It’s been 20 years since Patrick Lencioni lit a fire under the C-Suite with his article Make Your Values Mean Something. In my favorite HBR article of all time, he took business leaders to task for the “values fad that swept through corporate America,” exposing a trend that made claims without changing culture. The intervening decades have produced meaningful, values-based corporate environments. But there is still much work to be done—and opportunity to be had.
Corporate culture—based on clearly stated, consistently lived values—is a powerful business asset. It sets your business apart from the competition, clarifying why people should buy from you or want to work for you. Ultimately, it creates bottom line value: research from Gallup shows that companies focusing on culture see up to 29% higher profit, 19% higher sales, and 72% lower employee attrition rates.
That last finding is pretty compelling in this era of “The Great Resignation.” Gartner reports that the pandemic-induced acceleration in employee turnover will not soon abate, but keep increasing, up to 20% above pre-pandemic levels. I believe culture can be a part of the cure, if driven by real core values that define and differentiate the organization. Another study, this time from the MIT Sloan Management Review, found that, “Not surprisingly, companies with a reputation for a healthy culture…experienced lower-than-average turnover during the first six months of the Great Resignation.”
Are your core values genuine or generic?
Unfortunately, companies often settle for popular platitudes in place of well-vetted values. Another MIT study revealed that while 72% of companies cited values as the “foundation of their culture,” many seemed satisfied with a generic description of what should be their unique essence. “Integrity was the most common [value], listed by 65% of all companies, followed by collaboration (53%), customer focus (48%), and respect (35%).”
These are, obviously, all admirable values. But do they honestly apply to the way a company operates? And even if so, how do they, or any companion values, differentiate the company from the competition?
When initially defining your values (or to ensure your current values are meaningful), leadership teams should take a hard look at their value statements. You can stress-test each of your core values by answering a series of questions: is this value essential, and lasting? Does living out this value sometimes hurt, and are you willing to sacrifice to maintain it? And does it make certain people wrong for your organization?
Click here for a full regimen of questions to stress-test your core values.
Strengthen your values with some exercise
If you answer yes to most of those questions, your core values are in good shape. If not, and you are willing to work to get them there, you might enlist an outside consultant to facilitate a core values exercise (and to provide the ruthless objectivity required).
But if that’s not in the cards, try one of our favorite and simplest methods of finding your values, developed by Gino Wickman in his book, Traction. His book, and the EOS management system that sprang from it, offer a wealth of tools to "help entrepreneurs clarify their vision, gain traction and increase team health.” Their guidance on how to uncover authentic core values is to:
Gather the leadership team, including the CEO, founders and key managers
Ask each to write down the names of three employees who are the “true superstars” in the organization, people who fit the culture, and it fits them
Consolidate the lists, with stars next to names that appear on more than one list
With those starred names in mind, create a list of characteristics that make them indispensable
Cull the long list that results via a “keep/kill/combine” exercise, refining until you have 5–7 descriptors
This is a great first pass at values that are true to your organization.
Beware the big three value traps
Whatever your method of getting there, once you arrive at a fresh statement of core values, stress-test them again. This will keep you from falling into one of three common traps that Lencioni describes in his seminal article. Think of these as the pitfalls of not-quite-successful values exercises:
The aspirational value. In this case, you’ve overshot the current mark. You’ve stated what the company aspires to be in the future but isn’t quite living up to now. Proclaiming unsupported values damages corporate (and leadership) credibility, and their mismatch with current experience can undercut employee and customer relationships.
Permission-to-play values. Here you’ve undershot the mark. You’ve stopped at baseline expectations that should apply at any organization, but which fail to differentiate your company from competitors. If your new values statement is full of easy platitudes, you’re likely stuck in this trap.
Accidental values. Failing to honestly examine and accurately state your core values doesn’t mean that you aren’t presenting any. It simply means that you’re not in control of what they are. A “values vacuum” will be quickly filled by the dominate aspects of key employees or functional policies—some of which may prove dangerously negative.
If you haven't read Lencioni’s article in 20 years (or at all), take a few minutes to do so now. Then decide if it’s time for you to reexamine the core values that may ultimately determine your bottom-line value.
