hat sets your company apart from it's competitors?

Is it just the product, or service that you sell?

What about your people, your team? The way you work together, the decisions you make?

For many companies, there is little unique about their team, and the result can be a company that struggles to attract top talent or distinguish itself in the market.

One method that some companies use with great success to turn this around is developing a set of values that defines their people and guides their decisions.

And while a set of company values can have incredible benefits for your business, knowing where to start, and what values to choose can be challenge.

So here are four essentials to be aware of when defining what your company values.

What are company values?

When thinking of company values, it’s easy to reach for a laundry list of buzzwords like:

• Respect
• Integrity
• Teamwork
• Communication
• Innovation
• Customer Service
• Excellence
• Trust

… and so many more. And while none of these words are bad per say, they’re never going to be helpful without truly interrogating what they mean, how they are implemented and why they were chosen.

Company values should never be vague niceties. Company values should be clear, authentic statements that are deeply committed to by everyone, even when it is painful to do so.

Is your company willing to let someone go, or sacrifice profit to hold to its values? If your executives and leaders cannot make this commitment, there is little point to having values at all.

Check out the video below from BambooHR. It's a great example of a company value that isn't just a vague nicety. Instead, the company actively encourages work-life balance as a value, supporting that with a limit on 40 hours for a work week even if that means deadlines get pushed back every now and then.

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What are the benefits of company values?

Creating and implementing a set of company values is no small task. It can be a long and often gruelling exercise, with many rounds of feedback, pushback and revisions. Through all this, it’s helpful to remember why you’re undertaking such a mammoth task, so you can keep your eyes fixed on the light at the end of the tunnel.

So, what are the benefits of clear, well-adopted values?

Team engagement

Engagement - a workforce holy grail. Engagement is a measure of how enthusiastic and connected employees feel to their job and company. 

When employees feel engaged with their organization, they are typically more productive, more satisfied and more innovative. They also have less turnover, less absenteeism and less overtime. 

Employees that know their company’s values, pursue them and see them pursued by those around them are more engaged than those that don’t.

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Real example: “Construction-equipment maker Caterpillar's increased employee engagement resulted in $8.8 million annual savings from decreased attrition, absenteeism and overtime in a European plant, and a $2 million increase in profit plus a 34 percent increase in highly satisfied customers in a start-up plant.”

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Reduce business risks

Accountability, teamwork, a servant’s attitude, and integrity. They sound like great values, right? Unfortunately, just listing them didn’t save Volkswagen from their deeply embarrassing and damaged emissions scandal. Company values that are implemented from top to bottom, without compromise, can help organizations to reduce risks created by their workforce.

Attract new people

Organizations that have clearly articulated values will attract job applicants that admire those values. This is why many organizations will include their values on their website, or in their job listings. This can then further reinforce how the values are played out in the workforce.

Employees become advocates

Employees who are proud of their company’s values can also become vocal advocates for their company, both internally and externally. This natural advocacy is invaluable for the reputation of the organization, and can greatly boost internal satisfaction and engagement.

How to find your company values

No matter what age or stage your organization is in, it is always a good time to stop and identify or review your company’s values and how they are implemented. As a small or young company, you may be defining them for the first time. Or as a growing or established company, you may be realizing that your old values no longer fit, or that everyone has forgotten what they are.

Wherever you are, use the following principles to guide your project as you start.

Assembling your team

As you embark on this exercise, it is critical to have the involvement and investment of the right people in your organization.

Ensure your project team is small, as too many voices can easily slow down the work with competing opinions and busy schedules.

Your project team must include the CEO and any other key executives or individuals who will be instrumental in implementing the final chosen values. Values that are directly contradicted by the words, decisions or actions of the executive team are worse than no values at all.

Understanding different types of values

When identifying company values, author and management consultant Patrick Lencioni makes and important separation between four different kinds of values:

1. “Core values are the deeply ingrained principles that guide all of a company’s actions; they serve as its cultural cornerstones.”
2. “Aspirational values are those that a company needs to succeed in the future but currently lacks.”
3. “Permission-to-play values simply reflect the minimum behavioral and social standards required of any employee.”
4. “Accidental values arise spontaneously without being cultivated by leadership and take hold over time.”

As your team begins to identify potential values for the company, it is critical to identify what kind of values you are actually talking about. You are looking to create core values. These can take inspiration from aspirational and accidental values, but you can never create truly authentic values by simply codifying permission-to-play values.

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Real Example: “A CEO I worked with confused core values with permission-to-play values when he insisted that integrity was a core value of his company. When I asked why, he said, “Because we refuse to hire people who misrepresent themselves on their résumés or who provide inaccurate information about previous employment experience.” I pointed out that while his declaration was no doubt true, most organizations had similar policies. Unless his company was willing to adopt unusually tough measures to demonstrate that it held a higher standard of integrity than most companies, integrity should be classified as a permission-to-play value, not a core one.” - Patrick Lencioni

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Be wary of bottom-up approaches

For an exercise that will ultimately affect the day-to-day of every person at your business, it may seem like common sense to involve everyone in the process, right? You might already be reaching for a company-wide survey with pithy questions like “What’s important to you in our culture?”

Pause, take a deep breath, put the survey down. Surveys and town halls can be deeply detrimental to building the right set of values. 

Why? Several reasons:

1. Surveys are about building consensus. You’re not here to build consensus.
2. Not everyone will have the right values.
3. Capturing and codifying existing values will result in a confusing mix of aspirational, permission-to-play and accidental values.
4. Your people may feel frustrated and ignored if you ask for their opinion, and then don’t “use it”. 
5. The values of your people may be very different to the values of the executives or founders.

Instead, try asking your project team to identify individuals in your organization that show the most valuable behaviors. What do they have in common? What anecdotes about those people stick out, and why?

Use genuine language

When drafting your value statements, ensure they are clear, short and conversational.

As values projects are often delegated to HR, they can too-often fall prey to corporate jargon. The result is that they are confusing and hard for employees to connect with.

Culture Amp’s values are a great example of this. They read:

• “Have the courage to be vulnerable”
• “Learn faster through feedback”
• “Trust people to make decisions”
• “Amplify others”

While each of these values are explained in further detail where necessary, they are all immediately understandable as-is. Compare those values to the laundry list version: Humility, excellence, trust and teamwork. It’s a no-brainer.

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Next step: Implementation

How do you know when you've found the right values? When you're willing make painful sacrifices to maintain those values, you've found what truly represents your company. The process to get there can be long and frustrating, but the results are well and truly worth it.

Once you've nailed down a list, the next step is implementing them across your organization. Wondering where to start? Start with our 6 Tips for Implementing Your Company's Values.