What do core values mean? Why are they important and what happens in your company if you have the wrong or no core values? PLUS: The NB link between values, performance, behaviour and your company culture
Low productivity. High turnover. Unhappiness and negative behaviour. Ever wonder what actually happens inside a company that has no core values? Or doesn’t focus on them or develop them? Or pushes the wrong core values on people – those beautifully PR-firm-crafted vision and mission statements that are just “for show” and don’t really speak to your teams’ actual heart and minds?
Hold on, because you might recognise a few of these “symptoms”. You might even have tried to address or “fix” them in any number of ways. But note: there’s a real good chance that a lot of the performance and productivity-based challenges inside your company actually stem from a lack of core values, which boils right down to your company culture.
WHAT DO “CORE VALUES” MEAN?
We all have individual core beliefs – housed in information in your neural pathways, enforced by your reticular activating system (see how your brain works at work), and those will feed into our personal core values – your fundamental guiding principles. Things like: “I don’t steal”, “I am compassionate and kind” etc.
But we humans are social animals. So, if you put a group of us together, we very quickly establish a culture – a way of doing things around here. Which is essentially a natural way of sorting out which collective core values we are going to uphold. That’s how you get families, communities, churches and companies.
And it might not overtly feel like we actually have control over the process, but in actual fact, we can influence and change any group’s core values. In fact, that’s what you should be doing in your business.
IMPORTANCE OF KNOWING AND LIVING YOUR COMPANY CORE VALUES
Simply put, core values are what supports your company’s vision and creates your culture. It’s part of your identity – to the point where you’ll probably battle marketing your brand well if you don’t know your core values. But values also impact operations: You might be surprised how many everyday organisational challenges stem from a lack of defined core values.
WHAT HAPPENS IF YOU HAVE UNCLEAR, WRONG OR NO CORE VALUES?
PROBLEMS WITH PERFORMANCE
There is a direct and proven link between company value systems and their performance. As this study points out, companies with well-developed values yielded 5 times more profit and investor returns on the US stock market. And this Ugandan study showed that values impact entrepreneurs’ performance even in an informal trading market.
And this study found “significant evidence” that core values contributed to the net profit of Russian banks (established business in an emerging market).
So what’s causing it?
LACK OF CORE VALUES & LOW PRODUCTIVITY
There’s a lot of evidence that when we can’t relate to the values of a business, we become disengaged – see this study. And studies by the Queens School of Business and Gallup shows how disengagement leads to 60% more errors, 18% lower productivity and a 65% lower share price for the company.
YOU COULD GET A BAD REPUTATION
Similarly, when employees are unclear about the values of the company, they’ll substitute it with their own cultural interpretation. And then you don’t have coherent external contact. There’s a lot of reason to believe that your values and corporate will reflect in customer complaints.
YOU COULD SEE HIGH STAFF TURNOVER
Company values have also been linked to employee loyalty – see this study at Ikea. And the American Psychological Association warns that workplace stress can increase voluntary turnover by up to 50%. In fact, you might even pick up value-based or cultural issues in the fact that you’re always understaffed or paying too much overtime.
LOW TEAM SPIRIT/NO COOPERATION
There’s also a lot of research that shows that true collaboration (not just in this meeting or on this one task), comes from having shared values. And if your team doesn’t know what the company values are, you might notice a low team spirit or lack of cooperation. See what happens when you have excessive employee withdrawal.
YOU’LL SEE IT IN PEOPLE’S BEHAVIOUR
How your people behave is another physical way to see into your company’s culture. And if you haven’t done the work to get your core values clear ad entrenched, you could see behaviours you don’t want.
TARDINESS & ABSENTEEISM
That same Gallup study we referenced earlier shows that disengagement (often from unclear values) leads to 37% higher absenteeism and 37% lower job growth. Because people just aren’t motivated if they can’t relate to the values behind what they’re meant to be doing. See the REAL reason why some employees are late.
DEFENSIVENESS & LACK OF RESPONSIBILITY
For much the same reason, disengaged employees might refuse to take responsibility and even become defensive when you start demanding more.
LOW PARTICIPATION, INNOVATION & SHARING
It’s very much the same participation and sharing with the team – without shared values, there’s little to build team spirit around. And we’ve already seen how lack of work clarity leads to problems with innovation.
RESISTING CHANGE & LEARNING
Remember our 37% lack of job growth stat? It’s not just a symptom of lack of clear values, it’s because people become so disengaged, they do not want to go any further or get better in their current role or company. We humans can put up with a lot. So we’re usually well capable of just doing the same things over and over for a paycheque – but then you hit great resistance when any change or growth is required. And that’s why people resist it.
OTHER BEHAVIOURS YOU MIGHT SEE WITH LACK OF COMPANY CORE VALUES
- Unethical behaviour
- Conflict and disagreements
- Boredom and general unhappiness
- Cliques and gossip in the workplace – see the business cost of workplace exclusion
HOW TO WRITE CORE VALUES AND LIVE THEM
Now, you might be tempted to believe the general media assumption out there – just Google “core values” and you’ll see there are lists of values and tips on “how to write” them for your company etc. But there’s something you should know about values – they are strongly linked to our core beliefs.
And, as you can guess, values and beliefs are “invisible” – beliefs are the intangible, intrinsic part of our metric for understanding company culture. You can’t see or quickly test values or beliefs (they only show themselves through behaviours). Just like you can’t just sit around a table and quickly jot them down with any guaranteed certainty or accuracy.
Well, you could try. You might just be lucky and nail it. But you could just as easily end up with misaligned or inaccurate value statements – much like the PR-line vision and mission. And then you have the same problems again.
So how do you pen down core values that actually mean something? Well, it will all start with identifying, challenging and aligning core beliefs. Yours and your peoples’. And for that, you’ll either need someone on your team who’s an absolute expert in psychology and business, or you’ll need a partner who can facilitate it for you.
Good news! We are a change management company, and we specialise in helping companies discover, change and develop their Company Culture. We help companies get right down to their core values, so they can grow & perform at the optimum level, empowered with science-based organisational development that actually works.
And we WILL SEND a team to your company RIGHT NOW to see how we can help you figure out what your core values are and should be – with no obligation from you!
Let’s figure out what’s going on, so we can help energise your people for your exponential growth.
ABOUT OUR #COMPANYCULTURE PROJECT
The more you look at it, the more of the common, everyday struggles we face inside our companies are related to our organizational cultures. Even the most apparent efficiency and performance obstacles we face come as a result of cultures.
That’s why we’ve tasked our #TeamCompanyCulture to talk directly to the issues we see in our businesses every day. Connect with the team via firstname.lastname@example.org or phone 071 918 3217.
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