Corporate Values Can Make or Break Your Company

Executives invest significant time pondering, debating, revising and adopting an awe inspiring set of corporate values, but when a company fails to measure up to its own professed corporate values, serious problems can result. Problems such as low employee morale, questions about management integrity, and client dissatisfaction can occur when corporate values seem empty, or worse yet, dishonest. To be meaningful and impactful, corporate values should be authentic, reflect the company's true identity and convey what sets the company apart from its competition. Corporate values should also represent a central point of understanding that employees can rally around.

However, identifying strong values and sticking to them is not for the faint of heart. It requires discipline, endurance, consistent oversight, and some serious toughness. Business guru Patrick M. Lencioni explains, "Indeed, an organization considering a values initiative must first come to terms with the fact that, when properly practiced, values inflict pain. … They leave executives open to heavy criticism for even minor violations. And they demand constant vigilance."

As a starting point, Lencioni suggests organizing corporate values into the following four categories to ensure the message and purpose is clear.

Core Values

As the name suggests, these are the core principles that guide all decision-making and corporate actions. Core values should never be compromised, and they often reflect the personal values of the company founders.

Aspirational Values

These are the values that the company needs for future success, but currently lacks or needs to improve. Aspirational values should always be tested against core values to confirm that they do not conflict with and/or dilute the core values.

Permission-to-Play Values

These values represent the minimum behavioral and social standards for any employee, and they tend not to vary much across companies. In contrast to core values, these values do not distinguish a company from its competitors.

Accidental Values

These values arise over time without being fostered by corporate executives and represent the personality or culture of the organization. Accidental values can be very positive, such as an atmosphere of teamwork and peer-to-peer training, but accidental values can also be negative, such as an atmosphere where information is withheld for competitive advantage. Corporate leadership should be vigilant to help employees distinguish between core values and accidental values, and work to eliminate accidental values that are harming the organization.

Lencioni further explains that the best values efforts are not based on a consensus building exercise run by the HR department after gathering the input of all employees. Instead, because values initiatives are "about imposing a set of fundamental, strategically sound beliefs on a group of people," these initiatives are best led by a small group of leaders who decide the corporate values based on the employee qualities that are present in the best performers and most desired throughout the organization.

Contrary to popular belief, and despite the noble-sounding values of many companies, authentic values can also be tough, edgy or even controversial. For example, a company may set itself apart from its competitors by adopting values that run counter to the traditional culture of an industry. A company in a highly free-spirited and creative industry may set itself apart by adopting the value of professionalism and establishing a structured and efficient corporate culture. Likewise, a company in a highly traditional, structured, and professional industry may set itself apart by adopting the value of innovation and establishing a more creative and adaptive corporate culture.

The key to a successful values initiative is aggressive authenticity to the content of your values. This plays out in every aspect of your business, from decisions about hiring and rewarding employees, to decisions about the types of clients that will receive your services, to decisions about expanding into a new field of endeavor.

To make your core values really take hold in an organization, the core values must be integrated into all employee management processes, including hiring, performance reviews, rewards and promotions, and criteria for termination. Consistent communication is required to ensure that employees understand the core values form the basis for every decision the company makes.

Source: Patrick M. Lencioni, Make Your Values Mean Something, Harvard Business Review, July 2002.


The Culture Counts blog is a discussion of law firm culture and legal innovation, including topics such as effective leadership, employee engagement, workplace culture, ideal work environment, company core values, and workplace productivity.  

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