Core values help companies make better decisions, practice transparency, and align teams around a shared vision.
- Company values are principles and ideologies that drive decisions and uncover and reflect the business’s identity.
- Values are crucial because they contribute to better company culture, goal achievement, and brand reputation.
- Tips for defining company values:
- Think about the long term
- Make sure they won’t crumble under competition
- Ask for feedback
- Consider the hiring process
- Be as specific as possible
- Use phrases
- Socialize your core values
Every business starts for a reason, and it’s not just to make money. Maybe its rationale is to provide a crucial service to a community in need or use years of experience and expertise to help other organizations solve a problem. This is the core purpose of the business, which enables owners to set the foundation for what’s to come.
Digging into these ideas will help you define your core values—those basic principles about why you exist, what’s most important to you and your employees, and how the business fulfills its purpose. Having a solid grasp on these values helps you create and meet your goals and continue growing effectively and confidently.
What are an organization’s values?
Core values are the lifeblood of your business. They represent why you started the company in the first place and help you define its basic identity. They serve as fundamental principles that guide decisions and goals.
Company (or core) values aren’t dry concepts like a business model or desired revenue. They are beliefs and ideologies. Examples include:
These words can be combined and turned into phrases for a more specific impact. Identifying core values means reckoning with purpose and determining what you want to guide the business and its individual departments and employees.
Why are company values important?
Core values aren’t just nice additions to an “About Us” web page. They help accomplish many tasks that can make or break the business. Key areas where company values come into play include:
- Leadership decision-making
- Company culture
- Customer service and satisfaction
- Employee engagement and morale
- Brand reputation and transparency
- Behavior norm-setting
- Recruitment and employee retention
- Target setting and planning
Having clear values helps everyone stay on the same page when solving problems or interacting with the public. Employees understand what’s most important to the company, and they thus feel a stronger personal connection to the business’s purpose and identity.
How to define your company values
Identifying your purpose and how you fulfill it may seem straightforward, but it can be hard to come up with a succinct way to say these things. Core values should be simple for people to understand and meld with the business’s actions and priorities. Here are some tips:
1. Think about the long term
New businesses often define their core values explicitly according to their current goals. But remember that for startups, these objectives may look a lot different once the company is more established. It’s hard to think about much else aside from growing right now and getting new customers. But push beyond those immediate goals to uncover the why and how behind the business.
2. Make sure they won’t crumble under competition
When you come up with a value, think about whether it would hold up if the competition suddenly heats up and you have to make some pivots. If you believe a value could change in different circumstances, it shouldn’t be one of your core values. These principles should stay strong no matter what the climate looks like.
3. Ask for feedback
You don’t have to define values on your own: ask employees and colleagues who have a stake in the company’s success. What comes to mind when they think about the purpose of the business and how its people behave? What guides team members to perform well? What do they think customers need to understand?
4. Consider the hiring process
Values should help you make hiring decisions. This means looking for candidates who share the organization’s values and are excited about its mission. These principles should help you hire better cultural fits; they serve as a filter. So, explicitly think about whether they align with and aid the recruiting process.
5. Be as specific as possible
Some values may sound abstract since they are not always measurable items. Sure, every business wants to come off as “honest” and “dedicated.” But can you actually delineate how you’re going to be those things? Be as specific as you can about why a value is vital to the business and how you and your team will express and live by each principle. Think about the daily practices and habits that will lead to these values becoming a reality.
6. Use phrases
Core values don’t have to be one word, like the examples above. They can also be short phrases that better explain your principles. You can combine words into one value when it makes sense, like “creative and driven.” You can then explain that your team is “continually motivated to come up with innovative ideas to serve modern clients.” Remember that you should be able to provide a short description under each value to dig into what a concept means.
7. Socialize your core values
Once you know who you are and what your values are, it’s time to put them into practice. Socializing your values means that the team acts on and discusses them. They’re brought up to motivate employees and inspire customers. Consider implementing a rewards system that provides positive reinforcement for people who prioritize and exemplify the values.
Identifying your core values is a necessary step to knowing why your business exists, its foundational principles, and how you serve clients or customers. They align teams and help you make decisions, both short and long-term. When you feel like your goals are getting off track, you can revisit your values to reassess and make changes as needed.
Sometimes, you may need a little help defining your core values and aligning them to your business model. Provident CPA and Business Advisors can review your systems and help you establish the right practices to meet your desired outcomes. We utilize the Entrepreneurial Operating System (EOS) to help our clients nail down their six key components of the business: Vision, People, Data, Issues, Processes, and Traction.
Contact Provident today to learn more.