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Companies are always trying to find the new competitive advantage. The last couple of years (and maybe decades) the focus has been on creating the right culture. Values lay at the foundation of culture, so let’s discuss values for a minute: why are they so important?

Values form the basis of our individual belief system. Everything we think, say, or do, has certain roots in what we believe and what our values are. We are all brought up with certain values that have been taught to us by our surroundings. It is therefore not surprising that our values can widely differ from person to person, dependent on where you come from. This makes us stand out from the crowd. Organisations are now doing the same to gain a competitive advantage and standing out from the crowd, by creating organisational values. The organisational values have an internal function by guiding employees in their everyday work on how to approach their work and an external value by showing what the organisation aims to stand for, from a branding point of view. So, in short, having values creates value.

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What are organisational values?

Organisational values are a set of written and unwritten guidelines, ideas, and principles which prescribe how people should behave and what the organisation aims to stand for. They are part of an organisational culture and often prescribe what is meant by the phrase “this is how we do things here”. Although different departments and teams might uphold different internal values in comparison to the rest of the company, the core of their value system should always be connected to your organisational values. You can see your organisational values as a tree: the foundation rests in the ground, which is the business, the reason the organisation and its values exist in the first place. The trunk of the tree are your organisational values, that which connects everybody within the company and how they approach their work. The branches are the individual sets of value systems over different departments and teams, which find their origin in the organisational values.

Organisational values can be steered partially, but it is important to note that they organically grow over time with the influence of the value systems of your individual employees and teams. Trying to understand or even influence your organisational values is therefore both a top-down as well as a bottom-up process.

Now that we have a broad understanding of what organisational values are, lets discuss what kind of business value or competitive advantage you can gain from focussing your organisational values.  I will do this by taking three organisational values of Google as an example. Quick note however, if you still believe that values are these singular nouns, then I hate to break it to you, but those are useless. According to Simon Sinek, values should be actionable, or at least verbs, because they are something to live by and act upon. Read more about what makes good organizational values and what makes bad organisational values here. So, let’s look at three actionable values of Google:

  1. Focus on the user and all else will follow.
  2. You can make money without doing evil.
  3. Great just isn’t good enough.

The first value explains that Google has a clear focus on the people that use their applications. The sixth value shows a certain moral code to do good and the tenth shows a commitment to go above and beyond. So now the question remains: how can organisational values create business value?

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Internal business value

Culture and guidance

One way organisational values can help you to create business values is by reinforcing your internal culture and to guide your employees in how to approach their work. They should be able to identify themselves with your values and keep them in the back of their mind whenever they make a decision, approach a problem, or are in contact with a customer. For example, let’s say your organisational values express that you only want the very best for your customers. One of your employees is faced with a customer problem and can choose between a solution that solves the problem perfectly, but is more expensive or more difficult, and a solution which partly solves the problem, but is cheaper or easier to implement. According to your organisational values, the solution should be clear. Look at Google’s tenth value. They strongly express a value to go above and beyond. A reasonable solution or even great solution could solve the problem, but Google wants to go further. They motivate their staff to actively go above and beyond.

Self-identification

Another way of creating business value from your organisational values is by aligning them with the personal values of your employees. As mentioned before, organisational values are partly a product of the personal values of your employees. Therefore, you should highlight and emphasize the organisational values which are most shared amongst your employees. This way your employees can identify themselves with your company and feel more as a part of a team who is driven by the same motivations and values as the motivations and values which drive them personally. Google’s sixth organisational value is a very good example for all you altruists out there. If you personally believe that you should do good in life, it is a motivating idea that you can identify yourself with the fact that your employer supports that view.

Sense of belonging

In the same line as Self-identification, organisational values can also create a strong sense of belonging. Sharing the same set of values with other humans creates a bond. You most likely surround yourself with friends that have roughly the same set of life values as you yourself have. People bond over values, creating a sense of belonging to a group. The same counts for organisational values. Having the same values as your colleagues creates a bond and a sense of belonging towards something bigger than themselves: a team, an organisation, a mission, and a vision. Organisational values are paramount into creating a sense of belonging which enables your employees to be their best version of themselves because they strive to achieve a goal bigger than themselves with which they can identify and for which they are willing to go the extra mile.

Peops relations, Recruitment, Recruiting, HR, Human Resources, People Operations, PeOps, Peops Relations

External business value

Customer perception and branding

Organisational values do not only create internal business value, but also external business value. Showing what you stand for, as an organisation, creates a sense of personalization and recognition with your customers or an argument for why your company should be chosen over any competitors. Not surprisingly, it is therefore important for your brand to adhere to a set of values with which your customers can identify with or that they approve of. Google’s very first value is a good example of a value that customers can approve of, as it emphasises a focus on clients above anything else. On the other hand, Google’s sixth value is a good example with what external people personally can identify with. Intentional or not, this shows that Google is aware of the importance of aligning organisational values with personal values.

In conclusion

Organisational values are important to allow your employees to identify better with your company and thus getting more motivated to work there. Besides that, the values can also provide a sense of direction and contribute directly towards creating a culture and a sense of unity. Organisational values do not only create internal business value. If shaped and exercised correctly they can also create external business value by convincing the customer to choose your company over the competitors by standing out from the crowd. This is not necessarily a bad thing or a business trick, in the end you need to live up to your values to retain your customers. A society where customers buy more responsibly motivates producers who produce more responsibly, creating a better society as a whole.

In sum, your organisational values create the personality of your organisation with which internal and external stakeholders can identify with. If you want to win the hearts and minds of your customers and employees, then everybody within the company has to live by the values. Then, and only then, can you create an authentic brand and a strong internal culture-

If you want to find out more on how to create proper organisational values, read this blog here. If you want to read more about the importance of corporate values, read this article from Harvard Business Review or this article from Forbes, on the importance of corporate values.

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