Any business coach, strategy, or leadership coach will tell you that you must have core values before you even start thinking about starting or running your business. For many, this is a task that is overlooked, so what do we do? We take a piece of paper and write: Honesty, Integrity, Teamwork, and Customer Focus. We are happy—mission accomplished, and now we can move on to run our business.
But what do we really do with those core values, why do we need them, and do they really matter? How do we choose them, and how do we run our business in alignment with those values?
Ever wondered why some companies thrive while others struggle? The secret often lies in their core values. These guiding principles are more than just words on a wall; they're the bedrock of a company's identity and success. Core values shape everything from leadership styles to strategic decisions, hiring employees, crafting processes, and influencing how businesses operate and grow in today's competitive landscape.
This article will explore why core values matter and how to define them effectively. We'll dive into their impact on employee engagement and performance, examine their strategic importance, and look at how they contribute to business success. Through real-world examples and case studies, we'll show you how successful companies have integrated core values into their DNA, proving that when it comes to building a lasting, impactful business, values aren't just nice to have – they're essential.
What are Core Values
Core values are the bedrock of a company's identity, serving as the guiding principles that shape its culture and decision-making processes. They're not just fancy words plastered on office walls; they're the DNA of an organization, influencing everything from daily operations to long-term strategies. Thinking about a company's core values is not much different than thinking about a person's values. When you meet the right person, they just seem humble, reliable, or honest, and you feel it, regardless of what they say. The same applies to a company; this is how you think about interacting with the company, from talking to the salespeople, receiving emails, seeing ads, and dealing with their support. After all, a company is a collection of the people who work in it and those who share and demonstrate the same core values.
Core values are born deep inside you, as the business leader, and what you believe in. Those values are not related to what the company does, what products or services it provides, or who the customers are. They shape the company's culture, how its employees perceive it, and how customers and anyone interacting with your business feel about your company.
The Strategic Importance of Core Values
Aligning Values with Company Culture
The interplay between core values and organizational culture is like a well-choreographed dance. Values inform and shape the culture, while the culture reinforces those values through norms, assumptions, and behaviors. It is reflected in the company’s processes, policies, publications, announcements, activities, and decisions.
Influencing Business Decisions
Core values serve as a decision-making framework, much like a well-worn path in a dense forest. They guide employees in interacting with customers, colleagues, and partners. When faced with tough choices, employees can lean on these values, making decisions that align with the company's ethos. It's akin to having a trusted friend whispering advice in your ear during challenging times.
On the flip side, it won’t help if transparency is on your list, yet no one talks about what just happened in the executive meeting until some formal announcement is made, and it turns out that it is far from the truth. This is where your employees will lose respect for your values and the whole company.
Defining Organizational Purpose
Core values communicate a company's larger purpose, inspiring employee pride and engagement. They're the lens through which everyone in the business looks for new opportunities and understands how to conduct themselves. For instance, Patagonia's core values (see below) clarify who they are and how they achieve success, motivating employees to be part of something larger than themselves.
Impact on Employee Engagement
This alignment significantly impacts employee engagement and performance. When employees feel their personal values resonate with the company, they're more motivated and fulfilled in their roles. It's like finding the perfect dance partner—when the steps align, magic happens.
Consistently practicing your values gives a strong signal of stability and a value statement to anyone interacting with the company. Core values steer organizations toward their goals like a compass guiding a ship through stormy seas.
Fostering Team Cohesion
Shared core values are the glue that holds teams together. They create a language and establish common goals, fostering a sense of unity. In a cohesive work environment, employees focus more on group success than individual achievements. It's like a well-oiled machine where each part works harmoniously with the others, resulting in increased productivity and innovation.
Attracting and Retaining Talent
In today's competitive job market, core values are like a magnet for top talent, and they are not just nice-to-have but must-have. Qualtrics says over half of U.S. employees choose their workplace based on core values. It's like finding your tribe—when personal values align with company values, it creates a powerful bond that boosts engagement and retention. This is exactly what will make your employees proud and happy to come to work and tell their friends—it’s fun working here!
Shaping Company Culture
When employees understand, share, and embrace these values, it creates a sense of unity and purpose. For instance, at Starbucks, values like inclusion and sustainability aren't just buzzwords; they're guiding principles that shape every aspect of their business strategy. In Southwest Airlines - ‘Fun-LUVing Attitude’ is one of the core values, and you will know this very well as soon as you board their flight…
Enhancing Operational Efficiency
When core values are actively living in a company, they enhance operational efficiency. They set clear expectations for employees, guiding their performance day in and day out. It's like having a well-oiled machine where each part works in harmony with the others. This alignment results in increased productivity, innovation, and ultimately, business success.
Case Studies: Successful Core Value Integration
Tech Industry Examples
In the tech world, core values play a significant role in positioning companies in the dense, rapidly evolving market and helping them differentiate themselves from the crowd.
Take Google, for instance. Their value, "Focus on the user and all else will follow," isn't just a catchy phrase—it's the compass that guides their product development. This user-centric approach has led to innovations like Google Maps and Gmail, which have revolutionized how we navigate and communicate.
Traditional Business Transformations
One notable example of core values driving business success is Patagonia, the outdoor clothing and gear company. Patagonia’s core values include environmental sustainability, quality, and integrity. These values are not just marketing messages but are deeply embedded in the company’s operations and culture. By staying true to its core values, Patagonia has achieved financial success and created a positive impact on society and the environment. Their values serve as strategic guiding principles that influence every aspect of their business, from product development to marketing and customer engagement.
When Southwest Airlines prioritizes employee well-being in its decision-making, it's not just being nice – it's strategically investing in customer satisfaction and, ultimately, increased profits.
3M, a century-old company, lives by the value "Respect our social and physical environment." This isn't just lip service; it's reflected in their commitment to sustainability and community initiatives. By aligning their actions with their values, 3M has transformed from a mining company to a global innovation powerhouse.
According to Gallup's research, such alignment can potentially increase profitability by 21%.
Start-up Success Stories
For startups, core values can be the difference between fizzling out and skyrocketing to success. Salesforce's value of "Customer Success" isn't just a banner on their office wall—it's the driving force behind their entire business model. This commitment has helped them grow from a small startup to a CRM giant, proving that when core values truly guide decisions, success follows.
How to define your core values
Your values are already there.
Whether you know them or not, your core values are well established within you. So, how do you find your core values? Reflect on yourself and your behavior. What situations made you happy and energized, motivated and eager to help? What companies did you enjoy doing business with (even as a consumer)? Why? Then, think about those moments that got you upset, uncomfortable, and shy away.
Not only will this reflection reveal your values, but it will also provide a deep understanding of why those values are so crucial to your company. Working with people who share your values will provide the same joy and belonging you had.
Narrow your list
Write down all those values that are important to you. This might be a long list of values, but not all are 'core' values. Those core values are the ones that, without them, you would not feel comfortable. Those are the must-haves and the ones you would demonstrate the most. Rank the list and try to narrow it down to three to five values that, if implemented - your company would be the place you always wanted.
Embed your values
Once you have a list of those core values, try to envision what it would be like to walk to a place that demonstrates those values. What would change, and how?
Try to think about the decision-making process and the way your employee handbook is crafted (if you don't have one, think of the guidelines you deploy).
Think about the way you interact with your customers and the message you deliver in your ads. In particular, think about the process you use to hire, evaluate, and fire employees. Are those processes driven by your values?
It all has to come together to form one coherent message.
Write a list of all the processes you have, and decide how those could be changed to reflect your values.
Conclusion
Core values are more than just words on a wall; they're the lifeblood of successful businesses. They shape company culture, guide decision-making, and have an impact on overall performance. From tech giants like Google to traditional companies like 3M, we've seen how living by these values can lead to innovation and growth. It's like having a compass that always points towards success, helping organizations navigate through challenges and seize opportunities.
To wrap up, core values are essential to building a lasting, impactful business. They create a sense of purpose, foster team cohesion, and help companies stand out in a crowded market. Whether you're a startup or an established corporation, defining and living by your core values is crucial to long-term success. Remember, it's not just about having values – it's about making them an integral part of your company's DNA, influencing every decision and action.
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