How to use core values to build a great company
So many books have been written about how to win in business. The simplest way, in my experience, is to use core values fully in an organisation. It’s also one of the hardest things to get right.
The key is ‘fully’: develop them organically, then use them in recruiting, reviews, terminations, and measuring performance week in week out.
UNCOVERING & DISTILLING CORE VALUES GIVES THEM POWER
The power of core values is defined by how they are developed in the first place. Instead of top-down, core values gain power when they are distilled by employees from everyday best practice. There is an art to how to distill them. Start with structured discussion groups, involving all levels. Guidance is essential; it cannot be about voting for favourites, but rather on distilling the key aspects of how a company does business most successfully, and key traits of the highest performers. From discussion groups, very quickly move to synthesis groups, then into a final distilled list. This can all be done over a weekend offsite; in fact, it must be done quickly. Once distilled and simplified, the resulting core values take on the unique power of simple ideas which have bubbled up, vs being imposed.
In my experience, the maximum number of core values should be six. More and it risks being a laundry list, too few and it cant capture all dimensions of success. Each core value should be expressed as a single word, maximum two (distill = short). At Magister we have six core values, each one word that describes a key employee attribute: 1. Creative 2. Assertive 3. Collaborative 4. Driven 5. Intelligent 6. Respectful. There is also meaning to the sequence, we wanted creative first as the biggest differentiator, respectful last as the foundation of how we interact.
There are in fact two different types of values in this list. First, foundation values, the characteristics we expect everyone to have. Intelligent and Collaborative for example. Then there are ‘leverage values’ which really differentiate: Creative, Assertive and Driven fall into this category. Of all our values, Creative is probably the single biggest differentiator across everyone who has worked at the firm.
For each value it is equally important to identify its exact meaning. For example Assertive undefined can mean different things, aggressive, loud, or always taking the lead. However the way we define Assertive is absolutely NOT aggressive. We define it as asserting clearly your point of view and winning people over. We carefully make it about ‘output’ (what you achieve by being assertive) rather than approach (he who shouts loudest). By defining clearly what each value ‘means,’ employees get a roadmap of ‘how things are done around here’ as well as ‘the key ingredients of success.’ So core values are both a guide to how to do things and the goals to be achieved.
I find the process of uncovering and refining core values to be one of the healthiest any growth company can go through.
USE CORE VALUES EVERYWHERE, OR DON’T BOTHER
The last aspect is how core values are used. The short answer is: everywhere, all the time, in every company process. Here is how I have used core values in different processes to create a coherent team culture:
Recruiting – have a 1 page form with each core value (and 2–3 aspects of each core value underneath) for interviewers to grade potential hires.
Reviews – use the same 1 page form as you did for recruiting for reviews, it forces everyone in the organisation suddenly to align on the core values as the company’s operating backbone
Terminations – I always use core values as the basis for termination discussions. In some cases this is hard to do, eg if the issue is shortfall in intelligence, that’s tough to talk about openly. But 90%+ of the time I can extract one or two values where the employee has not performed and by explaining it in that language we have a fundamental, often far more useful discussion about why it didn’t work out for them. It also anchors the termination in the objective.
Creating a mission statement – eyes roll when ‘mission statement’ is written but this misses the point entirely. By uncovering and distilling core values, an organisation can craft a mission statement that aligns to these values, reinforces them, and gains real credibility as a result. In this way employees actually help create the mission statement, transforming the statement into a living management tool, not a PR exercise.
AN AUTHENTIC ORGANISATION, BUILT ON CORE VALUES
Today no one cares what a company broadcasts. Customers look at reviews, prospective employees at Glassdoor, and suppliers at credit scores. Authenticity has replaced messaging.
By adopting uncovered and distilled core values, an organisation becomes overnight authentic. Employees who post do so aligned to ‘what we stand for’ and ‘how we do things around here’; management actions are anchored in the core values that they know drive success. Also by living its core values a company becomes aligned inside and out; how it treats employees and customers is judged the same way. We publish our core values on our site and ask our clients to judge us against them. When we do client satisfaction audits we do them against the core values. As a result, there is nowhere to hide. True authenticity.
Core values are hard to distill and proliferate, but done right I believe they can be the single most powerful weapon in a company’s arsenal.