A complete guide to organisation values in the modern era

By Indeed Editorial Team

Published 19 May 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

An organisation's values can have an impact on everything a company does. From the way a company behaves to the overall business strategy it follows, organisation values guide everything. Values can be both virtuous, such as being ethically aligned or being more goal-oriented, such as focusing on innovation. In this article, we cover all the essentials related to creating organisation values.

Related: What are organisational skills? (Types and examples)

What are organisation values in business?

Organisation values are a set of principles that businesses create and implement to give them a logical direction. These are the core principles or ethics that guide a company. An organisation typically follows these values in any actions it takes. It's these organisation values that shape a company's culture and operations. These values can also help define the way a company interacts with both employees and customers. It's important that every decision a company makes adheres to these values.

The values of an organisation are like personality traits. Some examples of these values could include things like loyalty, honesty or accountability. These values do more than just shape what a company does, they guide how a company and its representative do things.

Why are organisation values important?

The values of an organisation play various important roles in a company. No matter the business type or size, having clear values can:

Guide decision making

Organisation values make it a lot easier for employees of a company to make decisions. This is because these values help employees understand how to act in certain situations and what the company expects from them. Whenever managers face difficult decisions, they can look towards the organisation's values for guidance. This makes decision making faster and easier and also allows for more consistent decisions and actions across all departments.

Differentiate a company

Organisation values help companies stand out from the competition and differentiate themselves in the eyes of the customer. If there are multiple organisations in a sector all offering the same thing, each organisation's values can help customers decide which one to choose. Values give an organisation culture and personality. These values also change the way a company interacts with a customer and shift the customers' perception of the company. By following a unique set of values, organisations can differentiate themselves from the competition and carve out a unique place in the market.

Align a company with customer values

Values play a role in driving customers' purchasing decisions, typically because customers prefer supporting businesses that share the same values as them. It's therefore important that companies let their values be guided by those of their customer. Start by identifying your core customer cohorts, and then drill down to better understand their values.

Your organisation's values can be a culmination of the values of all your different customer cohorts. For example, outdoor clothing and gear company, Patagonia, understand that their key customer cohorts value the great outdoors and its conservation. For this reason, one of their values is to cause no unnecessary harm whilst going about their business.

Help companies find the right talent

The values of an organisation are also there for the employees. Values-based interview questions are often asked to help companies find talents who match with what they stand for. Candidates are also attracted to companies based on their values rather than just what they offer. Clearly defined values help a company find talent that fits its culture.

Hiring in alignment with your company's values helps organisations find better talent. For example, start-ups without the hiring budget to compete with major companies can secure top-tier talent by attracting people with their values. Being honest and open about values also helps employees to feel happier because they know what to expect when they join the organisation.

Related: Values-based interview questions and sample answers

Improves employee engagement

Organisation values make up an essential part of employee happiness. The right values boost employee morale and motivation. This is because employees know they are working towards values and principles they agree with, which provides a greater level of job satisfaction. When a company's values resonate with its employees, the employees find greater happiness in the work that they do. This improves retention levels and helps employees to perform better. A happier company is generally a more successful company.

Related: How to boost employee morale in six steps

Guide the business strategy

Finally, organisation values play a guiding role in the company's business strategy. Just like values help employees to make decisions, they can also help the business to establish its direction. Values help businesses to identify areas that they can focus on. They help organisations come up with creative solutions and create a roadmap for the business journey ahead. A well-planned business strategy plays a major role in the success of an organisation. Having clear values can contribute heavily towards this.

How to establish the values of an organisation

The process of finding and creating organisation values is incredibly important for any business. Here are a few basic steps and questions that businesses can ask themselves to establish their values:

1. Determine the organisation's purpose

Start by establishing a clear mission and vision for the company. Understanding this can help you shape a set of relevant values. By knowing what you want to achieve, you can create values that match this goal. The purpose of an organisation and its values are very closely linked, so make sure you understand your mission first.

2. Decide how customers perceive the organisation

Beyond what you want to achieve, think about how you want the world to see you. This includes customers and employees and it also includes stakeholders and the general public. If you are unsure, you can send out a survey to customers and employees. Ask them what they feel the company's core values might be and use this to confirm the principles you choose.

3. Figure out how values fit into the organisation process

Values are important, and they only mean something if you actually implement them. Once you've established what kind of values you want to apply, you may want to think about how they fit in practice. Organisation values are more than just statements one feels obligated to make, instead make them actionable and realistic. Make sure to incorporate any values you establish into company operations.

4. Determine how behaviours align with those values

Values can also guide workplace behaviour. Create and apply your company values to the workplace and these should manifest themselves in your employees' behaviours. Recognise how employees and departments can follow these values and express them in their day-to-day behaviour. It's important that you think about exactly what each value means and how you can embody it. Group discussions and workshops are great ways to incorporate values into organisation practices.

5. Outline how to communicate the values

Now that you've established and defined your company's values, communicate them to employees and customers. Organisations strive to understand how they can effectively put their values out into the world. This means communicating values in an actionable way as opposed to just having them exist on your company website. Communicating values is something any good organisation does on a consistent basis. Regular team meetings are a great place to highlight and instil values in the workforce

They can be outlined on your website or expressed in any other visual form, but they shouldn't end there. A good strategy is to put effort into recognising employee behaviour and achievements. By recognising when employees adhere to the company values, you can continually express and communicate the company's values to people within the organisation.

6. Formalise the values

Along with continual communication, it's important to formalise values. This can include a written values statement. This statement can encourage employees to act according to the company's values. An organisation's values are typically always accessible and visible both internally and externally. Formalised values also help employees practise them long term.

7. Continually develop your values

The world is always changing, so it's beneficial to change organisation values accordingly. Once you've created a formal set of values, go back and reflect on them often. Make sure they stay relevant to the organisation. As industries, customers and employees change, a company's values change too. A great strategy is to get employees involved and make sure that the company is developing its values in line with theirs.

Clear organisation values bring many advantages to a company. They play an essential guiding role in how an organisation operates, how its employees behave and whether customers choose the organisation. If you are yet to establish organisation values, follow the steps listed above. They make a major difference in the overall success and direction of a company.

Please note that none of the companies mentioned in this article are affiliated with Indeed.

Explore more articles