Essential Guide to Company Core Values

INTRODUCTION

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Core values are the deeply ingrained principles that guide all of a company’s actions; they serve as its cultural cornerstones. Harvard Business Review succinctly defines core values as being inherent and sacrosanct; they can never be compromised, either for convenience or short-term economic gain. Defining, communicating and living core values is essential to productivity and success in the marketplace.

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Examples of company values

Core values should be what your organization wants to see in itself and its employees. Some examples are:

• Loyalty
• Honesty
• Trust
• Ingenuity
• Accountability
• Simplicity
• Respect
• Value-centricity

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Why are core values important?

From a business perspective, having a core set of company values makes it easier for a company to make decisions, foster teamwork and help employees collaborate, quickly communicate principles to clients and customers, and hire employees with the right attitude.

The way we see it, creating a business is a bit like creating a community: if you want the community to act as a group, you need a shared code/vision/identity/ethos, an organizational culture that drives whom you choose to invite in and how the community functions as a whole. If you don’t own, define, and care about the values of your community, they will evolve on their own, potentially in ways that are damaging to the organization.

Establishing and communicating core values to employees, candidates, customers, and clients offers many benefits. Once established, core values help businesses make important decisions and keep everyone on the team focused, particularly during times of challenge or change. Core values are also a useful tool for recruitment—companies can structure applications and interviews around their core values to ensure candidates they hire align with the company’s most essential beliefs.

Similarly, core values are excellent tools for customer or client education. When clients understand what the business’s core values are and see how they align with the sales process, they’ll more than likely trust the company.

Overall, core values are unifiers. Whether it’s connecting leadership to employees, employees to customers, or customers to a sense of trust, core values bring people and elements together.

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Chapter 1

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Company core values vs mission, vision, and goals

Let’s quickly define mission, vision, and goals.

Mission statement

Your function and purpose—what you do, who you serve, and why.

Vision statement

What you hope to achieve, inspire, or solve for the greater good, the bigger picture of which your mission is a part.

Goals

These are the tangible outcomes that contribute to overall revenue growth and moving the company forward.

Core values can both inspire and support a company’s mission, vision, and goals. Most importantly, they provide guidelines on the most ethical, unified approach to achieving those goals.

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Why you need company core values

• More than 63% of consumers prefer to purchase from purpose-driven brands.
• Highly engaged employees can increase performance by 200%.
• A culture that attracts high-caliber employees can lead to a 33% revenue increase

Translation? If you want more customers, better performance, and higher revenue, you need to have a purpose-driven culture of engaged employees. In fact, one study by Forbes shows that workers are willing to earn less money if it means working in an organization that’s closely tied to their own personal beliefs. And this cannot happen without established core values. Here’s why:

Improve output

For most organizations, each department has its own unique profile. The sales team has a different mindset from the web team. Content marketers have a different focus from product marketers. But like a human being, separate systems are needed in order for the whole to operate properly.

Core values are department-agnostic, serving as the common thread that brings everyone together to create one collective “us.” Unified operation translates into output that is greater than the sum of its parts.

Make better decisions

Businesses are run by great minds that don’t always think alike—diversity of perspectives is important. But that also means there will be moments of disagreement. When faced with predicaments and tough decisions, company core values can serve as an objective, true north compass to an agreed-upon best course of action.

Gain a competitive edge

Every company is made up of individuals with unique skill sets and personalities. While KPIs bring skill sets together to accomplish tangible goals, company core values bring personalities together to create a firm identity. A firm identity gives way to better branding which gives a business its competitive edge in both marketing and recruiting.

Motivate action

A truly core-value-based company facilitates, encourages, and recognizes demonstrations of those values among its employees. With a clear picture of what their company stands for and the positive outcomes this brings, employees are inspired to take meaningful action that goes beyond KPIs and metrics—leading to more fulfillment and engagement (not to mention more success for the company).

Improve customer service

Company core values produce teams of employees that are fulfilled, motivated, engaged, and inspired to do their best work. When employees believe in both themselves and their company, better deliverables and customer service follow. This translates into micro-interactions that customers pick up on, write reviews about, and share with others.

Build your reputation

Every person in the company has a different role. Your company core values guide the way team members can carry out their role. Consistent, meaningful behavior between employees and with customers, partners, and vendors speak volumes to the integrity of your brand and its overall reputation.

Become resilient

Today’s workforce is more transient than ever. But when a company hires, fires, and operates according to a steadfast set of core values, it is prepared to withstand changes in staff, losses in leadership, or even entire reorganizations.

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How do core values enhance employee experience?

Recruiting talented employees is often the easy part. The challenge is to keep them loving the job and staying with your company. Employee satisfaction is important. Employee attrition costs businesses dearly – the average costs to replace an employee are:

• $1,500 for hourly employees
• 100 to 150% of a technical employee’s salary
• Up to 213% of a C-suite executive’s salary

Having core values lowers the attrition rate, helping businesses engage their employees more effectively because:

1. They give a framework that tells employees, right from the beginning, what kind of organization they are joining and what their roles as team members will be.
2. Employees have clear expectations of what they will be doing, giving them security and a sense of belonging. The more an employee feels they belong and are secure, the more engaged and productive they will be, and will go the extra mile.
3. There is less disillusionment as recruits know exactly what they signed on the dotted line for, and are less likely to leave.
4. Employees are not afraid to challenge management to live up to the same standards as the rest of the workforce, e.g. when a company prides itself on being transparent, senior managers must expect to answer tricky questions about things like remuneration, budgets, ethics, and investments
5. Core values that resonate with the public create not only a competitive advantage but give employees a sense of pride that they work for a well-regarded company.

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Chapter 2

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‍Do organizational core values deliver a return on investment?

The short answer is yes. And the longer answer is also yes! Research has shown that when sound corporate values inspire excellent company culture, there can be positive impacts on:

• Revenue: increases 4x faster
• Cost per hire: 50% savings
• Recruitment fees:  22% reduction
• Employee engagement and profitability: when investments in employee engagement are increased by 10%, profits can increase by $2400 per employee
• Employee retention is dramatically increased
• Customer satisfaction doubles

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4 elements of effective company core values

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Lead with your vision statement

A vision statement describes an ideal vision of the impact a company will have on the world.

Your core values are the principles that support this vision: before you can articulate effective company values, you need to think about what impact your organization can have on people (even if it’s a tiny niche) and write a sentence that sums up that ideal scenario.

Keep your values unique

We’ve all heard values like ‘think big’ or ‘be curious’ from a handful of giants like Netflix and Amazon; it’s not unusual that smaller companies are influenced by them and end up having similar values.

This isn’t necessarily a bad move, but an effective core value should be unique to your organization and experience. It’s easier to hide behind sweeping formulas that sound great but don’t really apply to you—so if you are a 100% profit-driven organization, embrace that. Use your values to make sure you hire people that think in the same, unique way.

Make values simple to understand and remember

There’s no point crafting the perfect set of values if nobody in your company can recall them. A short, bulleted list of simple, single-sentence values will be easier to remember in everyday working life and help guide your team’s decisions.

Evolve your values over time

When your organization grows, the values you wrote early on might not be completely relevant to where you have arrived. As new opportunities and challenges arise, you may need to update your values. Dynamics change as the number of employees grows, and different things become more or less important.

Re-examine company values as your team grows and get feedback from existing employees to help guide the process.

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Chapter 3

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‍How to establish your company core values

Core values should be a mix of those that describe your company as it is now as well as what it strives to be and reflect your company culture. They should celebrate but also motivate; evoke pride but also inspire action.

Note: For a smaller company, a full team meeting might be all it takes!

Consult your employees

Send out a survey to your employees and ask questions about what’s important to them, what they prioritize when interacting with customers, what they like about working for the organization, and what they’d like to see more of – this is imperative for building trust.

Don’t explicitly state that you’re trying to determine core values. Leave it open-ended so you can pick up on patterns and translate them into core values that use the language of your employees.

Ask your customers

Talk or send out a poll to your customers, asking them for feedback like what stands out to them about your business, why they choose your business, and what keeps them coming back. Read reviews and see if there are any common themes, and always have an open-minded approach to the feedback.

Look back on key events

Think about memorable experiences in your organization’s past – positive and negative. What actions were taken (or not taken) that made them memorable? Use this information to collect anecdotal clues about your inherent core values.

Map it out and whittle it down

Compile all of this information in one place and see what kinds of patterns you can pick up on. Whittle it down into a list of ten or so values that reflect the input. Afterward, hold a meeting with select team members to brainstorm the three to five core values that make the most sense. Once decided, share these values with key stakeholders.

Describe them using your brand voice

Now it’s time to use your marketers and content writers. Core values can get pretty redundant and generic. Come up with unique names and [short] descriptions for those core values that match your brand voice. Feel free to make up words and get playful here.

Make them known!

Display your core values in a location in your office where employees can see them every day. Start off meetings with a core values slide and give employees an opportunity to recognize team members who have demonstrated them (that’s what we do!). Instate a company-wide core values award every month, where anyone can nominate anyone (we do that too!). Your core values should be evident in every employee experience.

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Successful company core values examples

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IKEA

Swedish home furnishings giant IKEA’s mantra is:

‘We’re constantly trying to find better ways to get things done and to bring out the best in ourselves and others.”

IKEA’s core values are:

• Togetherness
• Caring for people and the planet
• Cost-consciousness
• Simplicity
• Renew and improve
• Different with a meaning
• Give and take responsibility
• Lead by example
  

Ben & Jerry’s

Quirky, hippy, homespun Ben & Jerry’s calls itself ‘an ice cream company, but with a heart and soul’, founded on strong and transparent core values.

“It’s rare that you are encouraged to bring your values to the workplace. This is a place where, if you have these values, please bring them with you.”

Ben and Jerry’s values statement is in three parts:

• Product Mission ‘drives us to make fantastic ice cream—for its own sake’
• Economic Mission ‘asks us to manage our company for sustainable financial growth’.
• Social Mission ‘compels us to use our company in innovative ways to make the world a better place’.

Google

Without Google taming content on the world wide web by ranking search results by popularity, the internet would have remained messy and chaotic for much longer. Their clarity of vision also shines through in their philosophy, ‘Ten things we know to be true’:

1. Focus on the user and all else will follow.
2. It’s best to do one thing really, really well.
3. Fast is better than slow.
4. Democracy on the web works.
5. You don’t need to be at your desk to need an answer.
6. You can make money without doing evil.
7. There’s always more information out there.
8. The need for information crosses all borders.
9. You can be serious without a suit.
10. Great just isn’t good enough.

Nike

Nike has a clear mission, vision, purpose, and core values. The company uses the guiding principles in its values statement to base its brand on equality, diversity, social and environmental impacts, and sport evolution:

“Our mission is what drives us to do everything possible to expand human potential. We do that by creating groundbreaking sport innovations, by making our products more sustainably, by building a creative and diverse global team and by making a positive impact in communities where we live and work.”

Nike’s core values are:

1. Community
2. Sustainability
3. Diversity
4. Social responsibility
   
   

Weave Core Values into Everything

So let’s say you’ve nailed down the right list of values. What now? If they’re going to really take hold in your organization, your core values need to be integrated into your company culture and every employee-related process—hiring methods, performance management systems, criteria for promotions and rewards, and even dismissal policies. 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 and embody the entire organization.