A Deep Dive Into Company Values
Wednesday, February 8, 2023 - Joe Kiedinger
It’s widely accepted that adhering to a set of strong values can help a company differentiate itself from competitors and create advantages by rallying employees. It’s also true that companies that execute on the basis of such values on a day-to-day basis are much better equipped to reap the benefits of those values than companies that do not. Simply put, upholding values is an important part of doing business in the modern world – Fortune 100 companies tend to agree, with 80% of them displaying their values publicly (Lencioni).
Having an understanding of the different types of values that exist and their utility can greatly help leaders to construct their ideal set of values. The term “core values” is often used as a blanket term to encompass a company’s entire set of values. Patrick Lencioni, renowned author and founder of the Table Group which specializes in executive team development, takes a different approach. He separates values into four sets of distinct categories – core values, aspirational values, permission-to-play values, and accidental values.
Core values, as defined by Collins and Porras, are inherent and sacrosanct – they are principles that guide everything a company does and cannot be compromised under any circumstances. Aspirational values are ones that a company lacks, but which they will need to embrace to succeed going into the future. Permission-to-play values represent the minimum behavioral and social requirements applied to every employee. These may include traits like integrity and honesty. Accidental values are those that arise within a company, often the result of employee socialization, but were not intended by leadership. These can be positive or negative depending on the value in question and how it is implemented (Lencioni).
Authenticity is Key
Values initiatives must be treated with care and diligence. They cannot be expressed in one-time launches made to drive attention and win support before forgetting them and moving on to the next big thing. Instead, they must be judged by the authenticity and applicability of their content. Inauthentic and hollow expressions of values do not advance a company’s position and instead can damage its standing with both employees and external observers, including customers (Lencioni).
Take, for example, Enron, who stated that their values were communication, respect, integrity, excellence. They sound strong, but they clearly were hollow and meaningless, as Enron was exposed for legal, ethical, and financial violations in one of the largest scandals in American business history. Or, for another example, a CEO of a financial services company who introduced a fresh, seemingly strong set of values (teamwork, quality, and innovation) through a video presentation, but received only a negative response by an audience of peers who could sense a level of insincerity (Lencioni).
With this in mind, we understand that whether or not the values are perceived as authentic, and whether or not the values are followed at all levels on a day-to-day basis will make or break a values initiative. For Lencioni, uniqueness and differentiation are at the core of authenticity, even at the risk of being a little bit controversial. Lencioni identifies Siebel Systems as an example of his ideal, who counter the prevailing informal culture of Silicon Valley by listing professionalism as one of its top values, expecting its employees to conduct themselves much more conventionally and formally than competitors in order to succeed. This helps strongly distinguish Siebel Systems from other companies in Silicon Valley, making stick out rather than “fade into the crowd” (Lencioni).
Once a nuanced and authentic set of values have been established, it’s very important that they are implemented into every level of the company and into as many processes as possible so as to allow a culture to take shape. A strong values-based culture can and will, for example, help executive teams make important strategic decisions, help managers create and maintain social and functional unity within their teams, and drastically improve both hiring/onboarding processes and subsequent retention (Lencioni). With this in mind, its easy to see how a properly established set of values can enable a company to produce outputs greater than the sum of its parts, having enabled employees with a clear and prudent sense of direction.
Lencioni, Patrick M. (2002). “To Succeed as a First-Time Leader, Relax” [Article]. July 2002. Harvard Business Review. https://hbr.org/2002/07/make-your-values-mean-something [Accessed January 11, 2022]