When working with companies on developing customer-focused growth cultures, I often get asked about this idea of a company core values list. It seems that every company has a core values list, but oftentimes the words used are similar — and they can be words that mean many different things to different people. Does a company core values list even matter, then? Will it drive your growth in some way?
Absolutely it matters — and yes, it drives growth.
Why does a company core values list matter?
When I wrote I Love You More Than My Dog, this idea was often top of mind for me: if you look at the ‘beloved’ companies mentioned in the book, the one major aspect they all have in common is that they operate from a different, elevated place. They’re guided by their core values; their company core values list is a living, breathing document and not just a one-off that HR eventually owns. That, I think, is the key difference between a great company that’s able to focus entirely on customer experience — and a so-so company that struggles often to focus on its customers.
Think of the living, breathing document idea this way: you can list your company core values all you want, and maybe a few scattered people in your organization will believe them at face value all the time. But what really needs to happen beyond the creation of the document is the leaders of the organization living out the document.
Every employee needs to see leaders living out the company core values list, because that in turn gives the employees permission to ‘model’ that behavior. For better or worse, people are always going to model the behavior of leadership in a company — so you need to make sure your company is in the ‘better’ column and not the ‘worse’ one.
The first tier of a company core values list
Let’s say a company lists one of its core values as “operate with trust.” (This is just an example, not any specific company.) If that’s a listed core value, but then employees regularly see back-stabbing and in-fighting among the leadership, the core value has absolutely no meaning anymore. But if those same employees see collaboration and silo-crossing among the leadership, they’ll start to think “Operate with trust does seem important, and it’s the way we do things here.” Now the core value means something.
That’s the first tier of a company core values list — making sure the core values (a) mean something and (b) are lived every day by the leadership, and thus modeled by the rest of the organization. If you get to this stage, you’re doing a good job — and you will be well-positioned to build a customer-focused growth engine.
The advanced stage of a company core values list
The more ‘advanced’ stage of having a company core values list is having that set of core values guide everything you do, including:
- Recruiting
- Hiring
- Day-to-day behavior
- Promotion strategies
The Container Store is a good example there: they hire less than 3% of applicants, but have a turnover rate of less than 10%. Many executives would love those numbers: you’re getting the best of the best applicant-wise and not losing them (thus keeping organizational knowledge in-house and potentially away from competitors). How does The Container Store achieve something like that? There are different approaches and considerations they take to hiring, yes — they believe 3 ‘good’ employees equal 1 ‘great’ one, for example — but the central idea is that they live their core values. There’s alignment between purpose, ideology, action, and behavior from the leadership on down. Even if your salary isn’t astronomical, most people don’t leave a place like that.
If you’re in the startup or entrepreneur phase of developing a company, there are a million and five things to do — from incorporation to processes and systems to legal needs and staffing. It can be overwhelming, and oftentimes a company core values list is one of the last things you’ll consider in a crush of day-to-day tasks. It honestly might be the most important if you want to become a company beloved by your customers, though.
What other companies have you seen or worked at that really live their core values?
This is both timely and important, as we see an increasing number of companies either poorly define or lose their values compass. In the 7S Framework management concept devised by Peters and Waterman now almost forty years ago, they identified superordinate goals, or shared values, as a critical operating pillar for any enterprise. In their book, Competing for the Future, Gary Hamel and C. K. Prahalad said “Visions that are as grandiose as they are poorly conceived deserve to be crticized, as do companies that seem to prefer rhetoric to action.”
I know that this was a core element of I Love You More Than My Dog; and, when I wrote The Customer Loyalty Pyramid twenty years ago, vision, values, and mission were thoroughly addressed as well. As you note, iidentifying and following core values directly impacts everything an organization does, or can do. It brings employees together to work for a common goal.
As an example of a company which made values reinvogoration an major projects, I’d cite Hallmark Cards. They created a statement of values called “This Is Hallmark” which was clear, concise, and positive. Other companies which have put a lot of effort into shared core values include Boeing, General Electric, Nordstrom, Honda, Sony, WalMart, Walt Disney, Levi Strauss, and Ritz-Carlton.
When stakeholder experience optimization is emphasized as a goal within the set of values, this is often the marker for a superior organziation. They are the basis for the company’s culture to grow and develop. As Karl Albrecht wrote in his book The Northbound Train, these values must be:
– Definitive – leaving no doubt as to the nature of the value provided by the company and how they conduct their business
– Identifying – leaving no doubt about the scope of products or services provided
– Concise – capable of being expounded in a single paragraph
– Actionable – leaving no doubt about how value is delivered
– Memorable – creating a lasting impression in stakeholders’ minds
Amen. I’d add strategy, leadership development, and decision making to your list of top places to integrate core values. Our e-book “Making Values Meaningful” provides a framework as well as some best-practice ideas – http://www.cvdl.org/meaningful. Thanks for your post.
Michael thank you for your as usual, very thorough and thoughtful reply. As you know, so much of the time, these are very high level statements, not tied to operational or leadership behavior. So everyone says “yes…we agree”- but the lack of explicitness in giving people permission to act and behaviors to model is mostly what is getting in the way of these core values living inside of an organization.
Amber, glad you brought up decision-making. Decision making is the litmus test — did the company choose to grow using the core values? Or did they choose to take actions that defy them because market pressure or other pressure led leaders to off course actions?