By stating their values, a person or organization publicly defines what they stand for and who they are that makes them unique and special. Values form the bedrock of any corporate culture. As the essence of a company’s philosophy for achieving its goals, values provide a sense of common direction for all employees and guidelines for their day-to-day behavior, and their identity to customers and community. These values define them, and render them unique, coherent, and accountable.
In their influential book, Corporate Cultures: The Rites and Rituals of Corporate Life, Terrence Deal and Allan Kennedy noted,
If employees know what their company stands for, if they know what standards they are to uphold, then they are much more likely to make decisions that will support those standards. They are also more likely to feel as if they are an important part of the organization. They are motivated because life in the company has meaning for them. 1
But too often, company values are seen as poor public relations that really has no meaning of relevance. However, many stories suggest that when values are not simply dictated from the top, but are shared, affirmed, respected and yes, valued, throughout the company, many benefits arise.
Values are not passive. They are aspirations, ideals that an organization strives for. If they were easy or universal, there would be no need to state them. An individual can consider if he or she lives by them and can look for ways to express them more fully. Similarly, organizational or corporate values define expected behavior for employees and standards that suppliers, customers and the community can expect from the organization. If the person or organization is seen as adhering to the values, they are said to have integrity; if they are seen to fall short, they are held accountable.
Business families especially want to declare their values. Meghan Juday, chair of her four-generation family enterprise, notes the centrality of values for her large extended family:
“Talking about shared family values gives you focus. If you don’t define and measure your actions against those values, you don’t know if you’re upholding the best parts of your family’s spirit. Values are the yardstick with which you can measure the work of the family council.”
Clearly values and principles are an important part of every organization. Due to family companies having consistent ownership and leadership by people who share more than a desire for financial return, they are more often associated with their company values. Accounts of value-based companies and successful companies over the long-term are disproportionately populated by family companies. It appears that because of their consistent leadership and long-term perspective, family companies can sustain and be known for their values. They are a model for other public companies.
Values contribute to a company’s culture—they help define why this company is special, unique, and why it provides value to employees, customers, and the community. These modeled values help customers decide if they want what the company offers, and they help applicants and employees if they want to work here. If the company is owned by a family, their reputation and personal integrity are often judged by the respect given to their company values. Since the family owners are real people, highly visible influencers in the community and their company, they want to declare their values so that they, as individuals, are clearly accountable for contributing to their community.
Making values clear and explicit offers employees guidance on how they are expected to act when they make decisions. For example, does a harried gate employee have the power to upgrade a customer, should an employee sell an unopened but returned package as new, or can a technician stop an assembly line if they see a small flaw in the product? If they act, will they be rewarded or punished? Many future disasters are detected early, but not reported or acted upon.
The urgency today for clarity and discussion of values stems from several factors. Policies and rules cannot define or cover every situation. Values are broader and more general than policies and practices and call on employees to use judgment and sometimes challenge policies. The consequences of employee decisions are increasingly significant, in that employees can make costly mistakes or earn the company customers adding value by timely action. But if rules and policies can’t tell employees what to do, what will guide them? Values define how the company does things. If a company has a strong culture, their values will be clear, respected, and visible.
Many organizational and team values are implicit but unconscious, in that they lie below the surface and are not openly explored or discussed. Unclear or unknown values can produce conflicts and contradictions that confuse, block, or frustrate employees and customers who expect something that does not occur. Bringing them into the light of day enhances clarity, agreement and connection. For example, a consulting firm that valued collaboration was held to task because its performance standards rewarded employees for their individual billings. After discussion of the value, the formula was revised to include a measure of how each employee helped others.
The creation of an Organizational Values Statement can be a powerful foundation to align everyone to the core principles behind the business. But to get attention they must be real, not cosmetic. A historical example is that the corrupt company Enron was known for its highly publicized values of Communication, Respect, Integrity, and Excellence, before it went bankrupt and its founding executives went to jail. Company values must be more real than just stated. They must be understood and accepted and open for discussion. At times they must be reviewed and adjusted to fit new realities. There must be a mechanism for them to be assessed, reviewed, and even challenged by those who feel the company is falling short.
As we inhabit a world of continual change, an organization’s core values can be constant and unchanging, a “north star”, even if how they are expressed may evolve. A company that commits to defining and leveraging values develops its strength and capability to meet future challenges. Values work should not be a soft, fuzzy pursuit. They help companies achieve excellence in four ways:
- Motivate Commitment. Values can help employees find meaning and purpose in their work, care about what their company is doing, and link their individual efforts to those of the entire company.
- Align Action. With employees having to make many complex decisions, values offer a set of guiding principles. If they apply values wisely they know that they can take action, and do not fear the consequences.
- Enhance Products and Services. The values of the company can point to less visible aspects of what the company does that are respected and add to the company’s standing and integrity.
- Transcend Individual Conflicts. Values provide a language and way of understanding individual differences. They also help open the door for nonjudgmental acceptance of different ways of doing things. Values are powerful motivators. They represent an organizing principle for people’s lives, as well as for organizations.
Setting up an Authentic, Effective Company Values Statement
There are several common steps to creating, supporting, and gaining value from shared company values, or principles:
Founders Example, Leaders Polish: Founders usually have a set of values that form a first draft of a values statement. But these values are often polished and refined by a small group of current leaders and company influencers. This is not a democratic process; the company should consult the wisest and most trusted voices.
Share and Discuss: Values are not established by proclamation. They must be shared and discussed by employees, seeking feedback and being open to discussion of what they mean. A company often has a series of focus groups or working sessions to discuss and refine the values. This can lead to adding more detail to what each value means. This process also builds understanding, clarity and commitment to the values, making them more than a wish by leaders or a sign of respect for the founders.
Teach and Reinforce: For a values statement to be effective, employees must learn what they mean. They often have concerns or questions. Small groups can consider situations where values apply and talk about how to navigate difficult situations and reinforce that the values will find support. New employees must also learn the values and how they are expressed. Companies that respect their values teach them and apply them in action.
Align With Rewards and Policies: For a value to be effective, it must be rewarded and reinforced. Performance standards, rewards and compensation must connect to the values. Companies also have ceremonies that reward value-based behavior, giving visible support to “values champions”. A culture must be aligned around the values.
Review and Modify as Needed: Situations will arise where the values are challenged and where how they are applied needs to be modified. If this is not done explicitly, the culture risks having a hidden “counterculture” that rejects or questions a value, that undermines it. When a company does not live by its values, employees and even the public can be aware of it. If this is not addressed openly the company lives in “bad faith” and the values are useless.
Company values are incredibly important and useful in building a strong, aligned culture. But they are not simple or easy—they need to be alive and active. People need to learn them, apply them, and feel supported to use them.
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October 01, 2022 at 01:01AM
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When Company Values Are Real And Visible, Everyone Benefits - Forbes
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