Company values = useless?

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Estimated read time: 5 min

Something that's stood out to me in researching hundreds of companies is -  at least from the outside - how useless company values are. 

It seems like it's something companies feel like they have to have but aren't really sure what, how, or why. 

Let's explore 3 reasons why they're useless and how to fix them. 

Company values are usually a list of 5-6 words. And, often, that's all they are: a single word.

Problematically, there are literally hundreds of different things one could mean by a single word. Take "innovation" for example. Innovation ... how? when? over what? with who? in what capacity? When a word could mean anything, it subsequently means nothing. It fails to meaningfully guide anyone. 

It's like calling someone "nice." You know, the vague complement you give when you don't really know someone; the one that almost seems like a descriptor you'd use when you actually don't really like them.

"Oh, their company values? Yeah, they're ... nice." 

This one kills me. 

A 2015 paper looked at Fortune 100 companies' values list and found: 

• 58% of them included "respect"

• 39% of them included "integrity" 

(Fun fact: 1 of Enron's 5 values? Integrity.)

It's like company CEO's are reliving the 6th grade exam experience - where they subtly peek at their classmate's desks and whisper, "what'd you put for #4 ... respect? cool, cool, yeah, uhh, same here ..."

And because I lead a riveting life, I decided to analyze the value sets for 6 top New York City health systems. Here's what I found (duh duh): 

The takeaway? These 6 organizations essentially cycled through the same 7 words!

Integrity, teamwork, excellence, and respect ... for the win! Clank. 

Let's all give a round of applause to Mount Sinai, though, who only had 2 values in common. One might argue the presence of "creativity" on their value list is, in fact, a stroke of creative genius. 

As an outsider, though, these aren't even remotely useful to try to differentiate among companies and I can't imagine they're all that inspiring for current employees.  

Speaking of inspiring, not only are they vague and similar, they're boring AF. 

Is there anything safer than coming up with a list of words like respect and integrity? 

There's a lack of edginess to company values. I guess it's what emerges from the intersection of HR control and consensus-based decision-making. 

These words are penny slots. There's very limited downside. Too little, in fact. There's no trade-off here. They don't really take a stance on how the company ought to operate. 

It's like coming up with a strategy of "grow!". Um, sure, great outcome but that's not really saying anything about how to do so. Useless. 

Now that's that's out of the way, let's take a look at what you can do to turn your values into something more meaningful: 

Step 1 - Get crystal clear on what company "values" are

Step 2 - Design them with 4 key elements in mind - specificity, differentiation, disagreeability, and "the why"

Step 3 - Operationalize the sh*t out of them

Quick run-through on these 3 steps: 

Employees are faced with an infinite number of situations, variables, possibilities, and decisions each day.

A set of values are - or at least ought to be - useful code that helps orient people how to think and act. 

Companies have ways of operating. Values should both inform and describe those ways. I actually think the following words convey that essence more accurately than values: 

• guidelines (maybe too weak)

• principles (Ray Dalio agrees for whatever that's worth)

• orientations (legit but might be confused for the onboarding process)

• directives (perhaps too command-and-control)

Let's go with principles. 

With that definition in place, then, it's still obvious that vague, undifferentiated, and lame words like "performance" and "innovation" simply don't serve as useful principles. 

In addition to Principles = how people should think and act, here's how I define the other key words of a company's manifesto:

• Mission - why does your company exist?

• Vision - what is your company's north star?

• Strategy - how will you company overcome its critical challenges?

Now t's time to design them with, basically, the antithesis to what I wrote above. They need to: 

• be specific enough to help people see situations, make decisions, and take actions

• be differentiated enough so as to give the company a distinct "feel"

• be disagreeable enough so that there's actually a cost or trade-off to them; you can't attract or please everyone

• contain a clear "why?" since the why is likely to serve as the true guide

At the end of the day, all we're looking at is a set of words on a page.

Whether or not principles serve as a useful compass for employees will depend on the degree to which they're embedded, operationalized, and breathed day-in-day-out. 

Some effective examples of operationalizing:

• ensuring all employees know them inside-and-out

• performance is graded on - at least partially - the degree to which they're consistently embodied

• recognition is handed out based on their embodiment

• stories emphasizing specific examples are widely shared

Companies need to uphold these principles, model them, story-tell them, and judge based on them, otherwise they just become limp rhetoric; more style over substance.

• When should they first be created and by who ... a founder(s) on day one? After you have X employees or customers?

• How often should they be adjusted? Never? What about when a new CEO comes in? Or is it "engrained" into the company DNA and new leaders inherit them?

• If they are adjusted, well, what's the process ... should it be democratic? Decided by 5 executives on a retreat? By just the CEO?

• While these principles serve to convey how the company seeks to/should operate, what about if the reality of how it operates is way off? What then .. acknowledge or nah? If so, how to acknowledge and bridge that gap?

• What new or creative ways might companies take to better operationalize their principles?

Do what's most impactful  - the biggest challenge is what to work on; continuously assess and focus on the activities that drive the most value 

Understand where someone is coming from - you don't have to agree, but at least be able to articulate another's point of view

Continuously learn and improve - individuals and teams must continually grow their capabilities through an execute -> learn -> execute approach

Imagine customers at the table - we only exist because customers demand what we have to offer so make every decision with them in mind

Serious work in a light-hearted way - fear destroys a work environment; levity creates the conditions for new ideas and peak performance 

Name "elephants" - most challenges are inter-personal challenges; call out the reality of what's in front of you so you can deal with and harness it 

How would you design yours? Please share!

Bite-sized asks:

1. Dig it? Forward to a friend / colleague ... it only takes 20 seconds.

2. Reply to let me know what resonated most.

-Phil