Back in 1994, Jim Collins and Jerry Porras penned a book called ‘Built to Last’ which outlined the results of a six-year research project that looked at what exactly creates an enduringly great company. One aspect within it that was investigated was how the best companies adhered to a set of principles called core values.
This resulted in many managers trotting off and creating a set of core values of their own for their own businesses. But what exactly does it mean to have a set of core values? What are they? What should they say? How can you get them right so that they’re meaningful?
What are the benefits of having core values, if any?
What are core values?
According to Brighthr.com, the most effective core values tell the world what your company believes in, sets out your organisation’s priorities and guides your current and future activities.
What are the benefits?
- They can distinguish you from the competition
If you get your core values right, they can set you apart from others within your industry. In a world where there are lots of companies seemingly offering the same service or product this can be an advantage.
- It can improve employee performance
A report by Forbes points out that valuing the right things could influence employee efficiency.
It highlights Netflix’s ‘no vacation policy’, which allows staff to take time off when they need to.
Similarly, SchemeServe allows employees to work from home and enables them to work flexibly. One of SchemeServe’s values is ‘putting life, family and meaning first’.
It’s these things that enable employees to manage their work and private lives to obtain work/life balance. This has been proven to positively impact performance and efficiency.
- Values can improve employee engagement
At SchemeServe one of our values is to be ‘curious’. We openly encourage our employees to ‘always learn’, always ask ‘what if...? and why not?’. We also encourage them to ask open questions to really understand the original problem.
By asking employees to be curious we’re creating a space in which radical innovation can occur. We like to encourage employees to always look for a better way.
- It can attract and retain top talent
High employee turnover is a situation that should be avoided – it costs companies a lot of money to train new staff and the more staff come and go the more morale may be impacted.
Think about what core values you can instil within the business that will ensure that people don’t want to leave.
Creating this kind of environment will earn loyalty, respect and inevitably boost morale.
Why it’s important to get core values right
It’s important to get the messaging within core values right because if they’re too vague or fluffy they could come across as hollow or insincere.
Brighthr.com says that for them to be effective, they need to be relevant and inspiring, communicated clearly to employees and, most of all, embraced by managers.
The Harvard Business Review points out in a report how companies can get it all wrong.
It highlights that the words ‘Communication, Respect, Integrity and Excellence’ were once the very words used by Enron in their set of core values.
This is laughable today when you realise that Enron’s executives were charged with conspiracy, insider trading and securities fraud resulting in a $74billion (£59billion) loss for shareholders and were ultimately responsible for the eventual bankruptcy of the company.
The Harvard Business Review warns that getting it wrong can create cynical and dispirited employees, alienate customers and make everyone question the credibility of the company’s management.
For core values to work and be meaningful, it recommends that management must differentiate between aspirations and core values. Core values also need to be effectively demonstrated within the business to ring true for customers and employees.
There are many advantages to core values. But it’s important to set time aside to think about them and give them the attention they deserve.
But, ultimately, if management don’t adhere to them too (so they don’t practice what they preach) there’s a risk that employees and even customers won’t take them seriously because they’re viewed as adopting a double standard.