Core values form the foundation of any business. Leading organizations like Google, Microsoft, Meta, Amazon, Apple, etc. attach paramount importance to the core values as it shapes their interaction with customers and the outside world. Core values are important irrespective of the size and scale of an organization. Had these organizations focused only on sales, marketing, and revenue growth, they might not have moved up the ladder to become reputed leaders in the industry.
Beyond helping firms build a reputation in the outside world, core company values shape the firm’s internal operations and help build a salubrious working environment.
In this blog, we highlight the need, the ideology behind it, and the steps involved in setting up the core values of a company. We have also presented some examples of company values to give you an idea of how you can design one for your firm.
What Are the Core Values of a Company?
A set of principles called core values guide the stakeholders of an organization toward achieving the vision and goals of an organization. Core values help shape the organization’s culture and ensure the well-being of the employees, customers, and the communities they are part of.
Pro-tip
Irrespective of the size and scale of the organization, core values are important to align different teams and departments toward the company’s goals and vision. Today, market leadership is not just about revenues and profits but also about company values and culture. Strong company values are more important to drive a sense of attachment and belonging among the stakeholders, particularly in this era where remote and hybrid work has gained prominence.
The core values of a company are constant and form a solid foundation for business operations. Businesses of today operate in a constantly evolving, dynamic landscape. Globalization and digitalization have shrunk boundaries, and businesses of today venture beyond geographical borders.
Given the diversity, dynamism, and volatility of the business environment, organizations need to have common ground and strong company values. Company values help align the employees with the organization’s goal and purpose no matter what, where, and how they work. Core company values guide businesses in making crucial decisions about all operations of the firm, including HR, sales, marketing, finance, etc.
Beyond internal operations, company values guide the firm’s and employer’s behavior toward customers and determine an organization’s success to a large extent. Today’s marketplaces are extremely competitive, and core values help businesses build a reputation and distinguish themselves from the rest of the players in the industry.
David Cummings, Co-Founder of Pardot, once said, “Company culture is the only sustainable competitive advantage that is completely within the control of the entrepreneur.” This reveals the significance of core values within and outside the organization.
What Is the Need for Core Values?
Organizations spearhead their focus toward achieving their mission, vision, and goals. Core values help businesses ensure that the stakeholders stay aligned with the guiding principles in their pursuit. Following are some of the reasons why an organization must have core values.
1. Define the Company Culture.
Core company values play a critical role in shaping the company culture. They define what the business stands for and help employees understand what is expected of them. Understanding the company values help employees tune their personal values accordingly.
2. Committed Talent Pool
When organizations communicate their company values, they are more likely to attract employees who share them. Employees who align with the organization’s values will likely be more engaged and committed in their pursuit. They also strive to promote team member growth, enhancing the business’s overall productivity. The importance of company culture is evident from the fact that more than 46% of job seekers quote culture as an important criterion while choosing an organization.
3. Decision-making
Businesses must make swift and dynamic decisions to thrive in the competitive landscape. Today decentralized decision-making has become the norm, where organizations empower employees and managers to make strategic and operational decisions.
Given this, the core values of a company serve as guiding principles for different teams and departments to make decisions that best serve all stakeholders, including customers, employees, investors, etc. For example, if you have premium quality as one of your corporate values, it is easy to eliminate those products that fall beyond satisfactory limits.
4. Competitive Advantage
When companies base their product and service offerings on core values, they get to differentiate themselves from other players in the industry offering the same products/ services.
Importance of Company Values
Core values are vital for any organization as it sets the standard for all their processes, functions, and operations. The following section describes the importance of core values.
1. Offers a Sense of Direction
Organizations base their processes and functionalities on their core values. They help employees understand what the organization stands for and provide a clear direction to the employees and other stakeholders.
2. Drives Business Growth
After much thought and effort, the founders and leaders determine an organization’s core values. Growth and development become effortless when every business activity is aligned with corporate values.
3. Employee Involvement
Company culture plays a key role in keeping employees motivated at work. When employees are committed to the core values, their involvement in the job and overall satisfaction improve. Doing so eventually enhances the overall productivity of the business.
The core values of a company help align all the stakeholders in an organization towards a common vision and establish a shared culture. This way, collaboration and teamwork become easy and more productive.
5. Reduces Employee Attrition
One of the notable importance of core values is that they help reduce employee attrition rates. The ultimate purpose of core values is to promote a healthy environment and a unified ethos for all stakeholders, including employees. Employees who feel heard and rewarded are likelier to stay on for longer. Core values help create an employee-friendly work environment and reduce employee attrition rates.
6. Tool for Recruitment
Job seekers of today explore the identity and values of an organization. The core values of a company serve as a recruitment tool as they educate job seekers about what the company stands for and the kind of culture the company has created.
7. Promotes Customer Loyalty
In this world of cut-throat competition, having a set of customer-centric core values is undoubtedly a competitive advantage. Incorporating essential values such as customer commitment, integrity, and quality will draw their attention and hook them to your offerings for a long.
8. Enhances the Organization’s Reputation
Broadcasting a company’s core values helps grab more attention to your business and enhances your brand’s overall identity. You should showcase the core values in all your marketing and advertising campaigns. Communicating company core values adds to your brand value, differentiates your offerings, and enhances your reputation in the competitive landscape.
What Steps Are Involved in Setting Up an Organization’s Core Values?
Most leading companies did not have core values on the very first day. They were idealized and defined over a period of time based on what best served the stakeholders in the organization. Founders and leaders play a key role in building and curating the core values. It requires thoughtful identification of the values and beliefs upon which they have built the company.
Though there is no rulebook or standard for setting up the core values of an organization, the following steps may help you initiate the process and streamline your thoughts toward building a strong team culture.
1. Assembling a Team
The first step in building the core values of an organization is to assemble a team with a mix of employees, managers, C-grade executives, and directors. While selecting the team to build the business core values, ensure the following.
- The team members should know the values of the business
- They understand the culture of your organization
- The team should know your employees well
- The team should understand the customer’s expectations
- The team knows the in and out of your value offerings
- They have all the skills and commitment an ‘ideal employee’ or ‘stakeholder’ has.
Choose people who have a deeper understanding of the above and then narrow down the list to select the right set of people who you think can work as a team to build your organization’s core values. The team should be unwaveringly committed to drafting the core values and upholding them.
The idea behind having a team work on core values is that they add a broad perspective to the process. When you do so, all the stakeholders are given due importance and representation in the process.
As core values are expected to serve as guiding principles for all the stakeholders in the organization, you must consult people from different hierarchical positions and consider their input. Doing so helps build an inclusive culture and produce more realistic core values.
2. Brainstorming
The brainstorming step intends to source individual ideas and select the ones that best align with the organization’s vision, objectives, and purpose. In this step, the team members selected for the task brainstorm individually and prepare what they consider the core values of an organization. They should base their search and preparation on the company’s vision and mission.
You must remember that this step is very important, and though it takes quite some time, the process should not be rushed. It requires a lot of deliberation and moving back and forth.
The leadership and management should also seek suggestions for core values, as their vision forms the cornerstone of the organization’s functioning. All the stakeholders should thoroughly research and identify business core values that best align with the organization’s trajectory in the coming years.
3. Condensing and Finalizing
The next step is to condense the values prepared by each of the team members and arrive at a final list. Having too many core values dilutes the process, and communicating them to stakeholders becomes tedious.
Most companies have anywhere between 5 and 10 core values. So, it is important that the team collects data and business core values from individual members and sorts those that align with the core vision and purpose of the organization.
In this step, most organizations do affinity mapping to merge similar values, keep the best ones, delete the duplicates, and leave off the not-so-important ones. The company values received from all the team members must be grouped into 5 or 6 categories to figure out useful data. Select only those values that serve the purpose and ignore the rest. More importantly, do not have fillers or add values just to have more. It is easy to remember and exercise when the organizations have a limited yet impactful set of core values.
Once the core values are set and finalized, they must be discussed with other employees and stakeholders to ensure that everybody aligns with the selected values.
4. Unveiling
Once the team finalizes the company’s core values, the next step is to roll them out to the entire organization. Briefing the employees and the team about how the core values of a company were developed and why they were chosen helps strengthen employee commitment and loyalty. It also enhances the value of the brand.
Employees must also understand what company values mean to them and how it works for them individually. This way, they can avoid misunderstandings and achieve the purpose.
Some organizations plan a roll-out event to take the employees off-site and spend a day or an evening disconnected from their day-day work. Doing so helps employees become familiar with the core values and unique elements of the organization’s culture.
5. Delineating
Once the core values are finalized and rolled out, they should become the standard for all operations within and outside the organization. They should become a key part of the sales, marketing, and advertisement processes to reach a wider audience and provoke more people to become customers, clients, or partners.
Internally, core values should be emphasized, from reviews and appraisals to recruitment, hiring, orientation, etc. Those employees who commit to the core values of a company and standards must be appreciated and rewarded. Doing so would reinforce a sense of commitment amongst other employees to follow the core values at work and function on common ground.
Ideology Behind Setting Up Core Values In An Organization
1. Core Values Represent the Vision of an Organization.
Core values are determined by the founders, directors, and key team members who know the in and out of the organization’s functioning. When employees and other stakeholders base their activities on core values, aligning them toward the organization’s true vision and purpose becomes easy.
2. Core Values Help Shape the Organization’s Culture.
A company’s core values define its culture and functioning. When organizations broadcast their culture, only those employees that align with the culture are interested in becoming a part of the workforce. This makes it easy for organizations to attract the best talents and build a shared culture.
3. Core Values Strengthen Employee Engagement.
With core values, organizations get access to the best pool of talent who remain committed to upholding its vision and values. Core values are often used as the standards for reviews and assessments. Doing so gives the employees a sense of security, who feel heard and recognized. Organizations also reward those who go by the core values. This, in turn, deepens their engagement and motivates other employees to work in alignment with the core values, vision, and purpose.
4. Core Values Help Organizations Uphold Integrity and Ethical Behavior.
When companies base their operations on core values emphasizing integrity and ethical behavior, the business is more likely to sustain itself longer.
5. Core Values Help Build an Employee-friendly Work Environment.
As organizations emphasize mutual respect as a key value, it helps build an employee-friendly ethos and garner the trust of the workforce. Employees who feel respected and heard will likely stay longer, reducing the attrition rate.
6. Core Values Spark Creativity and Enthusiasm in the Workspace.
Today’s business landscape is extremely disruptive that something new today becomes outdated tomorrow. Organizations must promote innovation and creativity in the workspace to survive in the rapidly evolving business environment.
Well-thought-out core values promote dynamism in the workspace and offer a conducive environment for employees to unleash their true potential. This ensures that businesses sustain and thrive in the competitive landscape.
7. Core Values Help Create a Unique Identity in the Business Environment
In the highly competitive business environment, organizations are working out ways to stand ahead of others in the industry. Having a unique set of core values and showcasing them in the campaigns instill a sense of curiosity in the minds of the public. Company values help carve a unique identity for your business.
Also read: What Is Global Human Resource Management? 8 Effective Strategies
Company Value Examples
Whether small, medium, or big, all organizations must have a set of core values to build a conducive work environment and create a unique brand identity for themselves.
Following are some examples of company values, and knowing the core values of the reputed firms might help you in the process.
Google has ten company values, and they are listed below.
- Focus on the user, and everything else follows
- It is always best to do one thing well
- Fast is better than slow
- Democracy on the Web works
- You needn’t be at your desk to demand an answer
- There’s always more information out there
- The need for information crosses all borders
- You can be serious without a suit
- It isn’t good enough if you are just great
- You can make money without doing evil
Spotify
Spotify has five core values that include
- Innovative – We’re original and creative in our thinking.
- Collaborative – We’re stronger together.
- Sincere- The best relationships are based on mutual trust and respect.
- Passionate – We’re proud of what we’ve achieved and passionate about where we’re going.
- Playful – We say yes to the fun.
Airbnb
The company values of Airbnb are
- Champion the Mission
- Be a Host
- Embrace the Adventure
- Be a Cereal Entrepreneur
Bain & Company
Bain & Company stands by the following core values.
- Passion and commitment to the highest level of professionalism
- Honesty and openness
- Practical
- One Team
Conclusion
Building core values strengthens an organization’s identity and differentiates it from its competitors. Well-thought-out core values help organizations build a strong foundation and align the stakeholders toward achieving their vision, mission, and goals. Merely creating and displaying the core values on the website isn’t sufficient.
Successful companies have based their operations on core values and have built a positive, meaningful work culture. Beyond that, they also guide the employees to function within ideological standards and ethical frameworks. HR software tools help keep track of employee adherence to core values.
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Paras Kela is a highly skilled SaaS content writer with over 7 years of experience in the IT field. His expertise lies in simplifying complex technical concepts for easy comprehension. With a portfolio of over 100 high-quality blogs covering various SaaS topics, Paras’s writing style is engaging, informative, and SEO-friendly, ensuring maximum effectiveness. He continuously updates his skills and knowledge to stay current with industry trends, making his writing relevant and reliable.
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