What Are Company Values and How to Define Them?
Posted on June 12, 2018 by Ethan Chen
For several years, researchers and journalists have been reporting that corporate values are extremely important to millennials — both in companies they work for and companies they buy from. Since this generation is expected to make up nearly half of the working population by 2020, companies who don’t learn to understand millennials are only hurting themselves.
Let’s start at the beginning: What are company values?
What Are Company Values?
Company values, also known as corporate values or core values, are the fundamental beliefs upon which your business and its behavior are based. They are the guiding principles that your business uses to manage its internal affairs as well as its relationship with customers. Once set, your core values need to be firm and unwavering — a mandate rather than a suggestion. They should affect every aspect your business, from employee benefit packages and workplace culture to marketing strategies and customers service.
Keep in mind that company values should be more than stated values; they must be practiced values. If your company doesn’t follow through on the values it claims to hold, you can’t expect your hypocrisy to go unnoticed — or unanswered — by consumers. Employees, likewise, will notice if your company isn’t living up to its values statement, which can damage morale.
Why Are Company Values Important?
Numbering 83.1 million, millennials surpassed baby boomers in the 2014 census and represent one-quarter of the U.S. population. Simply put, this generation is too large to ignore. If corporate values matter to millennials — and they do — then they should matter to you, too. As employees and customers, millennials favor companies whose values align with their own personal values. That makes corporate values an important part of both driving sales and attracting top talent.
When it comes to recruiting employees, you can even put a dollar amount on how much company values are worth. According to a study by Fidelity, millennials would be willing to take, on average, a $7,600 pay cut for a healthier work-life balance, a better company culture, career development, or a more meaningful job — factors that would improve their overall quality of life.
A strong set of company values also gives your company direction and helps it build a reputation. They set the tone for how your business interacts with customers, markets its products, and makes important decisions. If you take them seriously, your core values will help you form a solid brand identity and a cohesive business plan.
How Do You Define Company Values?
You can incorporate your corporate values in your mission statement or write a separate statement of core values. Either way, the process should start with a brainstorming session. Invite a handful of people who understand and embody the traits you want your company to be known for. These could include the founder, CEO, and other company officers, but don’t forget to include some key employees too, such as your top salesman, your most respected managers, or your best designer. Ask each participant to list what they think the company’s values are or should be.
You can jumpstart and guide the process with questions like:
- What core values will resonate with our customers?
- What principles should guide our choices?
- What do we want our company to be known for?
- How will our values distinguish us from competitors?
- What qualities do we value in employees?
Values Employees should Strive to Emulate
- Values are purposeful. Your values shouldn’t be a list of generic ideals. They should be specific to your company, and they should align with your company’s goals. For instance, while a commitment to justice might make little sense for a tech company, a commitment to privacy would serve an important purpose.
- Values are choices. Rather than seeing your values as beliefs, treat them like choices. After all, most companies will say they believe that customer service is important. What differentiates your company from others will be the choices you make in the name of customer service. That could mean committing to a 24-hour response time for email inquiries and investing in the staff and tools to make that possible.
- Values will cost you. Like any choice, values come with an inherent cost. Make sure you are ready to uphold your company’s core values even when it would be easier or less expensive to ignore them. If your company claims a commitment to sustainability, you should use eco-friendly materials even if that decision cuts into your profits. Values that cost you nothing aren’t worth having.
- Values require action. Beliefs without action are just empty words. For instance, if you say your company values innovation, you can’t stifle employees with a “this is how it’s always been done” mentality. Instead, you should be actively encouraging and considering new ideas.
- Values are timeless. Although your company’s practices and strategies may change over time, your core values should be constant. Choose values you can stand by regardless of economic conditions, external incentives, competitive advantage, or corporate trends.
Keep in mind that company values aren’t merely an internal matter, limited to an obligatory section in the employee handbook that hardly anyone reads or remembers. Rather, companies are expected to share their values publicly. Let consumers know what you stand for and how you run your company.
Make sure your employees are familiar with your company values. Set values employees can put into practice, and give them the tools and incentives to do so. The Crew app can help you communicate your values to employees, offer guidance and reminders, and recognize team members who are following through.
Company Values Examples
Need some inspiration? Study examples from other successful companies, such as the following:
- American Express: Customer commitment, quality, integrity, teamwork, respect for people, good citizenship, a will to win, personal accountability.
- Facebook: Focus on impact, move fast, be bold, be open, build social value
- H&M: We believe in people, we are one team, straightforward and open-minded, keep it simple, entrepreneurial spirit, constant improvement, cost-consciousness
- Virgin Airlines: We think customer, we lead the way, we do the right thing, we are determined to deliver, together we make a difference.
Now that you know what company values are and the basics of how to define them, it’s time to create your own. What will your company be known for?