The importance of values – and the damage when they are not upheld

For the last month, I have been seconded into one of Daymark’s not-for-profit clients for two days a week. Working inside this leading social change organisation with its strong workplace culture has provided a salient reminder of the benefits not just of clear organisational values, but of living them out each day.

Over the years, Daymark has helped many clients define their vision, mission and values. Often included in organisational profiles – both written and online – these statements send a clear message to the broader community about what an organisation stands for, what it sees as important, and what differentiates it from others in the same market.

But values serve a much greater importance than simply framing how an organisation is seen. Clear values are the guiding principles that should steer every decision, action, and interaction within an organisation. In fact, workshopping and defining core values is just the beginning for a truly values-led organisation. To be effective in shaping culture and building brand and reputation, values must be fully embedded and constantly reinforced.

This means integrating them into every aspect of employee management, from recruitment (interview questions that probe understanding of and allegiance to the values, for example), performance reviews and incentive benchmarks to, in some cases, what might constitute grounds for dismissal. Personnel, from the CEO to the newest recruit, must understand the values and their importance, and act accordingly.

To be effective, values must represent reality, not aspiration or a mere marketing purpose. While most companies have started to consciously reduce their impact on the environment, for example, far fewer could claim “sustainability” as a value. One of Enron’s values was “integrity”, and we know how that ended.

But when values are embedded and “lived”, they bring clear advantages to how an organisation operates, including:

Effective decision making

At the heart of any entity’s functionality lies its decision-making processes. Managers face numerous decisions each day, some inconsequential but many of them difficult. When viewed through the prism of the organisation’s values, however, the “right” step forward sometimes becomes more obvious. Short-term profit should never undermine a company’s commitment to values over the longer term.

Clear understanding of values is also important in the event of a crisis, providing a compass to help navigate challenging situations while maintaining credibility. This is why Daymark includes a ‘guiding principles’ section in each Crisis Management Plan it creates for clients.

Communications

Values-driven entities develop language that reflects their guiding principles and how these principles impact on the organisation’s work. This helps present a unified voice to the external world. People sometimes misunderstand how employee diversity and common values interrelate. Diversity brings the benefit of different experiences and perspectives, contributing greater depth to decision making. But common values ensure that a workforce, while comprising diverse individuals, is operating with shared purpose.

Trust

Incorporating values in everyday operations is an important part of demonstrating integrity and building trust with stakeholders, whether they are shareholders, customers, employees or the broader community.

Empty values are demotivating and confusing for the workforce while undermining credibility of both the leadership and the company as a whole. This is one of the reasons Daymark assists organisations to road test their values with stakeholders; sometimes an external perspective is as important as what comes from within an organisation, providing valuable feedback on whether an organisation is indeed living by certain principles or merely aspires to do so.

Organisations should also understand the damage that occurs when they fail to live up to their values. Telecommunications company Optus boasts “customer focus” as a value, for example, committing to “treat each customer with dignity and respect; listen to, anticipate and satisfy their needs while simplifying their experience.” While many customers affected by the recent outage were forgiving of the technology failure, they were angered at the company’s failure to communicate early and regularly, and by the company’s compensation gesture of free data which failed to differentiate between their individual needs and situations.

Staff motivation

As well as resonating with customers and external stakeholders, values can be a key point of differentiation for employees and prospective employees. In a not-for-profit setting, where salaries might be more constrained, alignment with values can be a driving reason for ongoing commitment. A committed work environment resting on clear organisational culture is a powerful recruitment tool.

Values aren’t just pretty words transferred from a whiteboard to your annual report. They drive – or should drive – purpose, integrity and your pathway to excellence. But don’t be half-hearted in your commitment. Failing to uphold values can be more damaging than having none at all.