The Why Behind Company Core Values

The Problem

For the past few decades, organizations have felt compelled to issue various statements to describe their organization’s aspirations and ideals. Originally, it was limited to just a single statement – the mission statement.  But now, such statements include an organization’s mission, vision, corporate social responsibility viewpoint, purpose, principles, and company core values.  Leaders are then asked to align their people to these aspirational statements.  Yet how can alignment take place if leaders are puzzled about what these statements mean and do in the first place?

In addition, these aspirational statements are layered on top of the organization’s objectives and key results (OKRs), which are then measured by a myriad of complex metrics (key performance indicators, or KPIs).  It can be an alphabet soup of overload that leaves managers wondering which piece of guidance is the most important. 

Are such aspirational statements necessary? What are the differences between them and do the differences matter?  Do leaders understand why these concepts exist and how to use them properly?  This article will answer these questions and help leaders understand why one of these elements is far more important than the others.  

Key Definitions

To begin, let us take a moment and define each of the various concepts:

  • A mission statement tells the world what the organization does. 
  • A vision statement strives to paint a picture of what the organization wants to be when it grows up (the organization described in a perfect future state).
  • A corporate social responsibility statement (CSR) outlines the organization’s goals and values in its role as member of society, often focusing on issues of equality, human rights, working conditions, etc.  
  • An organizational purpose explains the problem(s) the organization is trying to solve for its customers. 
  • Finally, company core values and principles describe the organization’s culture.  These serve as the moral compass for the organization. 

This article will explain why company core values are the most important of these various tools and how a solid culture is built on the backbone of organization/company core values.  We define culture as:

A set of values, norms, guiding beliefs, and understandings that is shared by members of an organization and is taught to new members as the way to feel, think, and behave.

In other words, culture is “the way things are done around a particular place”.  The challenge is that culture exists whether you want it to or not.  It grows organically, and, if left unattended, it will absorb some good things, but a lot of dysfunction will find its way into the mix.  Deliberate culture, on the other hand is carefully cultivated and reflects deliberate attention to how the organization fulfills its mission, purpose, vision, etc. 

Many organizations believe the best way to define their culture and company core values is through a list of aspirational ideals that are important to the organization.  For example, an organization may state that “Care” is one of their company core values, and they may say something like, “At XYZcorp, we care about our people and our customers.”  What does that statement mean, however?  What should a leader at XYZcorp actually do to demonstrate caring?

Here is another example to consider.  At American Express they proclaim a belief in “Customer Commitment.” Yet again, what does that phrase mean?  Does this mean the customer is always right?  Does it mean the customer gets everything they want?  While values statements sound good and they help with branding and corporate image, these statements often fall short because they fail to teach an employee what to do.

Instead of listing aspirational values, an alternative approach is to define company core values through the process of designing and implementing core leadership competencies that every leader or associate is expected to follow and master.  To continue our analogy, let us examine what “Care” looks like under this approach.  The “Care” competency is defined by the following behaviors:

  • Demonstrates a personal interest in the well-being of others.
  • Makes time for other people.
  • Sympathizes with others meeting personal or professional challenges.
  • Provides help when others are overworked or stressed.

With these four behavioral statements, the leader has a much clearer understanding of what is expected of them, and they can take action to improve or develop in these areas. In addition, behavioral statements are something that can be quantitatively measured and analyzed.   

Preparing for the Unplanned

We made the claim that culture is the most important of the organizational aspiration tools. This is because culture is the way you address the unplanned challenges that inevitably arise.  A strategic plan tells everyone what to do and works really well when everything goes according to plan.  Assumptions turn out to be right, and future events unfold as expected.  If X happens, then do Y.  This is the easy stuff, and it almost never happens this way. 

As the professional boxer Mike Tyson once said, “Everyone has a plan until they get punched in the mouth.” In business, we get punched in the face all too often by unexpected challenges.  Assumptions prove to be wrong, markets change, or a pandemic stops the entire world in its tracks.  It is in these unplanned moments that culture takes over and becomes the mission, purpose, vision, and plan all rolled into one.   

The late Harvard business professor, Clayton Christensen, astutely observed:

Once members of the organization begin to adopt ways of working and criteria for making decisions by assumption, rather than by conscious decision, then those processes and values come to constitute the organization’s culture [company core values]. As companies grow from a few employees to hundreds and thousands, the challenge of getting all employees to agree on what needs to be done and how it should be done so that the right jobs are done repeatedly and consistently can be daunting for even the best managers. Culture is a powerful management tool in these situations. Culture enables employees to act autonomously and causes them to act consistently.” – Innovators Dilemma (emphasis added)

We agree with Professor Christensen!  By establishing “Care” as a leadership competency, then a leader will know how to shepherd a struggling employee who is facing a cancer diagnosis, a lost family member, or any other personal crisis.  They will make time to listen, demonstrate both empathy and sympathy, and provide help to keep their employee from being overworked or stressed.  They will know instinctually what to do. 

Find Your Company’s Core Values

In summary, we are not suggesting that mission, vision, social responsibility, and purpose do not matter.  They very much matter; but, in the day-to-day whirlwind of getting stuff done, we believe the better course is for leaders to first focus on the company’s core values and culture by defining for everyone the leadership competencies that each employee is expected to learn and demonstrate.  This route will teach employees how to behave in both the unplanned and planned moments they encounter each day. 

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