The importance of company core values
Strong company values are more important than ever. A business’ culture emerges as a result of its company values, impacting everything from the company’s staff retention to its bottom line. Consumers are increasingly concerned with the company values of the businesses they buy from, putting the pressure on giants like Ford, Disney and Starbucks to create social and environmental initiatives and leading to the growing popularity of brands like Burt’s Bees and Patagonia.
As a result, the importance of company core values cannot be overstated in any conversation on how to run a successful business. Strong company core values can help you reach younger audiences, enter new markets and continue to innovate and grow your business. Take action now and commit to cultivating your company values into every facet of your work, and you’ll develop the massive action plan you need to take your business to the next level.
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What are the core values of a company?
Company core values also referred to as corporate core values, are the fundamental principles or philosophies that guide an organization’s business decisions. Rather than a set of rules, company core values are more akin to a mission statement by which the business prioritizes its values as they play out in the market. When formed and implemented properly, company values govern everything from internal affairs to external consumer relations.
Importance of company core values
What is the importance of company core values? Forbes reports that more than half of executives agree that business core values influence all aspects of a business, including employee happiness and customer acquisition.
Company values and employee retention
Entrepreneur reports a powerful statistic on the impact of company core values on staff turnover: When a business’ core values fail to create a rich company culture, turnover spikes from just 14% to a whopping 48%. Company values create the intangible culture that defines your company, for better or for worse.
Company culture is about much more than giving employees flex-time or having weekly happy hours. A strong organizational culture must be built on a solid foundation made up of company core values that are explained and embraced by all those who work for the business. These values dictate everything from how the team communicates with each other and the customers to how they implement and promote innovation in the workplace. When values are strong and modeled from the top-down, creativity blooms and customers take notice.
On the other hand, when core values are weak, confusing or missing from a company completely, employees and managers alike are left in the dark. They aren’t sure what’s expected of them and often do things that damage the company. This also poses a challenge for HR as they don’t have guidelines on how to hire superstars and are at risk of putting together a team that will fight each other over every decision.
Company values and profitability
Strong company values don’t just create happy employees – they can actually bring you customers. In today’s market, consumers are taking the time to research and buy from companies that are socially responsible.
From Nike’s sweatshop scandal in the 1990s to the Volkswagen emissions scandal in 2015, social and environmental responsibility has long been front-page news. But as globalization and the internet democratize the flow of information around the world, the market is more connected than ever – and consumers are more concerned with company values.
Now, with digital native generations becoming the largest consumer segment, responsible company core values are not only a question of doing the right thing – they’re a question of profits. One study found that 70% of consumers want to know how the brands they support address social and environmental issues. If they don’t like the answer, they may direct their dollars elsewhere.
Given the importance of company core values for the day-to-day viability of your business, the importance of company core values emerges as a tool for fine-tuning the direction in which your business is going. By taking care to establish transparent core values that genuinely reflect their team and product, businesses are able to resonate with consumers and staff alike.
Companies with strong core values
All around us are examples of executives who have done their due diligence in developing solid company core values and incorporating them into their day-to-day operations. These are the companies that stood the test of time, established customer loyalty and have turned their employees into raving fans who can’t stop talking about their employer.
These entrepreneurs know their company core values have to reflect their company’s vision and personality. They also understand that powerful company values demonstrate the relationship between a business’ mission and its product. Here are some examples of business owners who have built an empire on strong values.
- SoulCycle founder Melanie Whelan created SoulCycle’s company core values to include an innovative workout culture and a tailored hiring process. Her efforts were met with success, and SoulCycle is now well known for its ability to attract loyal customers as well as staff.
- Airbnb co-founders Joe Gebbia and Brian Chesky recognized the vitality of company core values in re-launching their business a number of times. Now, due to its diligence, Airbnb is one of the most recognized brands in the travel industry.
- Shake Shack founder Danny Meyer created a world-class company culture demonstrative of the firm’s core values. Shake Shack is now nationally recognized not just for its product, but for its hospitality too.
- Adidas CEO Kasper Rorsted oversees a global brand whose product embodies the company’s corporate core values. The firm employs the “3 C’s” – confidence, collaboration and creativity – to reach its mission of “being the best sports company in the world.” Adidas is a brand heralded for its sustainably-produced footwear and athletic apparel. Judging from Adidas’ numbers – the corporation has sold over 900 million units worldwide – its strategy is successful.
- Ben & Jerry’s CEO Matthew McCarthy oversees a brand whose core values are woven into a three-part mission: To have a sustainable impact through sound financial practices, equitable social investments and a product that sells itself. Ben & Jerry’s incorporates these values at each step of the production process.
Examples of company values
Having trouble answering “What are core values of a company?” Strong company core values often start with these principles.
1. Standardizing excellence
Use your business core values to shape a culture of excellence and respect. With consistency, excellence becomes standard practice for your company. Your reputation will follow suit.
2. Prioritizing relationships
When you prioritize relationships, it shows in every facet of your company. Before you make any business decision, think about what impact it will have on your customer and team.
3. Treating people well
Businesses are like humans, so emotional intelligence is key. When you treat your team well, they’re able to treat your clients in kind, which creates the ultimate customer experience.
4. Adapting to meet your needs
5. What you see is what you get
When you’re above-board about everything your company is doing, you gain the trust of your customers and team. Implement transparency at all levels of your business – your operations, sales procedures and company culture.
6. Valuing what you value
In today’s global markets, customers are increasingly aware of companies’ ethics. Research and embrace your target market’s priority ethics to create impactful company core values.
7. A viable financial model
A company whose economic mission is sustainable demonstrates its commitment to longevity. Convey in word and deed that your financial model is viable.
8. Being obsessed
When you’ve devoted a singular obsession to creating your product, your enthusiasm is infectious. With a world-class marketing strategy in place, the fruit of your obsession adds real value for your customers.
Selecting company values that resonate
Company values are closely aligned with your vision statement and your business map. They must also align with the company’s actual day-to-day practices. Values that do not represent the experience of employees and customers can actually be toxic and destructive. When a company’s values are not readily apparent in everything the business does, cynicism quickly sets in among staff and clientele, poisoning the company’s reputation from the inside out.
The impact of a company’s alignment with its value system is so pivotal, experts assert that it may be better to skip articulating your values if you don’t intend to stick to them. So, as you work to nail down your company core values, prioritize authenticity and understand that company values are meant to inspire employees into action versus punish them.
Look through the list above of great company core values to have. Which speak to you? Which describe the company you are building or want to build? What is the vision you had when you first decided to become an entrepreneur? It’s likely that picturing this will help you narrow down the values that are most important to you. After that, it’s just a matter of articulating them and creating a massive action plan around implementing them.
How to use company core values to grow your business
The influence of company values on your company’s success is so substantial you must learn to manage values effectively. With the right approach, you can leverage your business core values so that they contribute to your business’ growth.
1. Align employees and management around company values
For a business to be successful, it is absolutely essential that employees and management share the same company core values. Make sure that all your training materials and marketing materials express the same message regarding your values.
2. Hand-pick your company core values
As a small business owner, you must be careful to choose company values that are both authentic and expressible. If you’re unable to live up to the values you espouse, you risk turning off your market due to your inconsistency.
3. Find a mentor for building company values into your business operations
To better understand the importance of company core values, let’s consider Zappos as an example. Zappos is a company well-known for intentionally cultivating its (zany, creative) corporate culture to attract and retain committed staff and raving fans. To create its company culture, Zappos developed 10 core values (including “create fun and a little weirdness”), which it then incorporated into everything from staff job descriptions to hiring protocol to on-the-job training. By creating a value-based method of operations that’s obvious to everyone engaged with the company, Zappos now enjoys record success.
4. Find inspiration to transform your company core values
Few people understand the importance of company values as well as Tony Robbins’ Business Mastery panel guests, all of whom have walked the gauntlet of launching and managing a successful business. Look to the experts to uncover how to manage core values so that they propel your company in the right direction.
5. Incorporate social and environmental responsibility
Many executives are catching on to the benefits of corporate social responsibility (CSR). It can enhance your reputation, increase employee loyalty, attract better talent to your company and help you capture new audiences with positive public relations. While these initiatives cost more to implement in the short-term, they may lead to long-term success, especially as consumers demand CSR as part of company values.
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