5 Problems With Corporate Values and How to Fix Them
James Collins and Jerry Porras said it best in their book Build to Last when they pointed out that values, which come from you or your organizations core ideology, come from within. In other words values must be authentic and if the leaders in your organization do not already have the values you seek to promote across your organization, they can’t simply borrow them and pretend to live them.
A company’s value system is no different than an individual's one in that value systems lay the foundation for what is deemed appropriate and what is not. The difference is that in an organization, the values chosen must become shared beliefs by everyone working there: from the part-time clerk to the CEO. These corporate values are meant to recognize what will make one organization different from another in the way every employee, regardless of rank or seniority, will treat every other employee, customers, and partners. They are also used to make important decisions including who gets promoted. Over time, corporate values help shape the character of your whole organization.
Here are 5 of the biggest problems with corporate values and why many companies still don’t get it:
1. They are not seen as strategic enablers
The world’s best companies have understood one thing. Values are as important as vision and mission statements and strategic business objectives for capturing a strategy. That is because a company’s values should be as much a reflection of how you want your company to work as who the customers want their favorite company to be. In other words, strong and repeatedly demonstrated corporate values offer a strategic advantage.
The Fix. Take the time to understand what customers value most and what positive behaviors have been missing in your industry in terms of values and beliefs that would change the game for your clients. If you start there, you will find the golden nuggets on which to anchor your strategy.
2. They have become generic
So many companies have chosen generic values that mean nothing to anyone or are left for individual interpretation. How many companies have teamwork or customer centric/focus, but what does it mean?
The Fix. Don’t just pick a value, define what each value actually means to your organization. Express specifically how the values selected will manifest themselves in the day-to-day. In other words, how will you know when you are witnessing that value in action?
3. They have been taken over by non-value related statements
I have seen the following, or a version of it, in so many value statements: create shareholder value. Since when has making money become a value? The goal of many companies is to make money but that is not the same thing as how people will interact, behave, and treat one-another on the way to making money.
The Fix. Do a little research on what constitutes a value and make a long list. With this list now in hand, you can work with your leadership team to select those values that are most important to your organization and define what each one means to you.
4. They are not enforced
Even when great value statements are brilliantly displayed on company walls and websites, one often finds a major gap between what is stated and what is accepted as good behaviour. This is where you find organizations who have some people in charge that believe the value statements are for the rank and file but not for them, where you will also find annual performance review forms that do not include the demonstration of the values as part of the rating system, and where people can get promoted who knowingly disregard the values when it suits them. How many organization claim diversity as a value and yet the leadership team is predominantly male, or of one race or ethnicity? How about claiming collaboration but in practice spending more time rewarding individual mavericks rather than teams? How many companies have transparency as a value but allow their leaders to remain opaque and not share important information?
The Fix. Enforce your values via your annual performance and reward systemsand focus your promotions and rewards on those employees that are role models for your values.
5. They are not recruited for
Too many companies do not look for the corporate values when hiring new talent.
The Fix. Moulding the character of a whole organization takes time but can be speeded up if you make sure that your hiring process includes an objective evaluation of the values you seek to promote. Create a set of questions and tests that will validate whether or not the people applying for jobs have the values you seek.
Done right, corporate values can position your company to be different and have that difference recognized by your customers in the form of loyalty and increased market share. Take the time to get them right. And if you have leaders faking their way through, it’s time to sit them down and have a discussion.