Respect, integrity, sustainability, and innovation are – all examples of corporate values that are hard to argue against, and easily found in mission statements of some of the world’s most successful companies such as Nike, Shell, and Microsoft, while also apparent in the mission statements of companies like Enron. The case against pursuing the development of such values is a difficult one as they are undeniably defining pieces of the modern successful company archetype. Corporate values are often credited with being key determinants of components of high performing company cultures – How then can similar Corporate values outlined mission statements produce such different cultures?
In part, it comes down to the fact that people often do things that are contradictory to their values, without even realizing it.
The development of Corporate values carried out with the best of intentions, however what determines Corporate culture is the actions of among individuals within a Company. It is easy to forget that a Company is essentially a group of individuals working in concert to achieve certain goals. The actions that each individual of a company takes on a daily basis is what drives corporate culture and values – not the other way around.
Thus, in order to drive certain performance, Companies need to look at what employees do on a daily basis (their habits), instead of what they should value (their values). Impressing a strong set of habits within an organization equips team members with tools that they can use when facing difficult decisions. For instance, when faced with the dilemma associated with a faulty product being to a client, it is much easier for a team member to carry out the habit of ”Do Good”, rather than inferring an action associated with Integrity, Respect, or Innovation. Properly defined corporate habits do more than deliver returns on day-to-day operational questions, and also extend to other crucial areas such as recruiting. Finding talent that values sustainability is much harder than finding someone who provides an example of “making the right long term decision, at the cost of short term results”. Effective recruitment efforts demand search for strong evidence of candidate decisions that align with Corporate Habits, by asking questions that focus on why a decision was made by the candidate, rather than questions that focus on the results achieved.
What do examples of expressing corporate principles in the form of habits, instead of values look like? The key lies in breaking down values into smaller action-oriented habits. The value of Integrity can be represented by a combination of “Do good”, and “People First”, while “Be curious” and “Make simple” could signify Innovation. From these examples it is clear to see that it is easier to ask team members to “make something simple”, rather than to “Innovate” – for this reason, habits do a better job at representing the desired moral principles of a Company, than values do.
Despite the overall intent of setting and applying corporate values within an organization being commendable, corporate values are not sufficient on their own to drive operational culture and actions. On their own, values are hard to apply to decisions that employees face on a day-to-day basis. Rather, Company leadership should focus on aligning day-to-day decision logic, rather than trying to control results. Company leadership cannot be present to make every decision that a Company needs to make, and thus must rely on Company team members to make decisions in a fashion that is consistent with the desired habits that define the organization. Creating a culture that delivers decisions that are consistent with a well-built set of Corporate Habits will deliver strong results over the long term.
In order to foster a clear, consistent, enduring, replicable Company Culture, companies should focus on re-framing their “Values” into tangible “Habits”. Breaking down values into small behaviours that are simple, easy to understand and easy to apply to day-to-day decisions, is an effective way to build out a set of Corporate Habits. Once habits are in place, they need to be consistently reinforced by the leadership team, until the point when all team members openly recognize examples of team members making decisions that are consistent with Company Habits.
The difference between the concept of corporate values and habits is slight, but important. Effective companies will recognize that actions speak louder than words, and will build Corporate Habits to equip their teams with clear and concise guidelines on how to make decisions that will deliver long term sustainable value to Clients and Companies, alike.