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Why are company values important?

Updated: May 30, 2023


Why are company values important?

If I asked you to honestly answer the question, what are your company values, what would you say? Are they all in your head? Do you just feel like people get your values because of how your company works or truthfully are company values just something you've never even thought about? If company values are not really something that you've ever thought about I'm sure you're not alone, but they're an important cornerstone to support growing the company culture that you want so should definitely be on your radar.


According to a recent survey by People Management, nearly two-thirds of Gen-Z employees surveyed were considering leaving their organisations in the next 12 months because their employer doesn't share their values. Obviously, there will be other factors impacting on why employees are looking to leave their roles but this study really shines a light on how important it is to have company values.


What are company values?


The textbook definition of company values, or at least the one I was always taught roughly comes down to this;


"the set of guiding principles and fundamental beliefs that help a group of people function together as a team and work toward a common business goal".


According to the Harvard Business Review;


"Core values are the deeply ingrained principles that guide all of a company’s actions; they serve as its cultural cornerstones".


It's important not to get your values confused with your vision and mission. Your values don't necessarily have to be unique but they need to resonate with your business and your employees and it's important that everyone has a really clear understanding of what the words you use to describe your values actually mean to you as a business. You could express your company values in simple words, with an explanation behind them, or as more complex statements. Examples of company values could be;

  • Simplicity

  • Trust

  • Honesty

  • Ownership

  • Innovation

Obviously, that's not an exhaustive list! Tap HR's company values as an example are;

  1. Authenticity

  2. Constantly Developing

  3. Transparency

  4. Supporting Others

You can see an example of Google's company values here https://about.google/philosophy/ , Amazon's company values and leadership principles are here https://www.aboutamazon.com/about-us and Apple's shared values are here https://www.apple.com/careers/uk/shared-values.html


Why should you have them?


Essentially having values gives employees a sense of purpose, a clear understanding of who you are as a business and helps to create community and nurture your organisational culture. A sense of purpose and belonging is crucial to employee engagement and goes way beyond just giving an employee a job description or telling them what to do.


How many company values should I have?


Whilst there's no science to answering this question, I'd always recommend that you don't have so many that it's too hard for employees to remember them or that would make it difficult for you to display your values in a meaningful way. Whilst it's great to be values-led, if you have so many values that people can't remember them it sort of misses the point of having them in the first place!


Does it really make a difference?


Obviously I'm slightly biased in writing this article but yes! Having a clear set of company values helps employees understand what you stand for as a business, how you work and how you'll make decisions. Research has shown companies with real, lived company values see an increase in their employee retention and engagement. They can also help impact attracting great candidates as companies who are clear on who they are and what they stand for will be more attractive to potential candidates. Clearly, just having company values isnt going to make you the most amazing business in the world, you need to be good at what you do and business savvy but having company values adds to the pot.


How do I start thinking about creating company values?


What you shouldn't do is string together an insincere bunch of words because you read an article saying values are important. It's really important that your values are authentic to your business and how you operate. Think about the kind of business you want to be, what's important in the way you operate, how you want your people to be able to work and what matters in the way you work with your customers and stakeholders. What you come up with might well be similar to others, or it might be really different, but just ensure you're being true to you.


I'd also always advise that you don't come up with values in isolation. Yes, it's really important that your values resonate with your business, but if you just announce to your staff that you've got a new set of company values they're likely to fall flat. A quote that I read back in the day when I was studying has stuck with me for the rest of my career "People support what they help to create". Whether you've got a general idea of what you think your values should be or not, get your people involved in creating your values. It's really helpful to also flesh out what words mean as one person's definition of trust, for example, can be really different to another.


What do I do once I have company values?


The short answer here is, don't forget about them! I've seen so many companies spend time crafting company values then after all their hard work sticking them in a drawer and forgetting about them. Your values should underpin everything you do as a business, they should be part of your recruitment process, your appraisal process, your decision-making process, literally everything you do. I'm a fan of being very visual with values so make sure they're displayed but more importantly make sure they are lived through your people and your leaders. Some companies do a really good job of rewarding people for demonstrating their company values and doing things like having employee awards to recognise people living the values.


Want some help with crafting your values?


We love helping businesses so if you want some help with crafting your company values get in touch!


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Disclaimer

  • All information within the post is provided for guidance only; always seek your own legal advice.

  • The information with this post was correct at the time of publishing, March 2023 but may be subject to change.


References





Human Resources Management (2008), 7th Edition, Torrington, D, Hall, L and Taylor, S, Pearson Education

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