Why do values matter

Most executives understand the danger of consensus-driven decision-making when it comes to strategy, finance, and other business issues, yet they seem oblivious to the problem when it comes to developing values.

Surveying all employees about what values they believe the company should adopt is a bad idea for two reasons. And second, it creates the false impression that all input is equally valuable. Consider what happened when a CEO of a technology company agreed to let the HR department spearhead a values campaign. The best values efforts are driven by small teams that include the CEO, any founders who are still with the company, and a handful of key employees.

Tony Wild, the CEO of pharmaceutical company MedPointe, wanted his business to have a unique culture, so he knew better than to make the values discussion a democratic process. Working with seven top managers, many of whom had helped launch the company, Wild focused on two core values: a can-do attitude and the tireless pursuit of results. They might be a better fit at another company. It is far more important for a values team to arrive at a statement that works than to reach a decision it may later regret.

Executives should discuss values over a number of months; they should consider and reconsider how the standards will play out within their corridors. Allowing time for reflection proved helpful to an international pharmaceutical company that wanted to establish a common culture after a series of acquisitions. They discovered that the term held a very different connotation in Europe than it did in the United States.

What now? From the first interview to the last day of work, employees should be constantly reminded that core values form the basis for every decision the company makes.

Comergent, a young e-business company, has successfully created a strong culture around dependability, dedication, and self-motivation by integrating these core values into every system that directly touches employees.

During interviews, CEO Jean Kovacs and her staff ask frank questions about workload expectations and past accomplishments. People are evaluated against the core values, and when it comes time to award stock, bonuses, and raises, Kovacs and her team again use the values statement as a metric. Even the decision to let someone go is driven by values. Another company that effectively weaves its values into its organizational fabric is Siebel. Even bonuses and compensation packages are awarded on the basis of customer satisfaction surveys conducted by an outside auditor.

After a company has embedded its values into its systems, it should promote those values at every turn. Given the cynicism surrounding values these days, executives would do well to repeat them every chance they get. Many companies publicize their values on T-shirts and coffee mugs, but the most effective mechanisms are far simpler and less expensive. Consider how Nordstrom, a well-known example of a values-driven organization, constantly reminds employees of its core value of customer service.

During orientation, rather than receiving a detailed handbook describing how to deliver great service to customers, new employees are told elaborate stories recounting the lengths fellow employees have gone to in order to wow clientele. Values are also very closely linked to company culture. The culture will determine the look and feel of the values that are developed. As a result, it is vitally important to have a positive culture that all employees can buy into before developing a set of values.

As they are easy to claim — any company can put together a list of four or five bullet points and claim them to be important to them — they have become increasingly prevalent. Where the issues arise, is that they are much harder to live and breathe. The more they are discussed at every level of a company, the more they become real.

If they are left on a shelf to stagnate, the more cynicism around them becomes rife. The challenge for businesses in is in directly relating values to business performance.

The vast majority of those companies with values are not currently measuring any ROI on them. Our example company above that offers outstanding customer service may have metrics in place to measure the time it takes to reply to customers, NPS scores, customer satisfaction metrics and others in place to measure how satisfied their customers are.

Much more difficult to do however, is to tie this back to the impact that values have had on the business. This only further undermines values in the eyes of employees and stakeholders. Those companies that are utilising values to their utmost are doing far more than simply displaying them on corporate materials or in their foyer.

For values to be meaningful in an organization, they need to walk the halls, not just live on the walls. Making values come alive in an organization includes intentional steps of keeping them at the forefront of communications and actions. This can be accomplished through communication channels and systems of reward and recognition. If your organization has already established organizational values, it is helpful to periodically revisit the values to ensure examples of the values in action are clearly visible throughout the organization.

This simple process provides a great deal of information about how well the organization is living out its stated values. A process of sorting, categorizing, and discussing the words will lead to a refined set of organizational values.

Team members look to the leader to set the expectation. Leaders must lead by example and align their actions to the values of the organization. To become a credible leader, you must genuinely and consistently stand up for your beliefs and principles.

Huron is not a law firm; it does not offer, and is not authorized to provide, legal advice or counseling in any jurisdiction. This can, at times, lead to challenging situations or decision points. Before we give you a few examples of situations where values matter, try writing down five values that are important to you personally, then think of and write down three values important to your family and finally think of a group you are part of you can be a New Yorker, Texan, Episcopalian, American and think of three values you feel are important to this group.

It is Monday afternoon and school is done. You have a math test on Thursday. You feel pretty confident but this is a big test. How much do you value academic success and planning ahead?

How much do you value spending time with your friends, improving your basketball game, getting exercise every day? How much weight or importance do you give these values and whatever other factors you need to consider will probably lead to your decision.