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How to create core values with value

“Company values”.
Two words that are often loaded with corporate hot air and bullsh*t. 

They’re not easy to get right. Too many CEOs jump on the bandwagon, paying lip service to the idea of values and ending up with vague, meaningless statements that are no use to anyone. 

Staff get cynical and customers doubtful – the complete opposite of what values are meant to achieve!

And yet, if you drill down into the DNA of your company, it’s possible to isolate values that actually mean something. 

Give deliberate time and energy to this process, and you’ll eventually get to the root of what truly drives and distinguishes your organisation. Once you’ve defined these authentic values, they’ll act like a rudder for your business, steering you through the challenges and opportunities of scaling up.

So how do you cut the cr*p? What’s the best way to define values that are authentic?

Understand why values are important

There’s no point putting time and effort into something unless you truly believe it’s worth it. If you’re a small company with great alignment within your team, you probably don’t need to worry. Communication channels are good, everyone knows what’s expected, there’s nowhere to hide and you’re well aware of people’s strengths and weaknesses.

However, as your company grows and your culture evolves, you’ll start to need a framework to retain control over your core beliefs. And this is where values come in. Values are the definition of your company’s culture. They’re a shorthand way of capturing behaviours you see as crucial in your business.  

Values only work if you can hire, promote and fire within them. If you can’t do this, chances are they’re not right, and you need to revisit them.

Find the right approach

My first experience of defining company values came when I was MD at Rackspace. We’d grown to 12 people in the UK, and one day, a team member came to me and said, ‘You know Jo Bloggs?’ (I’m using a false name here because I don’t want you to know it was Ed that Anne was talking to me about) ‘Well, he’s useless. He’s just not one of us.’  

This got me thinking – what constituted ‘one of us’? 

I got the whole team together and told them that I wanted all the positives instead of the negatives. What were the behaviours that we valued at Rackspace? We came up with a list of 14 traits that we wanted to encourage and, from these, whittled down to a set of six company values. Whilst they’ve evolved over time, the values of Rackspace now are still consistent with these founding principles:

  1. Treating Rackers Like Friends and Family 
  2. Passion For Our Work 
  3. Committed To Greatness
  4. Full Disclosure & Transparency 
  5. Substance Over Flash
  6. Fanatical Support In All We Do

When coaching clients, I use Jim Collins’ ‘Mission to Mars’ framework – an excellent approach for defining values. Depending on the company’s size, I start with the executive team and then broaden out to management and sometimes the whole staff, taking everyone through the same exercise. I get them to imagine we’re building an outpost of their company on Mars. But there are only five seats on the rocket ship. 

Who would they send?

Who best represents the DNA of their company? 

Who has the highest level of competence and credibility with their peers?

Everyone writes down the names of their five nominations. Once we’ve reached an agreement, we discuss why they’ve been chosen. What are the behaviours they exhibit? Having pinpointed this list, we boil them down, defining the core values at the heart of these traits. 

Communicate and praise

Everyone in your organisation needs to live and breathe your values. Don’t just include them on your website and marketing literature. Put them up on the wall. Add them to all your documentation, security passes, anything that will reinforce the message. When you see someone displaying a behaviour linked with your values, single them out.

At Rackspace, we always gave praise through a values lens. If we caught someone doing the right thing, we’d say thanks, then write it on a post-it note and stick it on the wall next to the value they embodied. Kudos and social currency were doled out according to Rackspace values. In monthly, all-hands meetings, team leaders would stand up and give bottles of champagne to people outside their team who’d enabled them to deliver outstanding service. Our employee of the month and quarter were all chosen by the staff based on our values.

Hire, promote and fire according to your values

It’s really important to ensure all your staff are a values-fit. You need to be clear about the behaviours you want to see otherwise, you won’t be able to hire for them. Once you have the list, they simplify recruitment, making it consistent across disciplines. 

You’re only looking for people that exhibit and evidence these behaviours.

As MD of Peer 1, I ensured our values were at the heart of our performance development process. In our leadership maturity model, staff could be a ‘player, coach, master or guru’ against our values. If you ranked as a ‘player’, you were exhibiting the behaviour that links to the value well enough, but you could be doing it better. This gave a clear idea about personal development and direction for improvement.

We scored everyone against our values every quarter when we were still small at Rackspace. The person with the highest score was then the de facto employee of the quarter, and I’d speak directly to any staff with low scores.

I remember vividly one guy, David, who scored at the very bottom one particular quarter. The feedback I gave him was, ‘Really sorry you’re at the bottom, but you didn’t pick the phone up quickly enough, and that’s really annoying everyone on your team.’ Next quarter, bang! He came first, winning employee of the quarter. He’d been given simple, direct feedback that he acted on straight away.

These days I sum this up as giving staff radically candid feedback.

A good set of values can help with workforce planning. Every quarter, rank everyone in your organisation against them. Decide whether they are 

A) exceeding your values, 

B) meeting them or,

C) falling short. 

You need to get everyone up to an A.

Your aim must only employ A Players – the top 5-10% of available talent for a given salary, in your location, for that particular job. Remember, A Players are going to give you 10x or even 20x more for roughly the same salary. Only keep B Players if you think they have the potential to be A Players. The C players or those who don’t live the values need some candid feedback and a narrower or new role. Or they need to leave.

Review your values every quarter

Once you’ve decided and agreed your values, recognise that they’re not set in stone. You need to assess whether they’re useful and working. Review them every quarter, checking that they’re guiding your recruitment and performance development. They really should be a compass or north star leading your business forward.

Your values should touch on everything you do. If you asked any member of your staff, they should be able to tell you them instantly. 

Check they pass the ‘sniff test’ with customers. Talk to new and existing customers and find out if they’ve experienced your values in their everyday interactions with your company and staff. Is it obvious to them that your values are alive? If the answer’s yes, they’re genuinely part of the fabric of your company.

After review, if you feel a particular value isn’t right or working well for your company, cull it or refine it down into something that’s more meaningful to your team. Less is more.

Finally, resist the temptation to use words like teamwork, ethical or excellence as your values. Try this test. If you read your list of values, would it identify your firm in your industry, or could it be any of your competitors? You are looking for a distinctive set of words – your choice of language is important. In its annual report to shareholders, Enron listed its core values as follows:

Communication – We have an obligation to communicate.
Respect – We treat others as we would like to be treated.
Integrity – We work with customers and prospects openly, honestly, and sincerely.

Values are the essence of your company’s identity. They communicate what’s important to you and define your organisational culture. But they’re only truly valuable if they’re deeply embedded in the way you do business, interact with others, recruit, develop and grow. Having a set of shared values that everyone buys into will help you shape a strong culture. This, in turn, will energise staff, increase productivity and ultimately drive growth.

P.S. Want to get more actionable ideas to create core values that truly matter? Learn how to bring them to life in your business in my new book, Mind Your F**king Business. Get your copy today!
Dominic Monkhouse

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