What are company values, and why are they important?

Leaders might define company values as the principles that guide or define a mindset, or group of behaviours. They are the standards we set ourselves to influence how we do business. They could be described as the bullet points for the collective beliefs, ethics and guiding morals that help organisations shape business objectives and standard practices. Some might wrap this up in a bow and call it ‘company DNA’.

The values of a company could help leaders shape organisational behaviours and culture, which may help increase performance. This may be felt across the business in helping to foster teamwork, make better decisions, attract and recruit the right people, shape employee brand, communicate, collaborate, and define strategies.

Having defined core values is beneficial in presenting a personality based on shared beliefs. According to a BBC report: ‘More people say they are influenced by a company’s values and beliefs when they buy goods or choose where to work than say that are not’. People want to work for organisations that can demonstrate a commitment to shared common goals, culture and behaviours. According to The Maitland Values Project: ‘Organisations develop a personality based on shared beliefs and that these are shaped by the founder or leader’, so the role of leadership is crucial.

Talent acquisition teams sometimes use objective-based recruitment campaigns. This involves relying on a unified vision of why the company exists and how it intends to fulfil its mission. The concept of a shared purpose is underpinned by these values.

It’s not just employees who benefit from the values of a company. Clients and customers are attracted to the behaviours organisations nurture. For instance, by fostering a culture of empathy, employers could be helping business: 49% of customers are seeking more empathy from customer support agents (Zendesk).

What happens if we don’t have company values?

Company culture is something that evolves according to environmental influence. It is with stated values that it evolves with some semblance of a guiding force, which can be attributed to good leadership and being clear in communicating company values. Without good leadership, company culture could thrive on its own, which may not lead to desirable outcomes!

Imagine an organisation with no values, or at least a lack of desire or commitment to demonstrating those it already has. A business may suffer a deteriorating culture, where behaviours illustrate a toxic working environment, and staff turnover is high. The knock-on effects can be debilitating: Company culture has suffered in 63% of UK businesses as a result of high staff turnover, and high staff turnover has led to 23% of businesses receiving complaints from remaining team members about a change in company culture.

The toxic work culture may manifest itself so clearly that an organisation begins to leak insincerity, where clients and customers notice a deviation or lack of values as much as employees.

We paint a harsh picture of what having no values looks like because it’s a significant topic. Without core values, and without a commitment to them from a leadership position, employers could lose employees and customers (or at least their trust). Let’s look at how to create values for your company that may help to avoid this scenario.

Create values that align with actions

We recommend employers carefully consider their core values, and not simply copy and paste them from other business websites. Certainly use them as inspiration, but a genuine set of company values comes from the heart, as described by Integrity Coaching: ‘Values-based leadership is when leaders draw on their own core values and the negotiated and defined values of the work organisation for guidance and motivation.’

With this in mind, consider behaviours rather than abstract ideas. These may be behaviours employers want to engender such as curiosity, empathy, awareness and active listening. Leaders may ask themselves what motivated them to start or join the company, and then lean on these thoughts to help outline values that match actions. For instance, what do leaders want the business to achieve? What behaviours might be useful in reaching this goal?

Also, ask the workforce what they think via a staff survey, and don’t be shy about asking clients or customers too. 54% of customers want to buy from companies that prioritise diversity, equity and inclusion in their communities and workplaces, which may never be revealed if no one asks.

Once there's an outline, refine the values and make them clear and easy to understand. Avoid vagueness or ambiguity. Try not to have too many, and be mindful that they may evolve, adapting according to how the organisation changes.

(Is a mission statement the same thing?)

Mission statements are great for illustrating why a company exists (its purpose) and how it intends to fulfil its business objectives. They’re usually short and sweet, like this example from the NHS. They can be long and unwieldy, like this from the BBC. Both examples offer clear outlines as to what their purpose is.

What makes a good mission statement is open to interpretation. Some may be concise and to the point, while others may contain elements of company values. We suggest keeping things simple. Have a clear business vision, a mission statement that outlines why the business exists and how it intends to help customers, and separate values to illustrate those behaviours considered crucial to achieving all of the above.

Who’s responsible for maintaining core values?

While we believe it is the responsibility of an organisation’s leader to come up with the values of a company, it takes a team to realise the dream! So yes, everyone has a part to play in living by the company values created by the leadership team. This means they have to be visible and often repeated. It also means leaders and leadership teams should embody the values and lead by example.

Designing an outline and simply leaving it on the table may not be the best strategy. Shaping company culture takes time and dedication, and requires frequent assessment of progress and evolution. An independent consultant could be hired from time to time, to see how effective company values are. An in-house progress strategy for measuring and maintaining progress may also work.

Reinforce desired behaviours 

The key is in doing whatever it takes to make sure the values for the company reinforce desired behaviours. An HR study found that 100% of leaders in companies had values but only 11% had thought through the values into desired behaviours. This underlines the significance of having values and living them.

If there's uncertainty about how to go about reinforcing the values of the company, consider this quote courtesy of Reception UK: ‘From the content you share on social media, the interactions you have with your customers, the application process candidates go through; onboarding; training; appraisals: every touchpoint is a chance to communicate those values.’So, from a leadership perspective, it’s crucial to have company values to build culture and underpin vision and mission statements. Values carry benefits across businesses, from reducing churn to aligning with a common purpose, which helps organisation achieve goals. In 2020, Glassdoor published a list of 14 companies that have the best cultures and values in the UK. While it’s compiled based on ratings, it’s still highly subjective. However, if jobseekers are looking at it and wondering where they should work that reflects their personal values, leaders may find it useful too.