HR & Management
Why values are key to business success
7 min read
15 October 2018
Do leaders fully appreciate the importance of having clearly defined business values that are lived and breathed across the organisation? Sadly not!
Business values – the neglected necessity
Few companies put time and effort into defining, communicating and carrying-through their business values, which, in essence, are the guiding principles by which they operate. One company’s values could be honesty, transparency and integrity, whereas another company may value excellent customer service and innovation.
Whatever the values, they’re all too often neglected in favour of bottom-line results, especially when times are challenging and KPIs are seen as the priority.
Why values need to inform EVERYTHING
Values are the heartbeat of an organisation and must instruct everything it does and every decision it makes. And by taking a values-led approach, what the business stands for is being constantly reaffirmed.
Without this understanding of what’s guiding the business, it will lose direction and could even lose its way completely, impacting its reputation, relationships and bottom line.
If an organisation defines its values well enough, the leaders should be able to use them as a solid benchmark by which to make strategic decisions and to also empower others to make decisions of their own.
In leadership meetings, the agenda could be formatted according to company value, for example.
The company’s values also need to be lived across the organisation, from recruitment through to R&D.
During the recruitment process, interview questions and tasks must revolve around the company’s values so that people are hired who are culturally compatible rather than “brilliant jerks” (a term used by Netflix to describe individuals who have moments of excellence but who, on the whole, display unacceptable behaviours).
When people from across the company are recognised for a job well done, it needs to be made clear to the person receiving the recognition and those witnessing it how their behaviour supports one or more of the company’s values. And in marketing, for example, the identity and image of the company and its brands must be in keeping with the company’s core values.
If every business unit isn’t driving the organisation forward in line with its values, then there will be confusion, frustration and disengagement.
Values gone wrong – Please mind the gap!
When asked, most company leaders will delight in explaining their company values, and yet all too often, workers’ behaviour is at odds with these guiding principles.
There is a gap between rhetoric and reality and it is in this gap that issues arise.
If values haven’t been properly thought-through and instead are seen as some form of tick box exercise or employer branding initiative, then they are pointless and ineffectual. Values must be genuine and deep-rooted if they’re to ‘stick’.
Unfortunately, there are many companies that ‘get it wrong’ and sink deeper and deeper into the gap. One of the most notorious is Enron which put profit way ahead of ethics, making its values of communication, respect and integrity well-known for all the wrong reasons. The outcome speaks for itself!
More recently, the former construction giant, Carillion, collapsed with liabilities of up to £7 billion after operating in a maverick fashion with a lack of transparency and integrity. It is also alleged that there was a culture of fear. The reality and the rhetoric were clearly chasms apart as the company’s values included openness, ‘working as one’ and sustainable profitable growth!
Tips on getting values right
It can be challenging to operate a business that is constantly in tune with its values. Here are some tips on getting it right.
- Educate leaders on why living and breathing business values is so important. If it’s seen as a tick box exercise, it will fail.
- Collaborate on the business values to avoid it being a CEO or HR thing. A leadership team that comes up with ‘values’ without checking with the workforce about what’s important, will get little buy-in.
- Spend time clearly explaining and defining your values. This includes breaking-down your values into sets of behaviours so staff understand how they’re expected to behave. For instance, behaviours associated with ‘innovation’ could include generating new ideas, investigating and never ridiculing people’s ideas and permitting failure.
- Performance manage your people using values – Instead of purely focusing on KPIs, make sure managers recognise and reward staff who demonstrate the ‘right’ behaviours. This will prevent “brilliant jerks” and will help people to understand how important they are.
- Recognise and reward the right values when you see them – Don’t wait until the annual performance review as effective recognition needs to be frequent and timely.
- Ensure values are a natural part of your decision-making process and don’t be afraid to say “no” when something isn’t in line with your company’s values.
Organisations that disregard the importance of business values underestimate their impact. In an age when ‘how’ companies do business is just as important as bottom-line results, it’s time for business leaders to give ‘values and ethics’ the attention they deserve.
Robert Ordever is managing director of O.C. Tanner Europe.