Core Values Define Your Company’s Decision Making
According to an article by Patrick M. Lencioni published in the Harvard Business Review, there are different types of values – core values, aspirational values, permission-to-play values, accidental values. In my opinion, the most important value to address in your business is core values.
A quick Google search on core values will bring up the definition of core values: “Core values are what support the vision, shape the culture and reflect what the company values. They are the essence of the company's identity – the principles, beliefs or philosophy of values. ... Core values help companies in the decision-making processes”.
That is a great definition, but I would like to challenge one particular word in this statement. Should core-values “help” companies in the decision-making process? I would propose that core values should be the driving force behind all your decisions.
Let’s dig deeper into what exactly core values are. They are the reason the company exists - the “why” of the company - the fundamental guiding principles of the organization. They are the principles by which your company lives and breathes by. Core values do not change and should never be compromised - regardless of the economic climate to which the company operates or possibility of short-term gain. They are timeless, not strategies or operational statements. As Jim Collins says in his article Aligning Actions and Values, “your core values and purpose, if properly conceived, remain fixed. Everything else—your practices, strategies, structures, systems, policies, and procedures—should be open for change”. They can always end the question “we believe in….”
Core values statements should also not be “fluffy”. In conversations with both business owners and employees, I like to ask, “what are your company’s core values?”. Often, I get a blank stare – the company either doesn’t have core values or they are printed on a document and filed away somewhere never to be seen or practiced. Where the individual knows the company’s core values, they often don’t know what they mean. The statement is what I would describe as too fluffy. For example, I asked someone who rattled off ‘integrity’ as a core value of the company they owned. I asked the business owner “how do you define integrity?”, and “what does that mean to you?”. Once again, I got the blank stare. Don’t get me wrong – integrity is a great value to have – but only if the people who own and work at the company really know what it means. If a core value is too fluffy, if people do not actually know what the statement means, it is difficult to drive the decisions of the organization in a meaningful way.
A core value statement should pass these simple tests:
- Is it timeless?
- Can they be used as the basis for all company decisions regarding strategy, policies and procedures?
- Is it fluffy, does it pass the “so what” test?
Let's review an exampel of a core value statement from Boeing:
“Safety – We value human life and health above all else and take action accordingly to maintain the safety of our workplaces, products and services. We are personally accountable for our own safety and collectively responsible for each other’s safety. In meeting our goals for quality, cost and schedule, we do not compromise safety”.
- Is it timeless? Yes.
- Can they be used as the basis for all company decisions regarding strategy, policies and procedures? Yes.
- Is it fluffy? No.
Imagine for a moment that safety of human life was not defined as a core value of Boeing - that it was not a driving force in all their decisions around strategy, policies and procedures. Think of all the decisions that are driven by this value – finance, quality control, human resources, engineering, supply chain, etc. Imagine that this core value wasn’t a factor they use to drive their recruiting decisions. Let me ask you, would you want to get on one of their planes?