’re not.
Define values that are not only unique but also meaningful. Choose the values that best capture how you want your employees to behave. Avoid adopting values simply because they’re cool, feel nice, or everyone else is using them.
Embrace who you are and let your values speak for yourself.
Keep it simple. If people can’t understand or remember what you stand for, it will be hard for them to bring those beliefs to life.
Southwest Airlines, for example, keeps it values short but then adds a descriptor that people can always get back to. Slack uses emojis to make its core values more human and memorable.
Some companies like Netflix and Zappos have ten values, but you don’t have to go that far. Aim for 5.
A purpose that doesn’t cost is not worth pursuing.
The same applies to your company values; they must force you to make choices. The behaviors that your organization says “no” to are just as important as the ones you say “yes” to.
True values are not just nice; they also hurt from time to time.
In 1982, withdrawing Tylenol capsules from the market costed Johnson & Johnson $100 million. It wasn’t a cheap decision after some pills were tampered with, but according to J&J’s values, it was the right thing to do.
If your values don’t force you to make tough choices, or if they don’t make you feel uncomfortable sometimes, then they’re just nice-to-have, but not true core values.
As your company grows, your values need to evolve, too. Maybe some of the values you defined early on don’t define how your people should behave today. Or, perhaps, society changed and the words or beliefs need to be updated to reflect those changes.
Netflix’s culture deck didn’t mention anything neither about inclusion nor ethics. But, when the entertainment giant updated its culture canvas, “Inclusion” and “Integrity” became two of Netflix’s ten core values.
Though values are defined thinking of the long-term impact, you must revisit them from time to time. It doesn’t hurt to regroup every six months and see whether the company values need a refresh or some tweaks.
Above all, your values must mean something — they must inspire people, not just be self-serving.
The following examples showcase how several companies define their core values. I’m not endorsing any organization by including them on the list.
Browse the list and see if the values make sense to you. Do you believe those organizations stand for what they preach?
Zappos:
Facebook:
Slack:
Google:
Atlassian:
Four Seasons Hotels & Resorts:
IKEA:
Virgin Airlines:
Patagonia:
Whole Foods:
Pixar:
Starbucks:
Apple:
When helping teams define their core values, I usually get asked about values and ethics. Executives want to know whether or not values should address organizational integrity.
Not all values should necessarily address ethical behavior, but overall, organizations must take a stand.
As Patagonia CEO Rose Marcario said, “I think that companies are realizing that their customers and their employees expect them to take a stand. You can’t live in the gray area anymore. There’s too much at risk right now.”
Let’s consider one of Facebook’s values, for example: “Build Social Value.”
Also, among Facebook’s 5 core values, there’s no mention of “protecting users’ private data.” Its clients, employees, and partners should definitely know where Facebook stands when it comes to data privacy.
The issue is that many executives still think of ethics as a personal matter, rather than a workplace culture problem. They expect people to act the right way and leave employee’s integrity to their individual ethics.
However, as Lynn S. Payne explains in this Harvard Business Review piece, ethics has everything to do with your culture. One single person rarely drives corporate misconduct.
“Unethical business practice involves the tacit, if not explicit, cooperation of others and reflects the values, attitudes, beliefs, language, and behavioral patterns that define an organization’s operating culture.”
— Lynn S. Payne
Ethics, then, is as much a workplace culture issue as a personal thing.
So, the short answer is “yes.” You cannot define your core values without applying an ethical lens. A company’s core beliefs determine how leaders want employees to behave. They either want them to behave ethically or not. There’s no middle ground.
The Cambridge Dictionary gives a single definition of values: “The principles that help you to decide what is right and wrong, and how to act in various situations.”
Basically, values are not just meant to inspire people, but to promote action.
Zappos has true values. Southwest Airlines has true values. They’re true because all their employees are expected to live by them. Not sometimes, but always.
Johnson & Johnson’s handling of the Tylenol crisis is usually credited to then-CEO James Burke. However, the decision to do a nationwide recall of Tylenol capsules to avoid further loss of life was the consequence of many individual decisions across all levels of the organization.
It wasn’t the consequence of one person’s thinking, but the result of a company that lived what it preached.
Johnson & Johnson’s values are spelled out in the credo written in 1943 by its founder. Patients, doctors, and nurses — everyone who uses its products are the number one priority to the company. J&J is committed to their health and to providing them high-quality products.
Real values are built with action, not words. Johnson & Johnson’s credo made it easier to take such a rapid, cohesive, and ethically-sound decision.
Defining a company’s core values begins with having a clear understanding of an organization’s purpose. Core values developed through a collaborative effort keeps the exercise more real, relevant, and facilitates buy-in.
One piece of advice before you jump into the exercise, though: defining your company values is not about building a list, but purposefully designing the type of company you want to be.
When Patty McCord helped create Netflix’s culture deck, she decided to write down the things the company valued, what mattered to them, and what behaviors they expected in their people.
For example, they didn’t just want courageous employees; they wanted people to understand what “courage” looked like (and what it didn’t).
Your turn.
Select the right people. Make sure the team represents different interests and perspectives. Include people from management, but also from the front line. Have traditionalists working alongside newcomers. Invite those who love your company and those who complain about it.
Listening to diverse perspectives will provide a more comprehensive view of what your company stands for today.
Almost every company has some pre-defined values. Some call them principles, behaviors, or something else.
If your organization is new or has never defined its values, look at press releases, your website’s about page, etc. Identify the words that stand out and use them as the starting point.
Get someone to help you facilitate the brainstorming session and, most importantly, to challenge your team during the selection process.
If you manage the brainstorming on your own, the following questions will help you run the session:
Who are we? What drives us?
What brought us all together and continues to hold us together?
What do we want our company to be known for?
Which values will distinguish us from our competitors?
What behaviors will the company value over making a quick buck? Which behaviors are acceptable? Which are not?
Why did people join our team? Why do others leave our company?
The facilitator should encourage even participation from everybody. Don’t let the boss drive the conversation.
Find commonalities. Don’t get stuck with words for now; focus on grouping related ideas together. Make sure that you’re not grouping values that seem similar but aren’t, though.
To avoid this, the facilitator should double-check with the people who wrote the values before assuming what they meant.
Give three colored dot stickers to each person: one green, one red, and one yellow.
Green is a value that feels exciting or impactful. Red means a value that best supports the company’s purpose. Yellow is for a value that aligns with one’s personal values.
Let each person cast their votes by placing the colored dot stickers next to the different values. Select the values on not only the number of votes, but also on the criteria people used to choose one over another.
Are these values realistic? Can your people bring those values to life? Eliminate all BS, the things that mean nothing, or those which are unrealistic.
Get rid of obvious values. For me, integrity is not something to call out — it should be part of every organization, unless you work in an industry where lack of integrity is an issue.
As I shared above, the companies that usually list integrity as a core value are the ones that end up being the worst.
How can you express ethical behavior in a more concrete way? Patagonia, for example, talks about causing no unnecessary harm. Not only is it more specific, but it also sounds realistic and credible.
It’s time for wordsmithing. Who’s the best copywriter in your organization? It’s time to take your values to the next level.
Make sure the values are simple, easy to understand, and touch people’s emotions.
Introduce the values to the broader organization. Ask for feedback. Reflect and make the necessary adjustments.
Defining company values is not a one-off exercise. Make sure to review your values at least once a year – ideally twice.
Teach values through orientation. Once company values are clearly documented, share them with new employees during their onboarding process. Provide examples; don’t just share the list.
Hire people based on values. You can train skills, but you can’t teach people to adopt values overnight. The best way to go is by hiring people that already have the values you need. For example, Southwest Airlines will never hire someone that has no sense of humor.
Values also need to be embedded into your company culture so long-term employees do not forget them.
Invite your people to create team rituals that can bring values to life. How can daily practices remind people of how we expect them to act?
Work and play by your values. Slack values high-performance, but also encourages people to protect their personal time. Slack’s motto is: “Work hard and go home.” People are not allowed to work after hours, and they cannot ‘Slack’ each other at night or during weekends.
Reward and promote values. At Southwest Airlines, performance reviews include assigning people a score on how they live each of its core values.
Terminate people who violated the core values. Your culture is the behavior you reward and punish. Firing people is not easy. However, if someone consistently acts against the desired behaviors, by doing nothing you’ll be inviting everyone else to do the same.
Use the following questions to help you define, challenge, revisit, or refresh your core values.
Are your core values action-driven?
Are company values written in a verb form? (e.g., “Do no harm to our community.”)
Do your values represent what your organization stands for?
Are your values connected to your company’s purpose?
Do you have the right number of values? Are there any missing? Which can be eliminated?
Try this test: if you remove one value and it doesn’t really hurt, then it’s because that value was not critical. Eliminating a fundamental value should feel like removing an arm or a leg from your body.
Have you written your values in the company’s voice?
Do your values make sense to your people?
Were employees involved in the process of defining, writing, or updating your company values?
Do your company values still make sense? Review them every six months.
Finally, the acid test: does the behavior of your organization align with your values? If not, what needs to change ASAP?
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