The Ultimate Guide to Company Core Values

Your company core values describe a set of priority behaviors that are encouraged or discouraged within your company. They provide a means for leaders to intentionally design company culture in specific, concrete terms that are easy for everyone to understand, and that are easy for everyone to use to guide decisions. 

Culture is popularly described in vague terms with metaphors like “chemistry,” and its ability to “eat strategy for breakfast.” Company core values make specific, real aspects of culture visible and easy to encourage. And they allow individuals to take ownership of the company culture. At their simplest, company core values describe what types of behaviors every employee should “high five” when they notice. Many healthy organizations even provide incentives and rewards when people exhibit these company core values in order to more strongly reinforce this element of culture.

Why Companies Need Core Values

Research published in the Harvard Business Review showed that the top reason that strategy execution fails is unclear values and conflicting priorities. There are a few reasons this is the case: for one, it has also been conclusively shown that people make sense of the world in very different ways, and for another, research shows we, as people, greatly overestimate our ability to communicate and convey information.

At work when many things are left “unspoken” or “unwritten,” it can cause problems and inflate costs in several ways. These include:

• Unnecessary debates and personal conflicts - especially in challenging circumstances.

• Poor decision making in a variety of ways

• Lack of trust

• Breaking of “unspoken rules”

• Difficulty finding people who seem to “fit in”

• Difficulty finding what Jim Collins calls “the right people on the bus,” the people you need to succeed

• Difficulty getting the right people into the right seats on the bus (people not being in roles where they can do the role effectively, or are interested in the role)

• Disengagement and individuals who detract from company goals.

• Achieving a number, at the expense of violating rules or laws

When a company designs clear, actionable company core values, it eliminates the most common sources of these problems.

The Benefits of Having Company Core Values

Company core values are a framework for consistent decision-making, so that teams can navigate even complex situations with confidence and clarity. Company core values achieve this by bringing everyone together within a set of clear guidelines that guide behavior while taking action, and they show the direction to take when making decisions. This allows for better action and decisions, even when unexpected situations arise. 

Ultimately, core values are the cornerstone of a high-performing organization. They provide a shared language, a common purpose, and a way to know whether a company considers “doing the right thing,” even in the face of adversity. They build a positive, healthy, adaptable and resilient culture.

Specific examples of decision making and action that is improved by company core values include:

• Improved decisions on hiring/firing: employees or potential employees can be evaluated in simple terms for company core values alignment. This can be useful whether you are just starting out and also when you grow beyond 100 or more people.

• Improved decisions in situations with ambiguity or challenges: When company core values are clear, consistently communicated and reinforced by all team members, they provide a reliable decision making framework.  This consistency helps teams navigate challenges more effectively and stay aligned even when stress levels rise.

• Improved engagement and ownership at every level of a company: Company core values, when crafted well, are behaviors that are easy for employees to see and encourage in one another, such as with high fives and other forms of rewards and incentives. Studies are clear that when people receive - and especially when we give this type of encouragement, it leads to a stronger sense of ownership, resilience, meaning and connection.

• Improved Resilience and Adaptability: In times of change or adversity, company core values serve as a stable foundation that provides a sense of stability and continuity. 

• Improved customer, partner and vendor relationships: Entrepreneurs and authors Dave Cava and Shawn Walsh that company core values provide great benefit when used to make decisions about partnerships, customers and vendors. Those organizations who share or honor the same principles represented by your company core values will be the ones that are most profitable and easiest to work with. Whole Foods Market famously select products from manufacturers and distributors who share their company core values.

Checklist for Creating Action-Focused Company Core Values

Evaluate each of your company core values using this checklist:

✅ Is the company core value actionable?

Does the company core value describe a specific behavior, as opposed to describing an aspiration such as “integrity” or a “permission-to-play” value such as “honesty”

✅ Is the company core value clear enough for anyone to understand?

Can a person without special knowledge about your company, and without much context about your business understand the core value?

✅ Does the company core value inform prioritization?

The number one reason strategy-execution fails is unclear values and conflicting priorities. Core values should automatically help you prioritize. They help you to decide which behaviors are most important, and to make decisions about how you order priorities in your day, or in the moment. Core values guide those decisions.

✅ Do your core values help you hire?

Core values are often “hiring advisors,” and unfortunately sometimes firing advisors, because they help you look for people who are value-aligned enough that they can be successful in your company.

✅ Are your core values high-five-able?

Core values inform behavior, so they will come up on a pretty regular basis. Your core values need to be well-defined enough that you can encourage them consistently and continually. That’s how you build culture in a real, concrete, and action-focused way.

✅ Do your core values help coach and guide performance improvement?

Your core values give you an inventory of the behaviors that help your team perform well together. That allows you to better observe the areas you need to improve, and the areas where you’re crushing it.

How to Create Core Values

You can build good company core values as either an individual or group exercise. Some companies bring in outside consultants, however, the process can be simple, relatively quick - and highly rewarding to do on your own. 

Prerequisites for creating company core values:

Before beginning, learn the difference between aspirational core values, permission-to-play core values, and actionable company core values. With these distinctions in mind, you may choose one of 3 approaches depending on the number of decision makers and the size of your company. 

Approaches to create company core values:

In each approach, target creation of 5-10 actionable company core values. 

1. Single decision maker: Create company core values step by step (see this link), then socialize for comments and refine based on feedback. 

2. Group exercise: Create company core values (see this link) as a part of a group exercise, then combine and distill the submissions into your final drafts; then socialize for comments and refine based on feedback.

Creating company core values step by step:

A useful process for creating company values follows these steps (click here for a video walkthrough of the process):

1. Identify 3-5 people who you consider to be ideal employees and/or teammates; if your company is new, you may need think to other companies where you’ve worked, or mentors

2. For each person, recall and outline a memory of a time this person made a strong positive impression upon you.

3. Outline the memory using the Pixar story format.

4. Use the memory to brainstorm, draft and refine an easy-to-remember title for the core value, and provide some additional context in the description.  

It can also be useful to run 3-5 “anti-cases.” Outline situations where things went poorly, especially with someone who was clearly not a fit for your team. In step 2, you’ll use a negative memory that stands out as something that is intolerable. 

When you get to step 4, run the exercise again, this time replacing the negative behavior with the contrasting positive behavior you expected to see, or that you would want to see in this situation. 

• Tips and templates: You can enter your core values in ResultMaps

• Use our step-by-step course to get a video walk through of the process. 

• Click to access our free company core values workbook