Business: Values & Principles

“Education without values, as useful as it is, seems rather
to make man a more clever devil.”
C. S. Lewis

“Important principles may, and must, be inflexible.”
Abraham Lincoln

Values and principles the key component of any organization and they define the basis upon which decisions are made and organization conduct occurs.  Used as the basis for communicating what a business stands for they really define what the leadership – as individuals – is prepared to honor in every aspect of directing the business, motivating employees and cultivating relationships with customers and the community.

What are examples of values and principles?
The following are example from prominent businesses of values and principles that form the basis upon which they have established highly regarded reputations for their work environment, market leadership, product innovation, impact on the community and customer value.

Description Examples
Values: How personnel interact within the company and with the public in the daily conduct of their business.
  • Dependable and do the right thing
  • Open to different ideas and cultures
  • Connected to customers, communities, regulators and each other
  • Understanding what the customer wants and delivering it flawlessly.
  • Foster a participatory workplace
  • Encourage cooperative efforts at every level
Principles: Sets the standard by which strategy and commercial decisions are made.
  • Know What You Value and Why
  • Demonstrate the Courage of Leadership
  • Don’t Compromise Quality
  • Exceed Customer Expectations
  • Minds Create Value, So Treat Them With Respect
  • Let Creativity Work For You
  • Understand and serve the customer

 

What role should values and principles play in business success? 
Many successful businesses publicly promote and display their company values and principles that guide their daily conduct with employees, customers and the community. Yet, many businesses are not that successful or are outright failing even though they have “values and principles”.

What makes the difference? 
Visible values and principles (often referred to as Company Ethics) are the corner stone of many businesses but not all of businesses are successful in their adoption and execution.  It is easy to borrow what “successful” businesses use as their values and principles and then encode them into company literature, company lobbies and employee congregation areas.

The difference between the intentional use of values and principles to guide company behavior and a business that just “borrows” them lies in the day-to-day walk and talk of the leadership.  Success is based upon how they apply the published values and principles.  It is their enthusiasm, embodiment and demonstrated commitment that make the difference.

Path to Success?
Successfully applying values and principles in a business is a challenging job for many in company leadership because it means you have to walk your talk. This  is not easy for many leaders to do – consistently – particularly under stressful circumstances or when they are caught off guard and more importantly when no one else is watching.  It is easy to put values and principles on the lobby wall, in the company brochure and speak to them at public venues but it is another to have it exemplified in every aspect of their personal conduct in (and out of) the business.

It is not easy to remain compliant with values and principles when:

  1. The business is under financial stress.
  2. When you have a valued employee that demonstrates improper conduct.
  3. You have discovered a significant problem that will affect your customer and adversely affect the bottom line and you have the opportunity to not disclose it.
  4. A valued customer asks for “special” treatment that you cannot afford to extend to all of your customers.
  5. You consider company values and principles to be what others are bound to – but not you.

I have witnessed examples where leadership faltered when confronted with these examples (and other circumstances not listed above) and the effect on the organization and business performance over time was significant.  Commitment to business and project goals slipped, employee loyalty suffered, employee turnover increased, customer relationships were compromised and sales performance faltered.

The example of broken trust became visible to many even though they were not directly affected.  Adopting different rules when challenged by a business event declares that, despite what is said publicly, leadership will, under various circumstances, choose to operate under a different set of unpublished “values and principles”.

What does this say to others? 
If it is OK for leadership to deviate then it is Ok for me. A key question for employees, customers and community is “Is this a company that you can trust to look out for your interests?”

Leadership should choose the values and principles it feels are necessary to guide the business carefully.  Developing values and principles is not rocket science but they should reflect how leadership wants the company (including leadership) to operate under all circumstances.  True, leadership cannot anticipate all of the trials that it will experience but a carefully thought out set of values and principles will define how the company will handle them as they occur.

Summary
When leadership handles adversity successfully, adhering to their values and principles, they send an invaluable message of trust to employees, customers and the community.  We choose employers, vendors, and suppliers based not only on price but also on trust.

We ask ourselves:

  • When I need them can I rely on them to “live” up to their values and principles?
  • Will they be there when I need them?
  • Will they honor their support agreement?
  • Will they let me know something I need to know even though it may mean a cost to them?

Assess yourself.

  1. What are my values and principles?
  2. Are they published and distributed?
  3. Do I honor them in all aspects of your business?
  4. Do I discuss them regularly with employees and customers?
  5. Do my employees and customers recognize them in their daily contact with your business?
  6. Have I asked others their opinion of how you perform to your values and principles?

At the end of the day how well do you score honoring the values and principles of your business?

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