Understanding the importance of core values is something that I have been fascinated with ever since I read Jim Collins book, Good to Great. Core values form the foundation for businesses that persevere through time and major changes. An apt analogy is that of the growth of a tree; some trees have a quick growth spurts and on the surface seem majestic and beautiful. However, these trees have roots which do not support their level of growth and this impacts their ability to persevere over extended periods of time.
Core values act as roots for companies, laying the foundation as it were. In an ever changing world where the word ‘pivot’ has become synonymous with most startup companies, it has become of even greater importance that these core values are established as early in the growth cycle as possible. Without this, companies and people tend to drift. Their choices are then governed by external factors rather than an internal compass.
Discovering your Core Values
Core values are not a result of an afternoon brainstorming session. They originate from who you are as a person and a team. In your company right now, there will be a way of how things get done, how you communicate with one another and what factors are ‘non-negotiable’ deal breakers. They may not seem clearly apparent at first, however, with continuous searching they will always manifest themselves.
Clarity and simplicity are paramount when discovering your core values. They have to be simple messages that resonate with who you are and the people you want to work with. Unfortunately many companies setup these core values but pay nothing but lip service to them. These are often only the result of an intellectual pursuit paying heed to what would look ‘good’ rather than being representative of them.
There is no deadline as to when you need to establish these values. The important factor is that you make a concerted effort towards developing them over time. The key here is that you clearly define them since they will act as guiding principles. They will determine your hiring decisions, product decisions and just about every critical decision that needs to be made.
Running a Values Driven Company
Once you have your core values clearly outlined it is critical to incorporate them into everything you do. There are three major components where your core values play a critical role:
Hiring: The smartest and the brightest people have the ability to work wherever and with whoever they choose to. They don’t work for a company because of the salary or benefits plan. What they look for are companies who are aligned with their core values. This is what separates the great companies from the good ones. When a company does not have established core values where it can determine fit, you will end up hiring individuals who most likely will not have a shared work ethic. This is where companies breakdown, where communication suffers and everything comes falling down. Integrating your values into your recruitment process is a critical component to enable you to uphold the culture and values you want to live by.
Customers: We live in a very competitive world today. Edges and advantages that were previously derived from processes, intellectual property and size are no longer enough. The people whom we sell to, need to know why they should buy from you as compared to the next company who has a nearly identical offering. In most situations it comes down to who you are as a company and what you stand for. This is where your core values help you to stand out from the rest. If you truly live by them on a daily basis, this will be communicated to your prospects. When they find a shared sense of purpose in the way you conduct things, you make a far more authentic and lasting connection. This is what you need to strive for.
Internal Communication: As mentioned earlier, it is paramount that your core values become the basis of how you operate as a business. This requires us to integrate them into our regular activites such as performance reviews, employee recognition and internal communication. When evaluating the performance of an employee it is critical to see whether they are demonstrating the company’s core values alongside hitting tangible targets. When employees display these core values at work, they should be “recognized” as an example of how to live by these values. Lastly, all internal communication should have your core values as the underlying principle.
Running a “values driven” business is much harder than running one which only pays lip service to it and may cause short term loss of profits and growth. Hiring will be much harder and you will have to remove people whose values are not aligned with the company’s. However, optimizing for the short term always has long term repercussions, these will always outweigh any immediate gain. Hence, if you are committed to building and running a business for the long term, I would strongly advise and encourage you to make a decision to run a “values driven” company, sooner rather than later!