Establishing Your Values: Guiding Principles for Business Success
A company’s values are the bedrock of a successful business. They shape a company’s culture, guide decision-making, and define its brand identity.
As the O.C. Tanner survey I’ve mentioned previously shows, a strong company culture pays off handsomely. Companies in this study were tracked over an 11-year period, finding that those with a strong culture averaged more than 4x the revenue growth, 7x the net income growth and over 12x the stock price growth of those without.
Yet many businesses lack defined values or fail to actualise them, and so don’t develop a strong and cohesive culture.
In this article, we will explore the significance of establishing values and provide practical insights on how to identify, define, and integrate them into your business.
Understanding the Power of Values
Values are the core beliefs and principles that drive behaviour and shape a company’s culture. They serve as a compass, helping leaders and employees navigate challenges, make decisions, and interact with stakeholders, so building trust. Defining clear values creates a unified sense of purpose and boosts morale, differentiates your business from competitors, and provides a framework for consistent action.
Crafting Your Values Framework
Start off by understanding your values and creating the set that truly identifies your company.
1. Reflect on Core Beliefs
Begin by reflecting on your personal values and how they align with your business goals. Think about the principles originally shaped your vision. Consider what you stand for, what principles you want to uphold, and the impact you aim to have on your industry and community.
2. Involve Your Team
While your passions and beliefs as a founder often organically shape the business, you should involve others, too. Values should be co-created, not dictated, so engage your team in conversations about what they consider important. Seek input from customers and other relevant stakeholders, as well as employees, asking what they most appreciate about your company. This inclusive approach ensures that the values resonate with everyone, fostering a sense of ownership and commitment.
3. Identify Non-Negotiables
Pinpoint values that are non-negotiable for your business. These are the principles that guide every decision, from hiring to partnerships. Non-negotiable values ensure consistency and integrity across all aspects of your operations.
4. Align with Business Strategy
Your values should align with your business strategy. For example, if innovation is a core value, your strategy should prioritise research and development. This alignment reinforces the integration of values into everyday practices.
5. Craft Clear and Actionable Statements
Transform abstract concepts into actionable statements that guide behaviour. For instance, if collaboration is a value, turn it into “We collaborate openly and inclusively, leveraging diverse perspectives to achieve our goals.”
Bringing Values to Life
Once you’ve established your unique set of values, for they are unique to each business, you need to bring them to life and ensure they are understood and embraced by everyone.
1. Embed in Culture
Values should be woven into your company’s DNA. Align policies, processes, training and reviews to reflect expected behaviours. Weave values into operations to transform them from words into habits and culture. From the hiring process to performance evaluations, ensure that your values play a central role in shaping your organizational culture; values solidify when consistently modelled and practiced.
2. Lead by Example
As a leader, embody the values in your daily actions. Your behaviour sets the tone for your team, reinforcing the importance of living the values.
3. Communicate Transparently
Share your defined values with your team, clients, and partners. Launch the values through company-wide communications, workshops, signage and regular reinforcement. Highlight positive examples of the values in action through stories and recognition. Transparent communication about your guiding principles enhances trust and fosters meaningful relationships.
4. Empower Decision-Making
Encourage employees to make decisions aligned with the values, providing them with training on how apply these values in their day-to-day work. This autonomy empowers them to act in the best interest of the company’s long-term vision.
5. Celebrate Alignment
Recognise and celebrate instances where individuals and teams embody the values. This positive reinforcement reinforces their importance and encourages continued commitment.
Keeping Values Current
Remember, though, that your values may evolve as your company grows and changes, and as the environment changes. It’s important to regularly revisit and refresh your values to ensure they remain relevant and aligned with your company’s direction and the needs of your customers.
While refreshing values, retain core elements that make your culture special, balancing continuity with adapting values to new realities. Updating while preserving your essence sustains authenticity.
The Impact of Values
Establishing values isn’t just an exercise; it’s a strategic move that shapes the trajectory of your business.
- Guiding Light: Values serve as a moral compass, directing decisions and actions even in uncertain times.
- Cultural Foundation: Values create a strong organizational culture that attracts like-minded individuals and fosters collaboration.
- Brand Identity: Values differentiate your brand and attract customers who resonate with your principles.
- Decision Filters: Values provide a framework for decision-making, ensuring consistency and alignment with your purpose.
- Long-Term Success: When values are authentically lived, they drive sustained success by guiding growth and nurturing relationships.
Conclusion
As business leaders, we often find ourselves caught up in the day-to-day operations of our companies. Meetings, emails, and endless to-do lists can easily consume our time and attention. However, amidst the chaos, it is essential to take a step back and reflect on the core principles that guide our businesses – our values.
Your values are a testament to your business’s identity and purpose. By involving your team in crafting values, embedding them in your culture, and consistently living by them, you’ll not only set your business on a path to success but, as Elvis Presley put it, also leave your unique fingerprints on everything you do.
In the words of management guru Peter Drucker, “Culture eats strategy for breakfast.” So take the time to establish your company’s values, for, as research has shown, companies with strong, shared values outperform their competitors and achieve greater success.
Does your company have clearly defined values that guide behaviour and decision-making?
Share your thoughts in the comments below.
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If you’d like learn more on this topic, the following articles and posts might be of interest.
Other posts in this month’s focus on Defining Your Purpose and Values:
- Finding Your Why – “People don’t buy what you do, they buy why you do it.” – Simon Sinek
- Crafting Your Vision – “Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion.” – Jack Welch
- Defining Your Mission – “Mission statements guide you to do the right thing when you’re standing at a crossroads and don’t know which way to go.” – Anita Campbell
Related Posts:
- “Company culture matters. How management chooses to treat its people impacts everything for better or for worse.” – Simon Sinek
- “Corporate social responsibility is a hard-edged business decision. Not because it is a nice thing to do or because people are forcing us to do it… because it is good for our business” – Niall Fitzgerald.
- Going from Good to Great – How Companies Achieve Greatness
- Top 10 Things Your Business Culture Needs to Focus On for Success
- 10 Principles for a Sustainably Excellent Culture – Beginning With “We”
- Top 10 Things Your Business Culture Needs to Focus On for Success
- From Good to Great: How Employee Recognition Can Transform Company Culture
- Does Your Business Strategy Match Your Company Culture? The Risks of a Mismatch.
Backgrounders:
Forbes: Core Values: What They Are, Why They Matter And How They Can Transform Your Business
Harvard Business Review: Create Stories That Change Your Company’s Culture
Zappos: What We Live By
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