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In our own lives and everyday dealings with other people, it is important to recognize the role that personal values play in decision making. The things that matter most to us as individuals, the non-negotiable characteristics that best describe us, are what we use to make decisions in both our personal and professional lives. We make decisions and engage in projects that promote these values or are consistent with them. Acknowledging this makes us better at making decisions for ourselves, and more empathetic, inclusive and tolerant in the way that we treat others.

In business, it is equally important to recognize that organizations function according to a set of values. With this in mind, one of the most important things an organization can do is develop a statement of core values. This means thinking about and articulating what the company stands for as an aggregate of individuals that is more than the sum of its parts. This is important for two reasons.

  1. It provides direction and purpose to the people at the top. If you have a clearly defined set of organizational values, the leaders in the organization can use this as a guideline for setting new organizational goals and objectives.
  2. It maximizes buy-in. A statement of values helps ensure that key executives and employees within the organization are on board for. They will be more likely to support projects that promote these values. If you don’t have your values clearly clarified, then you might end up with people working for you who’s own values are not aligned with those of the company and thus not willing to work hard for you.

So what goes into creating a statement of values? What exactly is it? First, its important to recognize that a statement of values is not the same as a mission statement. A mission statement articulates a company’s vision – a singular goal or purpose that defines what an organization does or hopes to achieve. Nike’s mission statement, for example, is “To bring inspiration and innovation to every athlete in the world.” A statement of values lists the principles or commitments that guide how an organization goes about achieving their vision.

In order to get a better idea of what a statement of values should look like, lets take a look at one from a successful company. Google, one of the most successful companies in the last twenty years, attributes their own success to sticking to a core set of values. They articulate these in a readily available document called “Ten Things We Know to be True.” The list includes guiding principles like “Focus on the user and all else will follow,” and values that express moral or ethical truths to which the company is committed like “Democracy on the web works” or “You can make money without doing evil.” Clearly stating these values and making them publicly available helps companies like Google succeed as an organization in three ways:

  1. It aids high level decision making. Anytime an executive has to make a decision regarding the future of the company, a statement of values serves as a roadmap for doing so. A prospective project that clearly runs counter to these can be easily identified. It can then either be altered to be brought into line with them or abandoned. This provides consistency across disparate projects within the company and helps unify an organization’s operations.
  2. It improves hiring practices. A misalignment of values between company and employee can lead to internal strife and dysfunction. Employees who feel as though the company promotes values they oppose will be unlikely to work hard for that company. They may even actively resist helping the company. Having a clearly articulated set of core organizational values helps you avoid this problem from the outset. A prospective employee might appear perfectly competent and qualified for a position, but may not be a good fit if their values do not sufficiently overlap with those of the organization. Using assessment tools in the hiring practice, in conjunction with a statement of values can not only help you avoid this, but it can also be helpful in deciding between two equally qualified job candidates. A statement of values can help you identify the not only the best worker, but also the worker who best fits with your organization.
  3. It gives you an opportunity to speak directly to customers. Customers want more than just a product. They want to know that the company with whom they do business is one they can feel good about. If you have a clearly articulated statement of values, you should make this publicly available. This gives you an opportunity to speak directly to your customers and let them know, when they buy from you, they are supporting an organization whose values they share.

Having a clearly articulated statement of values is invaluable to an organization. It unifies high level decision making, makes a company work more collectively toward a shared purpose or goal, and provides an opportunity to speak directly to your customers at a deeper level. On the other hand not having a clearly defined statement of values can thus lead to dysfunction and strife within your organization. Without a clear vision for what the organization stands for, it can be difficult for those that guide the organization to lead effectively. It also makes it harder to get things done once a project has been defined. Without a clearly articulated set of values, you may invite people into the organization whose values do not sufficiently align with those of the organization as a whole. This could lead to unproductive internal resistance to the way you do business.

Whenever I’m advising or coaching an executive, we spend a lot of time going over core organizational values. We make sure they are clearly defined, well communicated and publicly available. If you want your company to succeed, I highly recommend doing the same.