Why companies need to build a value-rich culture
A recent survey of 1,400 CEOs found that an overwhelming majority (92%) believed that in the long term, improving the company's culture and values would be beneficial. The executives also said that values influenced productivity, profitability, and growth across the organisation.
However, firms have found it challenging to integrate values and culture, especially as the organisation scales over time. Only 15% of the survey respondents said their firm's value was where it needed to be.
In a rapidly evolving business environment, it is now more critical than ever for startups and smaller firms to develop values aligned with the company's long-term goals. But what exactly are these values, and how can companies implement this?
Understanding company values
Company values are essentially a set of guiding principles from the founders dictating policies that define the rules and regulations around work conduct at the workplace. While values may vary from business to business, the intention is to unify employees toward the organisation's common goal. Common values in a company include accountability, compassion, excellence, integrity, respect, and transparency.
Why values matter
As companies expand, their foundation principles tend to dilute, creating different views and goals across cadres in an organisation. As the drift increases between the old and new management so do conflicts, leaving the employees divided, disconnected, and confused.
To create a uniform code of conduct, companies must define the parameters within which the management can take decisions across cadres when dealing with internal and external customers.
If implemented and practised, the values do the job of cementing employees across the organisation, bridging the gap between new and old employees, and the management. To successfully ingrain the values in the fabric of the organisation, the management needs to walk the talk while adopting measures to instil the same in employees.
The resulting organisation would be forward-looking, having a single vision and goal, and presenting a single united front to investors and customers. The single face of the company builds trust and confidence in the company adding to its brand value and credibility.
Values such as integrity, transparency, and compassion help create an environment that builds employees' trust in the management, resulting in higher employee engagement and retention. The Workforce Purpose Index shows that most managers (57% of respondents) fail to build strong relationships with their employees, resulting in talent attrition. A firm with aligned values not only has higher retention but earns a reputation of being the employer of choice, attracting talent.
Accountability and excellence have a bearing on the company’s customer engagement. If the employees live these values they help enhance customer engagement—building trust—leading to higher customer satisfaction and retention. Eight out of 10 customers say that customer service defines their brand loyalty.
The goodwill from both employees and customers elevates the brand value. The company builds the reputation of being the brand of choice for both clients and employees. A recent survey by Imperative revealed that 58% of the firms surveyed with businesses aligned to their values saw a 10% or more growth compared to those with unaligned values. Needless to say, improved customer engagement and employee retention form the magic mantra for business growth.
Creating value in a company
While it is easy for companies to describe products or services, it may be more difficult for the firm to define and create its culture and values. While company values are generally intangible, founders and managers need to identify an organisation's culture to pursue their long-term goals. Startups can use a systematic framework to design their values.
- Creating a team to identify values: Since a company's culture and values are meant to be inclusive, startups and smaller organisations need to bring in diverse individuals from across all cadres and functions to help define its values. While most business decisions such as products and pricing are taken solely by upper management, decisions on culture and values should ideally include all stakeholders, including executives, marketing, sales, product development, and customer service-focused employees. In addition, the company needs to consider the inputs from its customers and employees, and from partner firms to gauge feedback fully.
- Identifying key traits: Once the company has gathered its employees and stakeholders to brainstorm its core values, discuss how their values have played a role in the firm. Furthermore, the company should also discuss how the personal beliefs have aligned or don't align with the company. The most common/repeated answers should be gathered, with similarities showing a sign of the strength in the company's values. Once the representative list of values has been arrived at, it is crucial to narrow the list down to a few core values (between 5-10). These core values will form the pillars of the company's culture.
- Share and monitor values: Once the company has identified its core values, it is crucial to share them. The company can create an internal rollout campaign to help convey the firm's culture to its employees. Additionally, the management needs to walk the talk at all times and employ tools and techniques to ingrain the core values, and after that, build periodic check-ins. It will help drive home the value system and its importance and will help increase employees' self-awareness, allowing them to reflect on experiences throughout the year to realign themselves to the values wherever necessary.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)