As a leader your role is to move individuals and the organization closer to achieving their goals. Thus, it behooves you to make use of every tool at your disposal. This article highlights an important tool – organizational core values – and how to convert them into competitive advantage.
As a leader there are a few things to know about core values:
- What are core values?
Beliefs and attitudes that show up in the daily behavior, action, and decision making of people. Each one of us has our own set of values that guide how we live our lives. Like individuals, organizations have core values. They work best when purposely chosen to support the uniqueness of the business.
2. When do companies define their core values?
For executives who want everyone moving in the same direction, core values may initially be crafted early in the life of a company. They may also be defined or refined at major transitions such as rapid growth, commercialization, globalization, new leadership or ownership, turnaround or when big changes to the business strategy or model occur. Values tend to stand the test of time when selected to support the uniqueness of the business.
What happens when core values are not instilled in an organization? Customers, suppliers, and employees have inconsistent experiences. That is because the most influential leaders will impose their values within their pockets of the organization which is mixed with employees who live by their own set of rules. So, you end up with a mixed bag, workforce fragmentation, and inconsistent experiences.
3. Why do organizations invest in developing and implementing core values?
Because they are instrumental in increasing employee engagement, moving the entire organization in the same direction in support of organizational goals, and providing customers, suppliers, and employees a positive and predictable experience thereby contributing to company brand. And the more engaged employees are the more likely the organization will outperform the competition; just look at the data.
A Gallup study indicated that:
- 70% of employees are not engaged. Further it has been estimated that on average the cost of a disengaged employee is at least 46% of salary in lost productivity.
- And among the companies that ranked in the top 25% for employee engagement, they showed:
- 22% higher profitability
- 21% higher productivity
- 10% higher customer satisfaction
- 25% lower turnover in high-turnover organizations
- 65% lower turnover in low-turnover organizations
- 37% lower absenteeism, 48% fewer safety incidents, and 41% fewer quality incidents.
3. Once defined, how do leaders keep the values alive within the organization?
Excellent question. Defining the values will get you only so far.
- First and foremost, leaders must walk the talk through their words, intentions, and actions.
- Express the values in terms employees find relevant to their jobs.
- Build the values into the recruiting and selection process.
- Introduce the values when onboarding new hires.
- Integrate them into coaching conversations, performance management system and development initiatives.
- Recognize and reward people for contributions where the values operated as their guiding principles.
Core values can truly translate into competitive advantage. Take it a step further by engaging customers, suppliers, and other stakeholders in the conversation.
Let me know if you would like more information so that you may move this leadership imperative forward.
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