“Core values” is a commonly used phrased in today’s modern business language, but because they’re sometimes mistakenly used interchangeably with terms like “mission statement” and “corporate goals,” it’s important to clarify the definition of what organizational values really are. In doing so, executives can ensure they’re using their goals and talent management framework (such as OKR) effectively by incorporating the principles and philosophies upon which the company was built.
What Are Core Values?
In addition to your company’s set of principles and beliefs, core values are also the factors that support your organizational vision. They should also be ingrained within your company culture. For instance, if “innovation” is one of your core values, your teams should feel that their ideas and input are always welcome.
Why Do You Need Them?
Having core values isn’t just something that looks good on paper. One of their functions is to communicate to your customers and prospects what your company is about. They also describe what makes your company unique; in other words, if one of your values is environmental awareness, your company could have a competitive edge over less eco-conscious companies in the same market.
However, core values also play a functional role within your company, too. When it comes time to make important strategic decisions, a good way to decide the right path for your company is to revisit your core values. For instance, if you’re considering vacation policies and one of your values is “balance,” you’ll need to consider how your policy choices might impact your culture. Thus, incorporating your values into decisions you’ll make externally, as well as within your own environment, helps you “walk the talk.”
Additionally, core values can be used to create an attractive employee value proposition. They’re being increasingly incorporated into recruitment strategies as a way to attract sought-after talent. Many highly skilled employees can afford to be choosy with their employment options; setting yourself apart as a company with desirable values gives you leverage over other companies.
How Can You Create Them?
Jim Collins, author of Good to Great, Built to Last, and a number of other must-read business titles, has a precise method by which he encourages organizations to define their core values. He calls it the Mars Group Exercise. Here’s how it works:
- Identify a handful of employees – think 5–7 people – who have demonstrated their understanding of your company values. They could be your “A Players,” and they should most definitely be esteemed amongst their peers, direct reports, and senior management. This group is known as your Mars Group.
- Have your Mars Group members identify their perceived core values of the company. Then, ask them to consider those values while asking themselves the following questions:
- Would you still maintain these values, even if you no longer had a need to work here?
- Do you think these values will be as relevant 100 years into the future?
- Should the company still hold true to these values, even if it puts us at a disadvantage against our competitors?
- Would you try to implement these values into your own company, regardless of its operational strategy?
The way these questions are asked helps separate values from strategy. While values should never waver, strategies may shift based on both internal and external factors.
If your Mars Group can answer affirmatively to each of the questions, then your values are clear. If not, it could be time to revisit your philosophy, beliefs, and principles.
Core Values Examples
Here’s a list of some common core values you can refer to: