If you know how to uncover them and translate them into action, core values can provide a foundation for transformational change that will unleash tremendous value in your business and your personal life.
In my work with second-stage entrepreneurs, it’s become clear that there is a lot of confusion out there about the relationship between a business’s core values; its purpose; and its products and services. It’s also clear that the confusion is leading to a lot of wasted time, money and effort.
So, in this post, I’m going to clarify the difference between each and provide some guidance on how to discover core values that will engage leadership, employees, customers, vendors, and other stakeholders to actually create value for you and your business.
In a nutshell, here is the difference between the three items:
- Core values describe HOW you conduct business They can and should drive company culture.
- Purpose describes WHY a company does what it does.
- Products and Services describe WHAT a business does.
Boom! It’s that simple.
Core values aren’t about right or wrong. They don’t assert that there is only one proper way of doing things. They merely describe how we as entrepreneurs do things. They must be organic, which is to say they must be uncovered with the leadership team through a deliberate process of discovery. They can’t be dictated from above or outside and should be grounded in the founder’s strengths. They proclaim, “this is our culture by design.”
As entrepreneurs, we want to surround ourselves with people that “fit,” or do things HOW we want to do them. The same can be said for customers and vendors. There is no way we can do business successfully with people that don’t match our values.
When done properly, the process of discovering core values can help leadership transform an organization and take it to the next level. If botched, the process can undermine leaders’ credibility and be destructive.
When identifying core values, I’ve found it useful to distinguish them from three other types of values laid out in this Harvard Business Review article.
- Accidental Values: These are often imposed with little to no examination of an organization’s key strengths. They are often driven by the latest management or self-improvement fad and can result in a tremendous waste of resources and time.
- Permission-to-Play Values: These are the bare minimum, or cost of entry, for competing in an industry. You will be hard-pressed to differentiate yourself from the competition with these.
- Aspirational Values: These are values that a company lacks, but believes it will need to develop if it is to succeed in over the long term.
Do it like mom is watching
Core values are expressed with active verbs chosen to provoke specific behaviors so that people understand how to live core values now – in the present.
One of my favorite examples is “Do it as if your mom is watching.”
Compare that to the vague aspirational values of “integrity,” “respect,” and “responsibility.” Sure, they are widely admired traits, but they mean so many different things to so many different people. By using active verbs, you send a clear signal about how you do things, or at least how you aspire to do things. And the great thing about verbs is that they tend to be less ambiguous and nurture a bias toward action.
Imagine this is how you run your business. You’d always be on your best behavior, never doing less than the right thing in the right way. Someone whose opinion matters is watching you; someone you never want to disappoint. It’s a value that makes you accountable.
For owner-entrepreneurs, uncovering your own core values, translating them into actionable language and integrating them into your business takes guts. Why guts? Because when you integrate core values you are essentially making yourself accountable along with everyone else in your organization for upholding those values. You are making yourself vulnerable.
Mom may not be watching, but the world is. I’m here to tell you that you can do it. I’ve thrived by embodying my own values and helping clients do the same and see how the process consistently unlocks potential and enables people to leave behind their fears and live life by design.
I’ll be elaborating on this in upcoming posts, including one about how to bring your core values to light through recruiting, hiring, reviewing and rewarding employees. We will also be sharing some case studies to show how The Profit Recipe has helped its clients implement the Entrepreneurial Operating System.
Cesar Quintero is the founder of The Profit Recipe, a coaching firm that helps entrepreneurs scale their businesses so they can live by design. To learn more about EOS implementation and other services offered by the company, schedule an appointment with Cesar today.