Back in October 2019, our very own Mary Jones wrote an article on What’s the Value in Values? As we approach 2024, the importance of Values in driving the success of an organisation hasn’t gone away, in fact, it’s probably even more important than ever. So, we’ve dusted down Mary’s article and refreshed it to provide our latest insights.
What are Values?
Values are the guiding principles that an organisation uses to govern its actions and decisions. They are important because they shape the culture and atmosphere of the organisation. Company values also serve as a guide for people to make decisions that are aligned with its Purpose, Vision and Mission. They answer the question “What do we stand for?”
So what about Purpose, Vision and Mission?
Purpose answers the question “Why?”. Why do we do what we do? Why do we exist? The answer to this question should go beyond making a profit. It looks towards the long-term effect the organisation wants to have on its people, customers, markets, stakeholders, community and the environment. In other words, how will the organisation’s existence benefit others?
A Vision statement describes the organisation’s desired future state. What does the organisation aspire to be? Where does the organisation want to go?
A Mission statement describes what the organisation does and for whom (in an inspirational way). It basically answers the question “What do we do?”
What’s the purpose of having stated values? Is there any point? What are values?
Values are the bedrock on which the culture of a company is built. And the values should derive from the company’s Purpose, Vision and Mission. Together they form the “golden thread” of ‘how we do things around here’.
In our article on Vision, Mission Values and Culture, we quoted Ben and Jerry’s vision of: “Making the Best Ice Cream in the Nicest Possible Way.” This company has derived its values from this statement, encompassing moral, ethical, financial and business values. And from what is available to read, the culture of the company supports these values.
If the values are the bedrock, the culture on which they are built must match. If not, it’s like building a house with poor or no foundations. It’s going to fall down, sooner or later.
Are there ‘Right’ and ‘Wrong’ Values?
Imagine three companies: Company X, Company Y and Company Z.
This is not a question about the moral requirement of values. If the underpinning principle is that the values must evolve from the Purpose, Vision and Mission, then values which do so are the ‘right’ values for the organisation.
If the point of company X is only to make as much money as possible in the shortest time, then the values will be about energy, self-preservation, hard work, boldness, etc. And to attract candidates who will thrive in this organisation, the company will talk about the highest rewards for the best performers. They’ll also mention the opportunity to fly high, gain personal wealth, be a good individual operator, no need for teamwork, weakest to the wall, etc. For some this may be repugnant but in the context of its own environment it will probably succeed. Virtuosity and morality are another issue. And caring about whether other humans may be adversely affected by such values is not something that will cause this company to lose sleep. But, ultimately, the company is acting in a way that is in line with its values. Morally toxic, possibly, but congruent.
Company X tends to be in the minority, as the context in which it can thrive is limited. A larger set comprises Company Y. This is a company that values its employees. It has a Purpose, Vision and a Mission that its employees probably can’t remember, and its stated values will include some of the classics, such as Integrity, Accountability, Diversity, Employee Development and Teamwork. For a company that wants a decent set of values, the list of nice words is endless.
However, Company Y has selected its values from a ‘pick and mix’ list to demonstrate what it thinks it should be like, to advertise its brand to its customers and to attract good employees. The problem for Company Y is that these carefully chosen values are discrete. Although they bear a relation to its Purpose, Vision and Mission, having been chosen for the wrong reasons, give rise to a toxic culture.
And finally, there is Company Z, a larger group than X. Company Z has a compelling Purpose, Vision and Mission and has spent time ensuring that its values will reflect these.
It has also studied and understood two crucial issues:
1. The concept of a career has changed. In their September blogpost, The Predictive Index quotes the statistic that “the average employee has been at their current company for 4.2 years. That statistic declines to 2.8 years when looking at a millennial demographic, the largest generation in the workforce. This means that employees aren’t afraid to jump ship when faced with a toxic workplace and if it’s your high performers jumping ship, you’re in trouble.”
2. “A company’s values should never really change. They are the bedrock underneath the surface that will be there in 10 or 100 years from now. They are the uncompromising core principles that the company is willing to live and die by, the rules of the game.
Where is the Value in Values?
Knowing their company’s values as well as the Vision and Mission should give employees a good sense of its Purpose, helping them when they have important decisions to make. We live in an age of rapid change and advancement and the need to keep up is constant. The company’s values can provide a sense of what is right, and what should be consistent when important changes are needed.
The fact that a company has a well-defined and public set of values will form part of its attraction. This attraction will be for the best staff, who are more likely to stay at a company. This in turn will lower turnover costs as well as giving the company a stronger competitive advantage. And it’s not only the potential high-flyers who will be attracted. Potential clients with similar values are more likely to trust a company that can show how it embodies its values.
We are not going to tell you in this article how to define your own values, if you haven’t already done so. Petaurum can help with a process, ideas and methodology. But the first decision is to realise how important an issue is, knowing your own values and realising their potential for your business success.
The only recommendation we make is that you don’t just have a long list of words. Keep it short. Keep it memorable and keep it snappy.
And most important, be true to yourself.