The key to profitability is to have an aligned workforce, one where each employee has a clear sense of the company’s vision and direction and where everyone is “rowing the boat in the same direction.” One way to achieve this common purpose is to create a set of core values for your company and then select and reward employees who believe in those values.
Having people who fit into your organization is far more important than talent or skill. Many people are talented and most people can learn new skills. Having people who believe in the organization and the company values will go a along way toward building a company that will please your customers and outperform your competition. It’s all about culture: the way we do things around here.
THE EVIDENCE
An article in the Harvard Management Update in 2008 reported that 91 percent of 1,200 senior executives at global companies surveyed agreed that culture is as important as strategy for business success. And consider what Scott Kingdom, the global managing director of Korn/Ferry International, has to say about the importance of culture: “If executives fail, they don’t fail because of business skills, but soft skills and cultural skills.” Tony Hsieh, CEO of Zappos, now owned by Amazon, puts it this way, “We believe your company culture and your company brand are just two sides of the same coin … your culture is your brand.”
Renown university researchers Kotter, Heskett, Ulrich, Zenger, and Smallwood report that employees “buy into” the company’s corporate culture, and companies that align and manage their cultures increase revenue by four times and increase stock prices by 12 times over those companies that don’t manage their cultures.
Leading world-class organizations have cultures that are driven by core values. The Blue Angels, the world’s No. 1 flight demonstration team, has a culture driven by five core values: trust, respect, accountability, integrity, and commitment. And consider the driving values of these winning companies: Southwest Airlines — fun, Nordstrom — customer service, Ben & Jerry’s — giving back to the community. And consider the many other successful companies that have strong values-driven cultures: Starbucks, Harley-Davidson, IKEA, Trader Joe’s, and many more.
HOW TO BUILD A VALUES-DRIVEN CULTURE
There is a four-step process you can follow to align your workforce around a set of core values. In each step, small teams of employees are empowered to gather information from other employees to select the values, define them, translate them into behaviors, and create an innovative communication and implementation plan to ensure the new values-driven culture will sustain over time.
Step 1: Create a set of common values. Values are principles or beliefs that determine our actions. Honest people, for example, do honest things. Where do company values come from? They come from everyone in the company. While the final decision about the core values is up to the owner, the CEO, or the key principals in the company, they must consider input from everyone through surveys, focus groups, town hall meetings, etc., to ensure “buy-in” and acceptance of the final set of values.
Step 2: Define each value for your company. Each company is unique. Integrity, for example, may be defined differently for a software company (“we only use licensed software”) than it is for a building contractor (“we do what we say”).
Step 3: Translate the values into appropriate expected behaviors (actions). This step is to “take the values off the wall and put them into the halls.” Having a set of values defined and posted without setting behavior expectations is a waste of time. Posted values become wallpaper and unnoticed in a few short days. The values must be converted into behaviors that are expected of everyone in the organization. For example, for the value of respect, there may be two expected behaviors: (1) We reply to voicemails and e-mails within 24 hours to both internal and external customers, (2) We take care of company tools as if they were our own.
Step 4: Create and implement a communications/sustainability program. Warning: Changing a company culture is time consuming. To ensure the new values-driven culture sticks, you will need to be diligent. People don’t like change. To overcome resistance requires a campaign to keep the new values and expected behaviors at the forefront of everyone’s mind. Events, reward programs for “catching people doing things right,” visuals, newsletters, e-mail blasts, blogs, etc., are all communications methods that can help to sustain any new program requiring people to do things in new ways.
THE BENEFITS
A values-driven company culture will help you select and keep good employees, achieve higher morale, increase productivity, and gain greater customer satisfaction. The bottom line will be greater profits.
