Values are Commonplace
It is rare now to walk into any company foyer and not see a company’s values and mission statement proudly adorning the wall. Company values are not a new concept, but more recently have become increasingly popular, with organisations using them as a recruitment tool or a driver for employee behaviour. By the same token however, there has been a rise in scepticism from investors and employees alike as to their actual value.
Well known institutions on both sides of the Atlantic have suffered collapse from mismanagement despite having supposed values, while many firms thrive without having any stated values.
How has this situation come about?
What do values do?
Values act as a signpost or compass for employees working within a company. They determine actions, responses and help to judge courses of action. If, for example, a company has a value of “offering outstanding customer service”, then employees know that they should respond to customer requests in a timely manner that satisfies the needs of the consumer. Values should provide a complete picture of what is absolutely paramount to the company, in order that they can be followed without conflict.
The more values are discussed at every level of a company, the more they become real
According to the University of Notre Dame, the 10 most often cited are:-
· Concern for customers
· Respect for all
· Respect for employees
· Ownership of actions
Values are also very closely linked to company culture. The culture will determine the look and feel of the values that are developed. As a result, it is vitally important to have a positive culture that all employees can buy into before developing a set of values.
Values as a ‘Nice to Have’
As they are easy to claim – any company can put together a list of four or five bullet points and claim them to be important to them – they have become increasingly prevalent. Where the issues arise, is that they are much harder to live and breathe. The more they are discussed at every level of a company, the more they become real. If they are left on a shelf to stagnate, the more cynicism around them becomes rife.
The challenge for businesses in 2016 is in directly relating values to business performance. The vast majority of those companies with values are not currently measuring any ROI on them. Our example company above that offers outstanding customer service may have metrics in place to measure the time it takes to reply to customers, NPS scores, customer satisfaction metrics and others in place to measure how satisfied their customers are. Much more difficult to do however, is to tie this back to the impact that values have had on the business.
More cynical businesses may also believe that by having a set of values in place they can ‘gloss over’ gaps in their culture, or if they know irregular practices are taking place within the business. This only further undermines values in the eyes of employees and stakeholders.
Time for Change
Those companies that are utilising values to their utmost are doing far more than simply displaying them on corporate materials or in their foyer.
Companies are using their values in their recruitment process to great effect. Values are an easy way to identify individuals who share the same values as the company, and as such will buy into the company ethos and culture. Individuals who fit the values and culture of a team are just as important as those who have the requisite technical skills for a position. Moreover, candidates will be far more likely to want to join a firm if their personal values match that of the employer.
Top performing organisations are also aware that values are closely aligned with company brand. As brand can be a far more relatable subject to top company executives than values, drawing this correlation can help to outline the importance that values have on an organisation. As most values are displayed prominently on a website and promotional materials, they can be used to help educate others about a company brand.
This is best exemplified by leadership thought leader Simon Sinek. He has argued that customers “do not buy what you do, but why you do it.” Sinek explains this in more detail in this video, in which he uses the example of Apple and others in his “golden circle”.
In the recent past, technology companies have been some of the most successful in living their values. Google for example, has innovation as one of its values. They are so committed to this that employees can spend up to 20% of their working time working on projects not directly related to their job function.
Forward thinking organisations also use their values as the basis for their business planning and setting objectives. As values can be used as a signpost, they can also be used strategically. According to the Strategy & Business website “those efforts [include] training staff in values, appraising executives and staff on their adherence to values, and hiring organisational experts to help address how values affect corporate performance.”
While the ROI is difficult to measure, most companies can now illustrate how values influence two key areas, relationships and reputation, as well as affecting employee retention, recruitment, and reputation.
Ultimately, it is not the values themselves that let companies down, but in their application. Where they are not applied correctly they will lead to employees disengaging. If they are driven as part of the culture, discussed and updated on a regular basis and engaged with by employees, they can be highly beneficial for organisations.
Furthermore, those companies that take the time to calculate what the real bottom line return on each of the values is can then begin to demonstrate the real life benefits of having them to employees, potential employees and investors.
The ultimate purpose of their existence should also not be confused. The purpose is not have a slick PR campaign that looks glossy but ultimately delivers no business benefit, but to own a set of unique values that drives organisational change, offers guidance on behaviours and ultimately leads to real business improvement.
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