047 How Consistent Core Values Grow Brand Equity and Trust
January usually brings in a wave of resignations. This is when people return to work from the holiday season after reflecting on how they'd like things to be different in the new year. For some, the reason to leave could be for better pay, and others for better work culture. Work culture is made of behaviors and communication within an organization, which is driven by core values.
In “Built to Last: Successful Habits of Visionary Companies”, the authors argued that visionary companies such as Disney, Merck, and Procter & Gamble succeed over time because of their core values that persist through generations. There are no right or wrong core values (none of the visionary companies identified had the same core values). Still, it was the stability of the values framework of the company that was consistently applied and acted on that led to their success.
What are Core Values
Having a fixed set of values does not mean that companies should not evolve and innovate. Businesses need to progress with marketplace changes and should do so following their core values. The first step is to identify and understand the company's core values, which will then define the behaviors and interactions with others within the teams.
The core values that form part of a company's culture still give team members the autonomy to make decisions as they see fit. Netflix believed so much in the importance of core values to their culture that they dedicated over 4,000 words on their job site to it. The message is clear: they want people who have a similar philosophy (which can mean having different opinions, personalities, and backgrounds) in their team—having people who own the same values facilitates the team to achieve their common goals.
Core values should be authentic and specific to the company. For Merck, values include patients first and innovation. These values led their scientific team to develop a cure for river blindness in the 1980s and then distribute it for free. A scientist at the time was experimenting with an existing Merck drug and found that doctors could use the drug to treat the debilitating disease that affected rural populations in Africa and Latin America. The decision to provide the drug at no cost was because the patients could not afford the treatment for the disease. Patient first (before profit) guided their research and actions.
The more specific the core values to the organization, the clearer it becomes for the team the range of behaviors and interactions that exemplify those ideals. Generic core values such as integrity, honesty, and collaboration don't tell people what attitudes to adopt or what conduct and practices to expect. Integrity and honesty are almost base-level standards—it goes without saying that people should behave ethically and within governing standards.
Core values are different from beliefs, which are a set of assumptions that could change over time. Think of core values like the north point on a compass, guiding actions and decisions while navigating shifting circumstances and context. Beliefs are based on assumptions thought to be valid until shown otherwise, depending on data and trends.
How to Find Core Values
Determining the company's core values should not be a top-down exercise done by the Human Resource or Legal teams. Because these values form the framework of interaction internally and externally, leaders should get feedback from their team. Tony Hsieh, the founder of Zappos, the online shoe retailer, crowdsourced the company's core values from his employees. He asked every employee what they thought was essential to and defined the company and refined the list to ten core values.
This might have made sense for Zappos--up to that point, each employee had been individually interviewed by the founder for culture fit. So it was likely that many of the employees had similar values already. Instead, to find out what core values the company should be based on, speak to valued team members across seniority, job functions, and geography. It may even make sense to interview key business partners and pick up what is consistent across the conversations about what is important to the people who work and interact with the business.
Rather than asking people to name the core value, ask them to describe situations or defining moments critical to the team's success. It might also help to ask what were the times when the company failed—this can inform the anti-core values list, the set of behaviors that should not be repeated. In aggregating the stories and examples, an emerging pattern will emerge of the behaviors that consistently enabled the team to perform well together. It is an opportunity to understand how external partners see you and the behaviors that deliver value to them.
How to Scale Core Values
Once the company has identified its core values, it is not enough to talk about them at a town hall or post on banners throughout the company. The values should be present and lived in daily communication—what behaviors are rewarded and incentivized. Stating that work-life balance is a core value and paying higher bonuses to those who work more hours sends a conflicting and confusing message. If employees are rewarded based on their work and other behaviors that display sound judgment in balancing priorities, this supports the core value.
There can't be over-communication on core values. Repetition of employee stories that exemplify the culture clarifies the type of behavior deemed important within the company. This helps employees to live the culture. In some cases, training may be needed, such as during the onboarding of new employees. A company that values learning through direct feedback may not be familiar to everyone (even if they have a growth mindset). So providing training on how to give feedback that is not overly kind or harsh but is candid and fair can help a person understand what needs to be done.
Knowing the core values will help managers make hiring and firing decisions. During the interview, ask candidates about examples of previous behavior to see if there is a fit. If learning through direct feedback is a core value, ask when the candidate had to deliver candid feedback or stimulate a difficult conversation. This can help assess whether the candidate would be a right fit.
When core values persist over time, there will be fewer instances of company communication inconsistency. Brands such as Ben & Jerry's that often speak out against racial injustice or Patagonia on climate change build credibility and fluency in their respective chosen issues. These brands live their values and build their reputation and trust with customers and the community. This will drive their brand's equity value and hence the business in the long run.