Company Values Process for Discovering Your Business's Core Values

Most business never establishes core values. Even fewer businesses use them effectively and live by them in meaningful ways.

There are good reasons why you know the names of many organizations that use them, including Netflix, Amazon.com, Google, Southwest Airlines, Zappos, IKEA, Ritz-Carlton, and Under Armour.

Whether you’re a CEO of a 20,000 person organization or an entrepreneur with a team of four, core values are vital to creating a thriving business that consistently produces results.

Core values are a critical tool for outperforming leaders.

Why?

12 Reasons Core Values Are Important for CEOs

Here are 12 reasons business leaders should take core values seriously.

Core values can:

Set a foundation for the organization’s culture.
Help attract, hire, and retain the right type of people.
Align a group of people around specific, idealized behaviors.
Positively influence how team members interact with one another.
Guide difficult decisions by determining priorities in advance.
Improve morale and become a rich source of individual and organizational pride.
Inspire innovations aligned with organizational strengths.
Provide a benchmark for assessing performance (both individually and organizationally).
Help prevent conflict and mitigate conflicts that do arise.
Improve how the organization serves its customers.
Support the differentiation of a brand in the minds of its customers.
Help attract the right breed of customers.

Core values are an intangible asset that provides a necessary compass for many dimensions of your business.

But what are core values, really?

Company Core Values Defined

Core values are part of your company’s DNA. They define what your organization stands for, highlighting an expected and idealized set of behaviors and skills.

Your company’s values lie at the core of its culture. Values are fundamental, enduring, and actionable. Driving priorities and decisions, values help determine how a company spends its time and money.

The actual values of an organization are determined mainly by where it invests its resources and how its employees behave, not what the leader says or what’s listed on a website.

When properly executed, core values play a fundamental role in attracting and retaining talented people, making difficult decisions, prioritizing resources, reducing internal conflict, differentiating the brand, and attracting profitable customers.

Why Your Business Needs Core Values

Human capital is the lifeblood of your business. Attracting top talent in a fast-changing global marketplace—and retaining them—takes more than high salaries and other benefits.

Talented people want to work in environments where they can professionally and personally develop and thrive. Top performers seek out organizations with values that match their own. As a consequence, the importance of a company’s culture is becoming more apparent.

Numerous research studies have highlighted that corporate culture is a primary driver for innovation. When core values are successfully integrated into your business, they set the foundation for the culture.

Values set the climate of the workplace and help determine how success is defined and measured.

Core Values From 5 Successful Companies

Here are examples of values from five organizations that value their company’s culture:

Zappos Family Values

Deliver WOW Through Service
Embrace and Drive Change
Create Fun and A Little Weirdness
Be Adventurous, Creative, and Open-Minded
Pursue Growth and Learning
Build Open and Honest Relationships With Communication
Build a Positive Team and Family Spirit
Do More With Less
Be Passionate and Determined
Be Humble

Google’s Ten things we know to be true

Focus on the user and all else will follow
It’s best to do one thing really, really well
Fast is better than slow
Democracy on the web works
You don’t need to be at your desk to need an answer
You can make money without doing evil
There’s always more information out there
The need for information crosses all borders
You can be serious without a suit
Great just isn’t good enough

Netflix’s Culture: Behaviors and Skills They Value

Judgment (making wise decisions; identify root causes; think strategically)
Communication (listen well; concise speech; respectful)
Impact (amazing amounts of important work; consistently strong performance; focus on results, not process; bias to action, not analysis)
Curiosity (learn rapidly; seek to understand; broad knowledge)
Innovation (re-conceptualize issues to discover practical solutions; challenge prevailing assumptions; create new ideas that prove useful)
Courage (say what you think; make tough decisions; take smart risks; question actions inconsistent with their values)
Passion (inspire others with excellence; care intensely about company success; celebrate wins; tenacious)
Honesty (candor and directness; non-political; quick to admit mistakes)
Selflessness (seek what is best for Netflix; egoless when searching for best ideas; help colleagues; share info openly and proactively)

The Ritz-Carlton’s Service Values

I build strong relationships and create Ritz-Carlton guests for life.
I am always responsive to the expressed and unexpressed wishes and needs of our guests.
I am empowered to create unique, memorable and personal experiences for our guests.
I understand my role in achieving the Key Success Factors, embracing Community Footprints and creating The Ritz-Carlton Mystique.
I continuously seek opportunities to innovate and improve The Ritz-Carlton experience.
I own and immediately resolve guest problems.
I create a work environment of teamwork and lateral service so that the needs of our guests and each other are met.
I have the opportunity to continuously learn and grow.
I am involved in the planning of the work that affects me.
I am proud of my professional appearance, language and behavior.
I protect the privacy and security of our guests, my fellow employees and the company’s confidential information and assets.
I am responsible for uncompromising levels of cleanliness and creating a safe and accident-free environment.

Under Armour’s Brand Values

Let’s be great. Build great product, tell a great story, provide great service, and build a great team.
Integrity. Without it we cannot be a team.
No one person is bigger than the brand—Team. No athlete either.
Make one dollar spend like three. We must be creative with the resources we have.
Help others. Volunteerism and serving others are vital parts of our mission.
Walk with a purpose. Everything we do is part of a deliberate, long-term strategy/vision. Know where you’re going.
Protect the UA culture, but embrace change. Evolve and innovate. We’re a different company every 6 months, and we can’t use culture as an excuse to not change product, process, or people.
Be humble and stay hungry. Nobody’s going to give us anything. We have to earn it every day.

Notice how all of the above values are specific and actionable. They help define each company’s culture and encourage a specific type of behavior within each organization.

company core values tony hsieh

7 Steps to Discovering Your Core Values

As the leader of your business, this process begins with you—your interest, passion, and commitment to establishing a set of values that will guide your culture through decades of growth.

Taking the time to define your values, embody them, and to keep them fresh and alive in everyone’s minds are some of the most vital things you can do to promote a thriving culture.

Arriving at a concise and short list of values can be a daunting task. You can find lists with hundreds of values to choose from. However, I don’t advise using a predetermined list.

Why? Values aren’t selected; they are discovered. Freely associating in brainstorming sessions with your team will invariably yield superior results.

Ready to get started? Here are seven steps to creating distinct and meaningful core values that will serve as a foundation for your business:

Step 1: Begin with a Beginner’s Mind

It’s too easy to presume we know the answer at the start, and therefore, to never truly embark on a creative discovery process.

Adopting the mind of a beginner—someone without any preconceived notions of what is—gives you access to more ideas and a fresh perspective on your business.

It’s imperative to approach the discovery of core values without any preconceived notions and beliefs about your culture and your business.

Taking a deep breath and momentarily clearing your mind may be all that’s needed. Remembering that your conscious mind doesn’t know all of the answers is helpful too.

Step 2: Create a Master List of Your Team’s Internal Values

Enroll experienced and engaged team members in this process.

Have everyone list what they believe to be your company’s imperatives, ideal behaviors, desired skills, and greatest strengths.

Ask:

What do you believe defines our culture at [company]?
What values do you bring to your work that you consistently uphold whether or not you’re rewarded?
What do you truly stand for in your work? What do you believe our business truly stands for?
What do our customers believe about us? What do they believe we stand for?
What values does our company consistently adhere to in the face of obstacles?
What are our company’s greatest strengths?
What are the top three to five most important behaviors we should expect from every team member (including you)? “Actual company values are the behaviors and skills that are valued in fellow employees,” explains Netflix CEO Reed Hastings.

Your goal is to discover the pre-existing values within your organization (assuming you’re not an early-stage startup, in which case you get to dream up these values based on what’s most important to you).

It will be difficult to reinforce values that aren’t already part of your organization’s character.

It’s best to highlight your organization’s current strengths and build on them.

While some companies hire an outside consultant to help uncover their core values (which is appropriate at times), it is vital that you, as the CEO, are playing an active role in this discovery process.

If you don’t take this process seriously, it’s unlikely your team will.

If you are going to lead the discussion, however, be sure that you’re not shaping the conversation or influencing people’s answers.

Step 3: Chunk Your Values into Related Groups

Combining all of the answers from step 2, you now have a master list of values.

If you and your team took this process seriously, you may have between 25 and 75 values. Obviously, that’s far too many to be actionable and memorable.

Your next step is to group these values under related themes. Values like accountability, responsibility, and timeliness are all related. Group them together.

Step 4: Highlight the Central Theme of Each Value Group

For example, values like honesty, transparency, integrity, candor, directness, and non-political are all related. Group them together.

Then select a word that you feel best represents the group. Integrity, for example, might work as a central theme for this grouping.

This process is best done with a small team, but this brainstorm session can be an open meeting as well.

Step 5: Focus on What You Value Most

Now comes the challenging part. After completing step 4 you still might have a sizable list of values.

Here are a few questions to help you whittle down your list:

What values are absolutely essential to your work environment?
Which values represent the primary behaviors your organization wants to encourage and stand by?
What truths are essential to supporting your unique culture?

You can’t be all things to all people. Your culture is unique. Its values should emphasize what matters most to your team.

Let it highlight what makes your organization a place that talented people want to work.
Be sure it represents both your current and the ultimate expression of your culture.
Strong values require difficult decisions to be made in order to uphold the values.
Avoid prosaic or generic values (often listed in a single word, like “accountability”) because they won’t establish a strong, distinct culture.

In reviewing the cores from companies like Google, Zappos, and Amazon, you’ll notice that some of them are unconventional, even controversial.

These values help create unique cultures.

For example, Amazon.com’s “Have backbone; disagree and commit” is not a common core value for a multi-billion dollar retailer, but I bet this principle plays an important role in Amazon’s culture.

How many core values should your organization adopt?

Too few and you won’t capture all of the desired behaviors and unique dimensions of your organization.

Too many and your employees will get overwhelmed and they won’t be upheld.

While the number of core values differs for each organization, the magic range seems to be between 5 and 10.

Step 6: Craft Your Company’s List of Potential Core Values

Now creativity really comes into play. You’ll notice from the core values examples from successful companies (above), that none of them simply list their values in a single word like Integrity, Accountability, or Fun.

While a one-word value might be easier to remember, it is difficult for a single word to become a distinct expression of your culture.

More importantly, it is incredibly difficult for a single-word value to trigger an emotional response with your team.

Be sure to enroll at least one skilled writer from your team at this stage of the process.

Here are a few tips and guidelines for crafting your values:

Use inspiring words and vocabulary. Our brains are quick to delete or ignore the mundane and commonplace. A phrase like “Customer Service Excellence” is not going to inspire you or your employees. Zappos’ “Deliver WOW Through Service” just might.
Search for words that evoke emotion. Words and phrases that trigger emotional responses will be more meaningful and memorable in the minds of your employees.
Focus on your organization’s strengths. It’s fitting that a company like IDEO would promote principles like “Encourage Wild Ideas” and “Build on the ideas of others.” Play to your strengths in crafting your values.
Make it meaningful. Slogans and taglines are not core values. Make your value statements rich and meaningful to your people.

Highlighting values into memorable phrases or sentences forces your organization to more succinctly define the meaning behind each value.

It gives you the opportunity to make the value more memorable in the minds of your team.

Step 7: Test the Ecology of Each Value

Once you’ve finalized your list of core values, it’s time to test them.

Here’s a quick checklist to test the integrity of your new core values:

Will each value help you make decisions (especially the difficult ones)?
Are your core values memorable? Will every team member be able to encode them in their minds?
Does each value represent distinct elements of your overall culture?
Does each value speak to at least one desired behavior?
Will you be willing to uphold these values 50 years from now?
Are your values congruent with your behavior (when you’re at your best)? Are these values BS-tested? Will an employee be able to observe hypocrisy?
Can your organization uphold these values in stressful and difficult situations (like increased competition, product recalls, market turbulence, or downsizing)?
Are you willing to defend these values unequivocally? That is, does each value permeate through the organization?

Now, let’s make sure all of your efforts yield long-term results.

How to Make Your Core Values Stick

Now, any company can put together a list of values.

Enron, for example, listed core values in their 2000 annual report including “Respect: We treat others as we would like to be treated” and “Integrity: We work with customers and prospects openly, honestly, and sincerely.”

Obviously, listing a set of values isn’t enough.

Studies show that values have to be internalized by employees and integrated into the culture for them to create positive change.

Here are eight tips for making this happen:

1) Make sure you embody each value at work.

First and foremost, make sure, as a leader, you are modeling behavior based on the company’s values. If not, these values will lose their power and will not stick no matter what else you do.

2) Clearly define, explain, and articulate your values to your team.

Most of the core values of the organizations I’ve studied are backed by significant context for each one. This might take the form of a one-paragraph description, a company video, or a slideshow to bring each value to life. The more depth, texture, examples, and images you can give to each value, the more power they will have.

3) Educate your organization on your values.

This is vital. If you don’t constantly educate your team and reinforce the importance of the values, they will become mere slogans and will not influence your culture. Hold a team meeting devoted to rolling out and discussing your core values. Make your values an on-going part of your business discussions. Distribute a copy of your core values to every employee.

4) Hire people who embody your values.

If you’re doing a good job promoting, educating, and embodying these values as an organization, talented people aligned with these values may eventually seek you out. Regardless, it’s imperative that you hire for the attitudes and behaviors that shape your culture. If not, your new hires will only weaken your organization—no matter how talented they might be.

5) Defend and uphold your company core values.

If you’re going to establish core values that define your culture, what are you going to do when an employee clearly doesn’t honor them?

You can’t change a person’s values; you can only hire people who share the same values. If you don’t let this employee go, what message are you sending about the importance of these values?

Your company core values shouldn’t be altered in difficult situations like economic downturns. These values were established as a beacon to see the organization through both calm and rough water. Your values should be timeless, sustainable, and unchanging. Your values should be timeless, sustainable, and unchanging.

6) Reinforce your values with consistency.

Using values in your business is like any other business discipline. All disciplines require consistency and practice.Reference the values in meetings; they need to become part of how everyone behaves and makes decisions. Reward, recognize and celebrate employees and teams that exemplify the company’s values.

7) Bring your values to life through storytelling.

Keep your values fresh and relevant. Employees will ignore a wall plaque within days, if not hours. Continue to challenge yourself to find ways to keep your values fresh and alive in your employees’ minds.

Take note when team members are actualizing the values. When you reward and recognize these behaviors, be sure to share it with the rest of the team. Ask team members to share stories of how they saw one of their core values in action within the past week.

Storytelling of this nature is one of the best ways to encode these values in your team’s minds and to give the values a life of their own.

8) Promote your values on your website.

If you’re looking to hire new talent, company values can act as a homing beacon for talented people who share your values. The About Us section of your website is a great place to highlight the unique features of your culture.

Here are a few noteworthy examples:

Zappos Family Ten Values has received significant attention in the media, partly because CEO Tony Hsieh set out to build his company around a particular culture and used these core values as an instrumental tool.
The Container Store’s What We Stand For demonstrates how the company puts employees first and how it seeks to actualize its seven foundation principles. No wonder they are ranked one of the top 100 places to work by Fortune magazine year after year.
Whole Foods Market’s Values section of their website shows they have invested resources in clarifying why they are in business and what’s most important to them. They are clearly attracting individuals who share their social mission.
Southwest Airline’s The Southwest Way is perhaps the quintessential example of a distinct company culture that lives its unique and playful set of values.

Notice that companies that are actively using core values to support their culture tend to provide significant context for each of their chosen values.

Beyond a simple word or phrase, they can clearly define what their values mean to them. And, that helps bring their values to life.

Naturally, the organization’s practices—both internally and externally with customers—must be congruent with their shared values.

Now, It’s Your Turn

Core values offer savvy CEOs and entrepreneurs powerful ways to unify your team, attract new talent, make effective decisions, and bring out the best in your people.

The discovery process highlighted above will guide you toward creating a more thriving culture.

If you want help discovering your core values, drop me a line.

Also, be sure to discover your personal core values here.