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Jul 30, 2020

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Company Values: Definition, Importance and Examples

Having clear company values helps you ensure that all your employees are working towards the same goals. Your core values support the company's...

Company values: Definition and importance

Having clear company values helps you ensure that all your employees are working towards the same goals. Your core values support the company's vision and shape its culture. That's why every single business decision should be aligned with these values.

A business without core values isn't really a business. How can you build great teams, deliver an excellent customer service and foster innovation if you haven't defined and shared your company values with your employees?

💡Download our eBook "10 Principles of Modern Employee Communications" and learn how to communicate with the modern employee in today's digital age.

Your core company values shape your company culture and impact your business strategy. They help you create a purpose, improve team cohesion, and create a sense of commitment in the workplace.

company values: definition and key principles

Unsurprisingly, your company values also play a critical role in talent attraction: 46% of job seekers cite company culture as very important when choosing to apply to a company.

You're probably familiar with the concept of hiring for cultural fit. But to hire the "right talent", you need to define the company values you stand for and make sure that the candidate you're about to hire shares the same values.

In other words, building a strong business starts with building a company culture that reflects your core values

Company Values: Definition and Principles 

In essence, your company values are the beliefs, philosophies, and principles that drive your business. They impact the employee experience you deliver as well as the relationship you develop with your customers, partners, and shareholders. 

Your company values are your company's DNA and they help you differentiate your business from the competition. That's why you can't make any important business decisions without having them in mind. 

However, having company values doesn't mean having a polished communication plan around nice values and principles.

You have to truly honor your company values in everything you do and set the right example for your employees. It's the only way you can build trust in the workplace. Don't ask your employees to follow the company values you've set for your business if you don't follow and integrate them into your daily work in the first place. 

Your Company Values Are the Heartbeat of Your Business

Because your company values reflect what you and your employees stand for, they give them a sense of responsibility. Indeed, every decision your employees make should be aligned with the company values you've communicated with them.

Each of your employees — from top leadership to entry-level — becomes accountable for those decisions by asking a simple question: does this decision reflect our values?

key statistics on company valuesBut most importantly, your core company values drive your business and help everyone in the organization reach the goals you've set for the company. As mentioned earlier, your company values are your company's DNA and they help you differentiate your business from the competition. 

The bottom line is that your core values impact all the aspects of your business, from the product your teams develop to your sales and marketing strategies or the customer service your employees deliver.

As the image below shows, company values help boost employee motivation, morale, employee advocacy, and they provide guidance and security in the workplace.

company values definition and how to develop them

Defining Your Core Company Values

During the first years of Smarp’s existence, we did not have any written company values. To be honest, we did not really see the benefit at the time we saw them as something large organizations have to create a positive image of themselves, without adding any real value.

We were a small team, sitting in one room, day to day, working on getting our next client, improving our product and gathering feedback from existing clients on what we could improve. 

 

What we did not realize at the time was that we actually did have company values, just not on paper. The values were the result of our work together and the way our thoughts met during our informal discussions.

This made us work effectively together by enabling each of us to make aligned decisions independently.

7 Ways Company Values Drive Business Success

As mentioned above, your company values play an essential role in your business.

Without them, it's almost impossible to align your employees with your strategic goals, enhance team collaboration, or empower your employees. And here's why 👇

seven-reasons-why-your-company-values-are-important

 

1. Your company values help your employees make the right decisions

Having a clear set of values helps your employees understand what you stand for. Your company values also give them guidance for their work and a sense of security. 

As a result, your employees are more likely to make the right decisions  — the decisions that help them achieve the company's vision and goals. And that's because they understand the company's mission statement, share the values that you stand for, and believe in your brand.

What's more, having a set of well-defined company values provides a moral direction to guide employees in difficult times. In a volatile environment of rapid technological, environmental, and societal changes, it’s a much-needed constant.

But to help your employees make the right decisions, you need to set the right company values, the ones that reflect what you stand for. That's why Simon Sinek explains in his book "Start With Why" that you need to communicate with your employees why your company exists, what your mission statement is, and what beliefs you stand for.

2. They help you improve your employee communications

Employee communication plays an extremely important role in building a better company culture, improving employee satisfaction, and increasing employee engagement. 

The thing is, when employers don't have clear company values, their communications with their employees are usually inconsistent and unclear. This often leads to confusion in the workplace. 

Read on: Top 5 Communication Skills and How to Improve Them

With clear company values, you can significantly improve employee communications at your workplace, and help your employees live by those values. 

company values and employee communications infographic

3. They have a direct impact on employee motivation and engagement

When your employee communication is built around your core company values, it helps boost employee motivation and engagement.

Indeed, if you explain your core values to your employees and the reasons why you stand for these specific values, they will have a better understanding of the company goals and will work harder to achieve them. 

Read on: 8 Employee Engagement Statistics You Need to Know in 2020 [INFOGRAPHIC]

Engaged employees are the ones that have clear guidance for achieving their personal goals as well as the company's goals. They have a good understanding of what is expected from them and how to achieve the business goals.

But most importantly, engaged employees are the ones that share your company values and strongly believe in them. If you want your employees to feel more engaged, you need to define your company values and communicate them properly. 

💡Check out top 15 tips to motivate your employees!

4. They help your clients understand what your company stands for

Besides helping your employees to live by your company values, it is extremely important to make sure that your clients understand what your core values are.

Indeed, your company values help you clarify the identity of the brand and educate your clients about what the company stands for.

Having a set of specific and unique core values can be a highly competitive advantage.

Think about it: if you manage to build a relationship with your clients based on the values you share, you're most likely going to strengthen this relationship because it is built on common beliefs and principles

5. They help you attract and retain top talent 

Company values are extremely important when it comes to talent attraction and retention

company values and talent retentionThink about it: most candidates complete extensive research before applying to open roles. They check companies' websites, forums, discussions going on on social media about the companies they are interested in, and they pay particular attention to company reviews.

That's because they don't want to choose the "wrong" company and the same goes for you as an employer — you want to hire the "right" talent.

Check out this short video where Simon Sinek explains why setting strong company values is essential when it comes to attracting top talent 👇

 

Related: Recruitment vs. Talent Acquisition [Infographic Included]

Besides interviewing candidates about their skills and experience, you're going to ask them questions about their values to make sure that they fit your company culture.

If you don't check whether the candidates are a cultural fit during the interview process, you may end up seeing your employee turnover rates drastically increase in the next few months! 

6. They help you attract customers that share the same values

In addition to your customers, potential new clients also care about what your company stands for.

When a company finds out that your values are similar to theirs, you could have a much bigger chance of being chosen over someone else.

For example, if one of your main company values is accountability, you can attract new customers who appreciate accountability and transparency from their vendors. For that reason, it is important to understand who your leads are and what their values are. 

7. They make your marketing and internal comms teams' lives easier

To align their messages, your marketing and internal communications teams need to have a great understanding of your company values. 

To be credible, your internal and external communications have to be consistent. Companies that haven't set clear company values usually struggle with their communications strategies. 

Furthermore, marketing teams that know what the company stands for are much more successful in attracting new qualified leads that convert.

Indeed, you need to make sure that you share the right message with the right audience. If your messages include values that resonate with your target audience's values, you're much more likely to catch their attention. It's all about delivering authentic messages and building trust with your leads.  

15 Company Values Stats You Can't Ignore

As mentioned earlier, your company values have a direct impact on your business's bottom line.

Let's take a look into 15 shocking statistics that show how your company values may impact your ability to attract top talent, the employee experience you deliver, as well as your employees' motivation:

  • More than 50% of CEOs and CFOs say corporate culture influences productivity, creativity, profitability, firm value and growth rates (Forbes)
  • 80% of HR leaders say their organization currently has an employee recognition program (Businesswire)
  • 88% of employees believe a strong company culture is key to business success (Bultin)
  • 47% of active job seekers cite company culture as their driving reason for looking for work (Pivotal Advisors)
  • 76% of employees believe that well-defined business goals help cultivate a positive work culture (Bultin)
  • 15% of job seekers turned down a job offer because of the company's culture (Jobvite)
  • Just 23% of U.S. employees strongly agree that they can apply their organization's values to their work every day (Gallup)
  • Employees who positively view their work-life balance are 10% more likely to stay in their current role (Bultin)
  • 35% of U.S. workers say they would pass on the perfect job if they felt the company culture wasn't a good fit (Robert Half)
  • Employees who don't like their company's culture are 24% more likely to quit their jobs (TINYpulse)
  • 38% of U.S. employees want a job that aligns with their interests and passions (Bultin)
  • 93% of employees would stay at a company longer if it invested in their careers (LinkedIn)
  • 37% of employees consider recognition the most important thing a manager or a company could do to help them be more successful at what they do (Smarp)
  • 89% of HR leaders believe peer feedback and regular check-ins enhance their organizational culture (Businesswire)
  • Actively disengaged employees cause U.S. companies between $450 – $550 billion in lost productivity per year (Zippia)

Examples of Common Company Values

You won't find several companies with the exact same set of values. However, there are some company values we see more often than others. They are employee and customer-centric and they include: 

most common company values

  1. Integrity
  2. Boldness
  3. Honesty
  4. Fairness
  5. Trustworthiness
  6. Accountability
  7. Learning
  8. Customer Experience
  9. Passion
  10. Balance
  11. Fun
  12. Discipline
  13. Humility
  14. Ownership
  15. Result oriented
  16. Constant Improvement
  17. Leadership
  18. Hard work
  19. Diversity
  20. Employee Development
  21. Innovation
  22. Quality
  23. Teamwork
  24. Simplicity
  25. Collaboration and Partnership
  26. Idealism
  27. Courage
  28. Unselfishness
  29. Self-Discipline
  30. Self-Respect

5 Companies with Inspiring Values

Most businesses put a lot of effort and resources into defining and effectively communicating their company values with their employees and their external stakeholders.

I'm proud to share some of our clients' inspiring core values as below: 

KPMG

KPMG's core values

Marriott

Marriott's company values

Valeo 

Valeo: company valuesBDO Australia 

BDO Australia: company values and mission statement

L'Oréal - L'Oréal Foundation

 

How We Set Our Company Values at Smarp

Like most fast-growing companies, we have experienced some growing pains. When we were working on creating a new category, we had no direct benchmark to compare ourselves to.

While our core “employees first” value is still the underlying reason for having values in the first place, we knew we had to be more specific to help our teams make decisions in their everyday work.

Setting values is never easy, as they should reflect the behaviour and decisions of the whole team (and future hires). They are also the unifying component of the company culture especially in a highly diverse company like ours, where our team consists of 20 different nationalities.

After much thought, we set the following values:

1. Take initiative and ownership #GSD
2. Be ambitious and create your own opportunities #FOMO
3. Work smart, work hard #BESMARP
4. Be a team player, collaborate, have fun #COLLABORATE
5. Get out of your comfort zone #NOPAINNOGAIN
6. Be part of the solution #SOLVER

While many of these may seem straightforward, they have implications that need to be accepted before they can have any benefit.

For example, fearing missing out more than fearing failure means that we need to accept that not all things that we do will work.

One example of that was our e-learning product we launched back in 2012, which after two years of development, did not gain enough market traction to be a sustainable business.

It hurts admitting that we had worked tirelessly and put everything we had into something that did not deliver, but the experience made us stronger as a team. If we had not been willing to give up on focusing exclusively on employee advocacy, we would not be where we are today.

Define the Company Values that Empower Your Employees

Your company values should help you support your employees so they can be successful at what they do. It's all about inspiring and empowering them to make their own decisions.

company-values-statisticsWhile at first, we did not see a need for written values, today they are the very thing that makes us who we are.

After all, everything we have accomplished so far has been thanks to our extraordinary team and ability to work effectively together in creating a whole new category with G2.

We wouldn't have been able to achieve that if we hadn't defined the right values in the first place. And by "the right company values", I mean values that truly empower our employees.

All our values as described earlier — #GSD, #FOMO, #BESMARP, #COLLABORATE, #NOPAINNOGAIN, #SOLVER — have been defined to inspire our employees and encourage them to take ownership over their work.

It's okay if a solution implemented by one of the teams doesn't work as well as expected and it's okay to make mistakes all long as you learn from them. You have to trust yourself and be willing to get out of your comfort zone. 

Read on: Empowerment in the Workplace: Definition & Best Practices

The Importance of Communicating Your Core Values 

As mentioned earlier, your core company values affect all aspects of your business.

You should communicate them with your employees but also with your external stakeholders so everyone is on board, from your employees who are willing to go the extra mile for your business to your customers who are proud of being part of your community.

 

But communicating your company values doesn't mean sharing PowerPoint presentations with your employees once in a while or sending out monthly newsletters to your entire workforce to explain what your company values are.

the importance of communicating your company valuesRead on: Interpersonal Communication: Definition, Importance and Must-Have Skills

Instead, your company values should be visible every day at your workplace and they should be an integral part of your internal communication strategy. This is how you can create synergy, create a sense of commitment, and improve employee engagement at your workplace. 

Now Is the Time to Reflect on Your Company Values

The global pandemic has completely disrupted the way businesses are functioning. Shops got closing at a fast pace, teams got scattered across the globe, and layoffs drastically increased ⁠— especially in the airlines, hotel and restaurant industries.

A global crisis such as the coronavirus pandemic is a true test of whether the values companies have been communicating are real or if they are just a part of a polished communication plan.

Indeed, people — including employees tend to question companies' trustworthiness in times of uncertainty and anxiety such as COVID-19.

To build or regain their employees' and customers' trust, businesses are actively assessing their core company values.

"Have we done the right things?", "Did the decisions we made resonate with our company values?", "Did we try our best to empower our employees during these difficult times?", "Are we honoring the values we've been sharing with our employees so far?". 

It's too early to say to what extend COVID-19 is going to change the way companies define and communicate their core values but what's for sure is that the actions they are taking now to strengthen their values will have a direct impact on their ability to (re)gain people's trust and overcome the crisis. 

What's next? Download the eBook “10 Principles of Modern Employee Communications” where we share tips & best practices for successfully communicating with your employees in today's digital age.

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Written by

Roope Heinilä

Roope Heinilä

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