Values are very important, in your personal as well as professional life. However, when trying to build a positive company culture, having overarching corporate values will pave your way to success. Corporate values represent your company internally as well as externally. On the one hand, they serve as a basis for decision-making, orientation, and behavioral standards. Additionally, they aid you in your corporate management.
Looking for a less long-winded answer? Generally speaking, values are characteristics that are important to us and according to which we act. Values are a central element of corporate culture and create orientation for the entire company. In this article, you’ll find out why company values are so important and how to implement and influence then. We’ll also finish off with some helpful examples.
Corporate value definition
So here’s the deal: Corporate values refer to the guiding principles that shape the culture, behavior, and decisions of a company. These values are often considered the core beliefs that define an organization’s identity, purpose, and direction. So far, so good.
Having these values in check does not only create an outline for how your company conducts itself, but also influences how you and your team make decisions. They help to create a common understanding among employees, stakeholders, and customers about what the company stands for and what it aims to achieve. By adhering to these values, companies can build trust, establish a positive reputation, and create a sense of purpose that inspires employees and drives success. Company values can be developed over time, with the help of your team, or with the guidance of an external facilitator and team building solutions.
Why are corporate values so important?
As already mentioned, values create orientation throughout the company and thus have a positive influence on the company’s success. However, corporate values that have been chosen with care not only serve the company, but also each individual employee. If each person in the company acts according to the defined corporate values, they also fulfill their purpose.
Decision-making, orientation, and behavior
How do you make decisions in your private life? Likely, your choices are closely tied to your beliefs and, you guessed it, your values. It’s the same with companies. When faced with a decision, a company with clear and well-defined values can refer back to them and make choices that align with them. These company values also create a standard for behavior, establishing expectations for how employees should carry themselves in the workplace and interact with their colleagues.
Sharing a set of values also strengthens the bond between colleagues. They create a sense of shared purpose and identity, giving employees a common goal and a sense of belonging to something greater than themselves. Without that, a strong company culture will be very hard to build, which will negatively influence engagement and productivity.
Loyalty and trust
Loyalty has to be earned. Having a shared moral code in place, will result in more loyal employees. For them, working for a company that shares their values can be a source of motivation and job satisfaction. They trust in your vision, your journey, and that you don’t screw them over. This, in turn, can lead to increased loyalty and retention, as employees are more likely to stay with a company that they feel a connection to.
However, good company values also make are also important for gaining the loyalty of customers, clients and stakeholders. They are more likely to do business with a company that aligns with their values and beliefs. When a company’s values are clearly communicated and consistently demonstrated, it can build trust and a sense of loyalty among its customers and stakeholders.
Identification
Corporate values create a basis for identification because they help to establish a company’s unique identity and differentiate it from its competitors. When a company’s values are clear and well-defined, they serve as a powerful tool for branding and marketing.
Company values create a sense of identity and purpose within the organization. When a corporation’s values align with an employee’s personal values and beliefs, it creates a sense of belonging and pride in their work. This, in turn, can lead to increased job satisfaction and engagement, as well as a stronger sense of commitment to the organization. In addition, a company’s values can also help to attract like-minded individuals to the organization, creating a diverse and cohesive team of employees who share a common goal and sense of purpose. This can be particularly important in industries where attracting top talent is crucial for success.
Motivation
Bringing up motivation for work can be hard anyway. However, when working for a company that has different values than you, being your most productive self can be even harder. When a company’s values are clear and well-defined, employees are more likely to feel that their work is meaningful and that they are making a positive impact. This way, employees can see how their work contributes to the company’s overall goals and objectives. This sense of purpose can be a powerful motivator, as employees are more likely to feel a sense of accomplishment and satisfaction in their work.
In the same sense, company values can be great to motivate your team when dealing with difficult situations. Here, they can serve as a source of inspiration for employees. When a company’s values are communicated and reinforced consistently, they can help to create a positive and resilient culture that promotes innovation and creativity.
Credibility and image
Corporate values create a basis for credibility and image because they establish a clear set of principles that guide a company’s actions and behavior. When a company’s values align with its actions, it helps to build trust and credibility with stakeholders, including customers, investors, and employees.
For customers, a company’s values can be a powerful factor in their purchasing decisions. When a corporation’s values align with their own, they are more likely to feel a sense of connection and loyalty to the brand. In addition, a company’s values can also be a source of differentiation, helping it to stand out from competitors and establish a unique brand image. For investors, a company’s values can also play a role in their decision-making process. When a company’s values align with their own investment criteria, they are more likely to view the company as a responsible and trustworthy investment.
Influence
As you have probably gathered from the section above, corporate values can have an immense influence on many aspects of your business. However, there are also less obvious areas of your company that can benefit from setting clear company values.
1. Employee leadership
Being a leader is hard. Finding people that are good leaders, is even harder. Having a set of corporate values in place can help you find those employees with great leadership qualities. How? When a company’s values are clear and well-defined, they can serve as a guide for employees at all levels of the organization, including those in leadership positions.
Let us show you an example. We as a company have very strong company values, and it is important that those in leadership positions also represent and enforce them in the team. For us, leaders need great team spirit, a lot of empathy, vision and optimism. With our values in place, we attract exactly those employees that are ready and willing to take on important tasks.
2. Employee selection
One thing that might surprise you: Company values are a sure fire way for making your hiring process a lot easier. When a company’s values are clear and well-defined, they can be used to identify candidates who are a good fit for the organization and its culture.
If your company values teamwork and collaboration, it may prioritize candidates who have demonstrated these qualities in previous roles or who have a track record of working effectively in a team environment. Alternatively, if a company values innovation and creativity, it may prioritize candidates who have a history of generating new ideas and solving complex problems. In addition, corporate values can also be used to assess a candidate’s alignment with the company’s overall mission and purpose. This can help to ensure that new hires are motivated and committed to the company’s goals, which can lead to greater motivation and productivity.
By the way:
Always choosing the wrong people to take on leadership positions? Let’s change that: Have a look at our extensive article about bad leadership examples and the ultimate warning signs to look out for.
3. Business partner selection
Finding the right partners for your business is hard. Corporate values can influence business partner selection by guiding the criteria used to evaluate potential partners and ensuring that they align with the company’s values and mission. When a company’s values are well-defined, they can be used as a benchmark to assess the ethical and social responsibility of potential partners. This will also lead to a much more resilient team.
If your company values sustainability and environmental responsibility, for example, it may prioritize partnering with suppliers and vendors who have a proven track record of implementing sustainable practices in their operations.
4. Setting priorities
Decisions, decisions, and more decisions. What to prioritize? Corporate values can influence setting priorities by providing a framework for decision-making that reflects the company’s mission, purpose, and beliefs. When a company’s values are clear and well-defined, they can be used to prioritize initiatives and activities that align with those values.
As a growing company, we struggle with prioritizing tasks as well. It seems like there’s always too much to do and not enough resources. However, our internalized values always bring us back to those tasks that are most important to our mission. This way, priorities are just that tiny bit easier to set and we are our most efficient selves.
5. Development of new lines of business
Taking on new business ventures can be exciting as well as scary. How should you know if you are doing the right thing, or if the new developments are even what you want? Corporate values can guide you in the right direction, as they provide a framework for assessing potential opportunities and determining whether they align with your company’s mission and.
Corporate Value: Examples
Phew, that was a lot of theory, right? Let’s look at some examples to grasp the essence of corporate values better.
Quality
Delivering good quality services and products is (hopefully) high on the priority list for most businesses. The more heart and soul your team puts into your output, the higher the quality will turn out. When do people give their all to develop something great? Right, when the tasks bring them joy and align with their values.
Example:
Picture the clothing company Patagonia for a second. For many years now, Patagonia has been well-known for their commitment to environmental sustainability. The brand has been built around a commitment to protecting the environment and promoting sustainable business practices.
In 2012, Patagonia introduced a new line of outdoor clothing made from recycled materials called “Re\\collection”, which showed the brand commitment to sustainability in every aspect of the product’s development. The company worked closely with suppliers and manufacturers to source recycled materials that met their rigorous standards. As a result of this commitment to sustainability and quality, the Re\\collection line has been widely recognized for its innovative and eco-friendly design. The product has received numerous awards and accolades for its quality, design, and environmental impact.
Customer friendliness
Happy costumers equal a happy company. Strong corporate values will help you promote a customer-centric culture, demonstrate a commitment to transparency, fairness and respect. The result? Customers will be more satisfied, loyal, and will return to your company again and again.
Example:
Let’s look at an example from the online shoe and clothing retailer Zappos. Zappos has built its brand around a strong commitment to providing exceptional customer service, which has helped to differentiate it from other online retailers and establish a loyal customer base.
That is portrayed by their “365-Day Return Policy,” which allows customers to return products up to a year after purchase for a full refund. This policy reflects the company’s values of transparency and customer satisfaction, as it provides customers with greater flexibility and peace of mind when making purchases. Additionally, Zappos has built a strong reputation for its customer service team, which is available 24/7 and is highly trained to provide personalized support and assistance to customers.
Reliability
Corporate values hold you and your team accountable, which is essential when trying to succeed in a business situation. This can help to establish a reputation for reliability and dependability, as customers and stakeholders can trust that the company will consistently deliver on its promises and maintain high standards of performance.
Example:
One great example of how company values have influenced reliability is the reputation of Toyota, a multinational automotive manufacturer. Toyota has built its brand around a commitment to quality and reliability, which has helped to establish it as a leader in the automotive industry and earn the trust and loyalty of customers around the world.
One way that Toyota demonstrates its commitment to reliability is through its special Toyota production system, which emphasizes continuous improvement and waste reduction in all aspects of the manufacturing process. This system is guided by the company’s core values, which include respect for people and continuous improvement.
Innovation
Innovation is one of the most important driving forces for your company’s success on the market. Strong company values can increase innovation by fostering a culture of creativity, risk-taking, and continuous improvement. This can encourage employees to think outside the box, experiment with new ideas, and pursue innovative solutions to complex problems.
Example:
Take the tech company Apple, for example. Apple’s core values include a focus on simplicity, creativity, and innovation, which have helped to establish it as a leader in the tech industry.
This values-driven approach to innovation is also reflected in its design philosophy, which emphasizes user experience, aesthetics, and simplicity. The company has a history of introducing innovative products that are completely new to the markets, such as the iPod, iPhone, and iPad, which have helped to establish it as a pioneer in the tech industry. Additionally, Apple’s “Blue Sky Program” allows employees to work on independent projects and experiment with new ideas. This encourages employees to take risks and pursue innovative ideas
By the way:
It can be difficult to bring the whole team together just to work on your company values, we get that. We recommend holding a kick-off event at the beginning of the year or an important time. These events pose a perfect opportunity to enhance corporate values.
Implementation of corporate values
Implementing corporate values in a company requires intensive work and is a multistep process.
-
Defining corporate values
The first step is to develop and clearly define the company’s values. We recommend enlisting the help of employees for this. On the basis of the values presented, you should consider which are most important to you and your tea, and which seem essential for the company. We help companies define corporate values in our team development workshops.
During our last team building, we took out some time to revise and shape our existing company values with the whole team. The result: We noticed that some of our old values did no longer resonate with our culture, while new important aspects emerged. For example, we concluded that a focus on sustainability had become an important part of our values. So, you see, creating values is not only the management’s job, but should include all employees. You can find our defined company values here.
-
Communicating the corporate values
In the 2nd phase, it is essential to communicate the corporate values. This process should take place both internally and externally. Training courses, meetings with employees, etc. are ideal means of communicating the defined corporate values. Only when everyone (managers, employees, suppliers, etc.) is involved, they represent the corporate values on their own initiative. The result of this intrinsic motivation: reduction of the fluctuation rate, strengthening of loyalty and employee retention.
-
Establishing the corporate values
The clearly defined and communicated corporate values must subsequently be continuously communicated and also exemplified. Starting at the management level and extending to the lower levels of the hierarchy, the values should be exemplified over and over again until they are finally deeply anchored in the corporate culture.
VIDEO: How should a company share it’s values?
FAQs Corporate Values
What is the purpose of corporate values?
The purpose of corporate values is to create a foundation of the company’s most important aspects. This way, the whole team shares a common purpose and can identify easier with the overall mission.
What core values are important in an organization?
Which values the company wants to focus on is entirely up to them. However, there are some core values that are beneficial for almost any corporation, such as diversity, accountability, creativity, innovation, respect, integrity, and ethics.
Can company values change?
Yes! Your values do not have to be set in stone. In fact, we recommend reevaluating your values after a certain period of time. Yearly team building or development events are a great time to do so, for example.
