In today’s fast-paced business world, the importance of core values in the workplace can’t be overstated. Establishing a clear set of values for your organization is more critical than ever — I’ve even written before about why core values matter for my own company. Whether you’ve got two employees or 2,000, a defined purpose helps unite your employees, attract customers and develop expectations for both. Additionally, recent research indicates that a clear purpose can improve a company’s financial performance.
One study found that organizations embracing a multi-stakeholder approach performed better than the S&P 500 by a factor of eight over a decade. Similarly, George Serafeim and his co-authors found that firms whose middle-manager ranks emphasized purpose “have systematically higher accounting and stock market performance.” So, no matter your size or industry, there’s a lot of evidence supporting the importance of core values in the workplace for any business.
What Are Core Values?
Core values are the fundamental beliefs that guide an organization’s actions and decisions. These beliefs drive a business and its employees and inform how both operate. These business core values help direct every component of an organization toward a common set of goals and inform how each component interacts with the others — and with your customers.
Essentially, these values function as your company’s reason for existing; they help define your organization’s purpose. Here are some common examples of core values in the workplace.
The Importance of Core Values in the Workplace
One benefit of implementing core values in the workplace is that they can help to build trust and credibility with customers, partners, employees and stakeholders. A business that consistently acts according to a set of publicly known values can demonstrate a high level of integrity and reliability, subsequently inspiring confidence and loyalty. In contrast, a company with weak or undefined values may struggle to build trust and may be viewed as unreliable or untrustworthy by customers or stakeholders.
Defined core values also create a positive and engaging work environment. A global study of executives found over 80% believe a strong sense of purpose drives employee satisfaction. Moreover, Harvard Business Review (HBR) research found more than 9 out of 10 employees are willing to take a pay cut for more meaningful work.
When employees understand and align with the organization’s core values, they’re more likely to feel a purpose at work. Demonstrating values-based leadership is vital to your staff feeling connected to their work and can help increase engagement and productivity and decrease turnover. Other research from HBR showed companies with a purpose do better in the market by 5%–7%, grow faster and have greater profitability.
How To Develop Core Values for a Company
There are tangible benefits to having core values in the workplace. Still, knowing you want to establish these values and implementing them are different. Here’s how you can develop core values for your organization.
1. Seek Inspiration and Input from Others
The first step when developing your company’s core values is to seek inspiration from other organizations you admire. Even if their values don’t align with your own, they may get you thinking about your core values differently.
Use your founders or executive team to help you create and enact these values in leadership and operations scenarios. These team members may already have an idea or vision for your company’s values. Plus, as you work together to solve problems and/or build your business, you may develop the values you desire.
2. Ask for Feedback
Creating core values should be a collaborative process. In addition to the company’s founders or executive team, solicit feedback from the rest of your organization. Through surveys or meetings, you can ask your entire staff what they think about the values you’ve developed. As you seek this feedback, ensure you’re asking tough questions and capturing answers in as much detail as possible.
Additionally, soliciting as much feedback as possible will help you better understand your current culture and what your employees like and dislike most about it. Once you’ve gathered this data, compare any insights and look for patterns. Are there any clear ideas you can add to or update with your values? This process won’t reflect every individual’s feelings, but it will be more representative than if you only ask for input from your executive team.
3. Align Values and Brand
As you develop your core values, make sure they reflect your company’s brand and what makes you unique. These values should exemplify what separates you from your competitors and demonstrate how they affect everything your business does. Similarly, your core values need to embody your organization’s culture and the spirit of your mission.
4. Act and Implement
Once you’ve thought through your core values, sought feedback and shared your ideas with your employees, put your values in writing. Describe, in detail, what these values mean for your business. Anyone reading a description of your core values should understand how they fit into your company’s culture and how employees can use them to guide their work. Once the values are in writing, you must then implement them.
5. Review and Evolve
Although your core values should be foundational to your organization, they may need to evolve, just as the world around you is evolving. Businesses expand and retract — they shift processes and priorities to reflect the world around them. So, you must periodically evaluate your core values to ensure they match your organization’s culture and mission.
If you do find your organizational core values in need of updating, add or remove values to maintain their alignment with your present culture. With any changes, make sure you’re soliciting another round of feedback. This feedback is as vital as it is when first developing your values, as they should consistently match the core of your business.
Implementing Core Values in the Workplace
Once you’ve developed your business core values, you must implement them in the workplace. Without the consistent application of these values, they will be nothing more than a blurb on your website or a poster on the wall. You should derive your core values with input from the entire organization. But typically, these values are best implemented from the top down.
Any business leader must communicate and model their company’s values. Such communication should include setting expectations for behavior and decision-making and consistently reinforcing these values through your words and actions. Additionally, if you used the above process to develop your core values, you should have heavily involved your employees. This involvement can help build buy-in and ownership of your company’s core values.
Integrating these values with all aspects of your business, including policies, practices and systems, is essential. This integration will help align your company culture and core values, ensuring your business operations are consistent with your values and any deviations are addressed and corrected quickly.
For example, one of Spotify’s values is collaboration, which it demonstrates through partnerships with musicians from all over the world across various genres of music. These collaborations reinforce Spotify’s commitment to this value to employees, partners and stakeholders.
Likewise, setting organizational goals that align with your core values is crucial. Such an alignment can help ensure your business works toward a common purpose consistent with your established values. Plus, involving your staff in the goal-setting process will assist employees in buying into and implementing these values consistently throughout your organization.
Core Values in Business
The importance of core values in the workplace is impossible to overstate. They’re a critical element of almost any successful organization and are foundational for a company’s culture. Core values help build trust and credibility among customers, partners and stakeholders.
By clearly communicating and modeling core values, aligning your company’s culture with the values, and setting goals that align with these values, business leaders can ensure their organization is constantly working toward a common purpose and acting in a way that is always consistent with its values. Plus, your company can accomplish greater productivity and profitability by establishing core values and a definite purpose.
Are you still curious about the impact a set of well-developed — and adhered-to — core values can have on your organization? Check out my book, Lead, Don’t Manage, or book me to speak at your next event!