Organizations that are leaders in the market are about more than just their balance sheets. They have an identity and embody something.
Here, the internal health of the organization plays an equally significant role in the organization’s brand perception. This identity comes from the core values a company has adopted. These core values form the personality of the company and the bedrock upon which business decisions are made.
In his classic, The Five Dysfunctions of a Team, Patrick Lencioni quotes an entrepreneur as claiming that if an organization could get all the employees to row in the same direction, that organization could dominate the market, against any competition, at any given time. Core values are what helps the team to work together to achieve this.
What are the Core Values?
Core values determine the priorities of an organization. They form the company’s foundation and serve to define its vision, shape its culture, and help work towards the company’s goal. Core values are ideals and objectives in themselves.
Any business endeavor is subjected to rapid changes with respect to society and technology. In this kind of volatile environment, core values become a much-needed constant. Unfortunately, companies often focus on technical competencies but forget that the underlying core values drive the company toward its desired sustained success.
When Tony Hsieh, the founder of Zappos, was asked what he would do differently if he were to start the company from scratch again, he said that he would come up with core values from day one of its inception. The core values of a company are like the sails of a boat, giving it direction and purpose.
Why should core values be a priority for modern organizations?
Growing up, everything we did – good or bad, was termed as the result of being raised by our parents in a certain way. Values can be either good or bad, but they significantly impact how we live in society.
Our core values define our behavior, both at home and at work. The values the C-suite employees set become the norm for every employee. It is why selecting the correct values and ensuring everyone follows them is vital.
Here are the main reasons why the core values of a company are essential in modern times:
- Defines Organizational Culture
They help to define and create the organizational culture by providing guidance and direction for employees on how to behave and make decisions in the workplace. For instance, when employees are aligned with organizational values, it creates a positive work environment and enhances teamwork and collaboration.
- Helps in decision-making
They provide a framework for decision-making. When employees face a tough decision, they can refer to the organization’s values to guide their actions. This ensures that decisions are consistent with the organization’s mission and values.
- Attracts and retains talent
Organizations with strong core values are more likely to attract top talent with similar values. In addition, employees aligned with the organization’s values are more likely to stay with the organization for the long term and be more engaged with the work.
- Builds trust with stakeholders
Organizations with clearly defined core values build trust with stakeholders such as customers, suppliers, and investors. This is because the organization is seen as having a clear sense of purpose and commitment to ethical behavior.
- Enhances Reputation
Organizations with strong core values and ethical behavior have a better reputation. This can increase business opportunities, partnerships, and positive media coverage.
Steps Involved in Setting up Core Values
Identifying a company’s core values is the next big question. The important thing to remember here is not to copy-paste a competitor’s core values, nor is it plucking ideas out of thin air and noting them down. Instead, the core values need to be a close fit for any organization and should be aligned with the goals of the company.
Here is a short description for identifying your company’s core values:
Step 1: Assembling a Team
Careful thought needs to go into setting up a team that must come up with the core values that will become the identity of the company. Having representatives from across the company, from various departments and different hierarchical levels, would be a promising idea. The team chosen for this exercise should all be on the same page and committed to drafting and implementing these values. They should be able to brainstorm, compromise, take a step back, assess, reassess, and believe in the outcome.
Step 2: Brainstorming
This step would involve coming up with several ideas and then narrowing them down to the few most important ones that are the right fit for the organization. Then, keeping the company’s mission statement in mind would bring out the best-suited core values.
It would involve all the team members who have been put together for this purpose individually listing out what each thinks could be core values for the organization and then making sense of all the input. The top rung of the management needs to be actively involved, as their vision will steer the company forward.
Step 3: Condensing and Finalizing
It is essential that the core values are manageable in number and can be remembered easily. This step would require all collected data to be sorted and parsed. The affinity mapping exercise may be helpful, which involves grouping similar ideas into 5-7 groups to make sense of all the data.
Many companies have anywhere between 5-10 core values. Therefore, while arriving at the final core values, it is necessary to take stock of the facts as to whether they encompass the vision of the company and whether the employees can be held to these values.
Step 4: Unveiling
Rolling out the compiled list of values to the entire team is an exercise aimed at familiarizing all employees with the organization’s core values. A brief explanation about how the values were chosen with respect to the company’s goals will go a long way in maintaining employee loyalty and building brand value.
It is important for all the employees to understand how each value works for them individually as well as for the company since it is highly likely that even the most well-meaning employee may misunderstand or misapply a value.
Step 5: Delineating
The company’s well-being lies in its employees and the company would do well to highlight those employees who are examples of the values for others to appreciate and emulate.
Rewarding employees who uphold the core values at regular intervals effectively reinforces the core values amongst all employees and is a constant remainder for the workforce.
These steps make it quite easy for every company to identify and define its set of core values.
What are the examples of Company Core Values?
Here are a few of the many core values that companies may prioritize. A company’s core values should align with its mission, goals, and organizational culture.
The list of core values is endless, but here are a few examples of core values in the workplace:
- Integrity: Prioritizes honesty, ethical behavior, and transparency in all interactions with various stakeholders.
- Innovation: Prioritizes creative thinking, experimentation, and continuous improvisation and stays ahead of the competition.
- Customer focus: Prioritizes meeting the needs of their customers and providing exceptional customer service.
- Teamwork: Prioritizes collaboration and communication to achieve shared goals and objectives.
- Diversity and Inclusion: Prioritizes creating a diverse and inclusive work environment that respects various backgrounds, experiences, and perspectives.
- Accountability: Prioritizes individuals taking responsibility for their actions and outcomes and holding themselves and others accountable for meeting their commitments.
- Social responsibility: Prioritizes being socially responsible and contributing positively to the communities in which they operate.
- Continuous learning: Prioritizes ongoing learning and development to ensure employees have the skills and knowledge necessary to succeed in their roles and support the company’s goals.
- Work-life Balance: Prioritizes creating a work environment that supports work-life balance, wellness, and employee well-being.
- Sustainability: Prioritizes commitment to responsible environmental and social practices and promotes sustainable business practices.
Examples of Company Core Values
Google is a multi-national technology company specializing in Internet-related services and products, including search engines, advertising, and cloud computing. Its central core values are as follows:
- Focus on the user
- Doing one thing well
- Fast is better than slow
- You can be serious without a suit
- Democracy on the Web works
- Transparency and openness
Why it works – Google’s values work by fostering innovation, customer-centricity, and employee empowerment, which drives growth and attracts top talent.
Spotify is a music streaming platform with a vast library of songs, podcasts, and other audio content accessible via subscription. Its central core values are as follows:
- We are innovative
- We are collaborative
- We are sincere
- We are passionate
- We are playful
Why it works – Spotify’s values foster innovation, collaboration, and a passion for music and audio, which helps them maintain their leadership position and attract and retain top talent.
Airbnb is a platform that allows people to rent out their homes or rooms to travelers looking for short-term accommodations. Its central core values are as follows:
- Champion the mission
- Be a host
- Every frame matters
- Be a cereal entrepreneur
- Embrace the adventure
Why it works – Airbnb’s core values work by championing its mission, fostering a culture of hospitality and entrepreneurship, and promoting diversity and belonging, which attracts guests and hosts worldwide.
Bain & Company
Bain & Company is a management consulting firm that provides advisory services to businesses, governments, and non-profit organizations. Its central core values are as follows:
- One team attitude
- Not taking ourselves too seriously
Why it works – Bain & Company’s core values of client results, integrity, teaming, and global mindset work by creating exceptional client experiences and fostering a collaborative and inclusive workplace.
Ways to make your company core values matter
A company’s core values are not just meant to be displayed on huge walls. Instead, it is how companies espouse these values and are strictly followed by the employees. Therefore, if companies wish to improve their culture, they must pay heed to how their employees view their company values.
Here are a few ways to add real value to your company’s core values:
- The Importance of Good Leadership
The ‘Theory of Behaviorism’ states no behavior will persist long-term unless it is perpetuated by either a positive or a negative reinforcer. A leader’s positive or negative behavior directly influences the employee’s behavior since they pay more attention to a leader’s actions than their words. Thus, only when leaders practice the organization’s values can they expect their employees to follow suit.
- Hiring and Firing Practices
In the talent war, most companies become desperate to hire more people than the right people. So, when companies hire, they need to develop a mechanism to judge candidates based on the company’s core values and if they will be culturally fit for the organization. Another challenge is not firing the wrong hire. This reduces the team’s productivity and spreads the message that power, and politics will help employees survive in the long run. Both these negatively impact the organization.
- Rewards and Recognition
Organizations need to promote fairness and equality in reward and recognition. The process of reward and recognition needs to be well thought out and justified with valid reasons, where praises are made public, and criticism is saved for one-on-one sessions.
- A Culture of Diversity
The rise of the global political environment has escalated employee sensitivity on matters like diversity and inclusion. Along with that, social media too has fueled this movement. Millennials now want a workplace where their views are heard, so companies are paying heed to burning issues to retain this workforce.
Ideology Behind Setting Up Core Values in an Organization
The ideology behind setting up core values in an organization is to establish a set of guiding principles that define the cultural behavior and decision-making processes of the organization. Company values provide a basic framework for employees to understand what the company stands for, what is important to it, and how it should act in alignment with its goals.
Setting up company values helps to:
- Support the vision and shape culture:
Companies can attract and retain the best talent pool when their culture speaks for itself. Employees of such organizations become their representatives even when they are away, and their culture talks of the company’s culture.
- Improve Employee Engagement and Motivation:
Companies that place core values at the forefront during meetings and reviews find it easier to assess the effectiveness of the ongoing work with their established values. This boosts employee morale, and in turn, raises productivity and performance.
- Give a Competitive Advantage:
When companies place their core values at the center of their activities, they allow everyone to see how it operates. If people like what they see, word-of-mouth publicity helps build the organization’s brand image.
- Support Integrity and Ethics:
Companies tend to do the right things fairly, leading to unbiased respect from their workforce and gaining their long-term trust and commitment.
- Promote Innovation and Enthusiasm:
Setting up strong core values will be a constant reminder to be innovative and continuously improve to sustain the growth and success of the company. Core values are the backbone of the thought process to assist in constantly upskilling the workforce and honing their creativity.
Wrapping it Up
The importance of core values is aptly summed up by the famous author and inventor Edward De Bono, stating, “Effectiveness without values is a tool without a purpose.”
We at Keka take this on a serious note. Our values are centered around self-accountability and employee flexibility. This central theme has helped us disrupt the HR world within a few years of our inception, and our employees have always been our most significant assets on this journey.
Thus, thoughtful well-implemented values are the foundation for a positive, high-performance culture, as they constantly guide the company and its employees to function within an ethical and ideological framework. In this light, defining an organization’s core values at the stage of the company’s genesis becomes highly pertinent. So, use the guidelines and the steps discussed to frame your company values and disrupt the market.
Frequently Asked Questions (FAQs) of Core Values
Q1. What do company core values mean?
Company core values represent the fundamental beliefs and principles that guide an organization’s culture, decision-making, and behavior. They also serve as a foundation for the company’s identity and success.
Q2. How to write core values?
To write the most suitable core values for your organization, identify the principles that guide your company’s decisions and behaviors. Keep them concise, authentic, and meaningful. Effectively communicate them across all levels of the organization and the other stakeholders. Always remember to integrate them into your company culture.
Q3. How many core values should a company have?
There is no set number of core values a company should have, as it depends on its mission, culture, and future goals. However, it is recommended to have a concise set of 3 to 5 values.
Q4. What is the difference between code of conduct vs company values?
A code of conduct outlines the specific behaviors and actions expected of employees. On the other hand, company values are broader principles and beliefs that guide the organization’s overall culture and decision-making.