I’ve noticed a common cause of many employee problems in small businesses, the company’s core values.
Let me explain.
Often, someone in the organization is not doing what is expected of them, and as we will see, that behavior is driven by an individual’s core values.
When you dig a bit deeper, this behavior problem then breaks into two drivers:
- A company’s core values have not been defined, so the offending behavior is just accepted. In other words, the expectations around what behavior is acceptable have not been defined.
- A company’s core values have been defined, but no one takes them seriously. They are not communicated or used as a way to align behavior. This is almost worse because everyone knows the core values, as stated, are just lip service.
In this post, I hope to dive deeper into company core values and the massive impact they can have on your company.
Let’s start with the basics.
What Are Core Values?
Let’s break this down into its parts and define each:
Values – “principles or standards of behavior.”
Core – “a central and often foundational part.”
So “core values” are central or foundational standards of behavior.
Everyone has core values. What you may consider an acceptable standard of behavior, another person may not. You cannot force your core values on others.
So What About “Company Core Values”?
When it comes to your company’s core values, according to Jim Collins – “the task is to find people who are already predisposed to sharing your core values. You must attract and then retain these people and let those who aren’t predisposed to sharing your core values go elsewhere.”
Using our definition from before, company core values are central or foundational standards of behavior that the company holds.
Company core values are how everyone in the company is expected to behave.
Once you’ve defined your company core values, you can use these as a way to define the people you are looking to assemble. You want people who share the same values.
If you have not defined your company core values, it’s entirely possible some of the people in the company do not have the same core values as you. This difference is where the problems begin (more of this later). I have written about this before, but core value clarity (or the lack thereof) has a huge financial component.
How Do Core Values Help Your Company?
It should be easy to see how having a clear set of company core values can help drive behavior within a company.
Let me give you an example from the movie The Founder.
The movie details the story of how McDonald’s started. Ray Kroc stumbles upon the McDonald’s brothers, Richard and Maurice McDonald attempting to sell them milkshake machines. Fast forward a few years, and the three gentlemen are now partners with Kroc driving the company forward, signing up multiple franchisees.
It’s portrayed in the movie that Kroc and the McDonald’s brothers have different core values.
To increase profit, Kroc wants to begin offering milkshakes made from a powdered mix vs. real ice cream. The McDonald’s brothers feel strongly this is a drop in quality to make a buck.
This tension between the three continues until Kroc finally buys the two brothers out.
All this tension and conflict was a core value problem. Kroc and the McDonalds brothers did not have the same core values regarding how quality was defined.
This is why it’s absolutely critical that owners have the same core values. This cannot be assumed.
Core values help the organization to make decisions and move faster. When core values are not agreed upon, they slow things down and cause conflict.
Company core values prevent debates and arguments from happening since things are decided in advance.
How Is Culture Related To Company Core Values?
There is a lot of talk about “culture” lately. What is culture?
Edgar Schein, former MIT professor and expert on organizational culture, says company culture springs from three sources:
- The beliefs, values, and assumptions of the founders or the organization
- The learning experiences of group members as the organization evolves.
- New beliefs, values, and assumptions are brought in by new members.
You can see that culture is initially based on the founders’ beliefs, values, and assumptions (their core values).
According to Painter (2019), “Senior managers actively manage culture, set the stage for what is rewarded and punished, and model what is acceptable in the organization.”
In the beginning, it’s easy to keep your arms around the culture (core values) since, as an owner or founder, you are hiring everyone and can have a strong influence on employee behavior. Often those that don’t have the same core values as you don’t stick around very long.
Even if not defined, your company currently has a culture (a set of core values). This culture may not be explicitly stated, but it still exists.
If you’re not careful, the culture can evolve in a direction that you do not want. As you grow, It becomes more and more difficult to control directly.
Also, consider that some cultural elements may be due to your own poor behavior (no one is perfect).
New members enter the company and employees with longer tenure leave. The situation is made worse, the faster you grow.
Bad Cultures Are A Result of Bad Core Values
You hear people talk about a culture of corruption or a culture of sexual harassment or a sales culture, as in the case of Wells Fargo. All these cultures could be boiled down into a set of behaviors that are tolerated or rewarded.
Of course, there are great cultures like N2 Publishing and Fusion Medical Staffing. Again these great cultures are based on behaviors that are supported and applauded.
You can see that if you don’t explicitly define the company core values (central or foundational standards of behavior), the company can easily drift off course. As a leader, you must be open about how your own negative behaviors may be driving a poor culture.
How Do You Define Your Company Core Values?
Hopefully, I’ve been able to convince you that having clear company core values is important AND that you already have company core values even if you haven’t written them down. These make up your culture.
If your company’s core values are not yet defined, how do you got about defining them?
There is an exercise I’ve used in the past to discover your company’s core values.
- Step 1 – Identify 5 people in your company who are stellar employees, and if you could hire other people just like them, you would do it all day long.
- Step 2 – Write down the top 3-5 characteristics of that star employee. What are the fundamental behaviors that this employee exhibits on a day to day basis?
- Step 3 – Develop a list of your top 10-15 core values.
- Step 4 – Rank order the core values
- Step 5 – Pick the top 5 core values.
- Step 6 – Add a description of the core value.
For example, one of our core values is “Alignment.” If we were to say our core value is “alignment,” it could be interpreted a bunch of different ways.
To drive greater clarity, we define what we mean by alignment –
“Poor alignment can waste valuable resources, cause confusion, prevent growth, and destroy company culture. Having a clear path maximizes resources, energizes employees, accelerates growth, and creates magnetic cultures. True clarity has a multiplicative effect. We will work hard to make sure everyone in the organization understands the company’s direction and how they fit into the overall strategy. We will work hard at ensuring we are working on the problems our customers want to be solved.”
You can see that we don’t just write a word; we try to give everyone a greater understanding of what we mean by “alignment” and what we think is important.
- Alignment is critical for results
- Clarity is also important
- Communication of direction is important
- Helping people to understand how they fit into the strategy is important.
- Staying on the same page as our clients are important
This conveys a great deal of information about what we expect at Envisionable.
How Do You Maintain Your Company Core Values?
Having core values is not the hard part. The hard part is maintaining those core values.
To maintain your core values and avoid the problems we talked about at the beginning of this post, you need to do a few things.
Remind Your Team What Your Core Values Are – Often
People “respect what you inspect.” You must have some process for sharing your core values with your people regularly. You must catch your employees doing something good and tie it back to your core values.
Actually, Live Out Your Core Values
If you don’t actually believe in your core values, none of this will work. If your employees see you violating a core value or your partners or management team don’t abide by them, this exercise will fail.
You need to have a gut check on the core values and if you truly believe them.
Hold People Accountable To The Company Core Values
Once you have your core values in place, you need to keep people accountable to them. How do you do this? It’s tough. It involves having tough conversations with people. The most effective way is to catch someone doing something good.
I hope this blog post helped you to get a deeper understand of core values and how defining and maintaining them can make your life as an owner much easier.
If you’d like help defining your core values, schedule a free strategy call.