The Value of Values
Aligning Organizational and Individual Values: A Guide for Business Leaders, Part 1
Imagine you’re the founder or the CEO of a growing business. You’ve heard about the importance of company values, so you gather your team for a brainstorming session. After a few hours and several pizzas, you emerge with a list of inspiring words: People, Performance, Excellence, Teamwork, Authenticity. You quickly add them to your website and company handbook. Job done, right?
Not quite.
If you think that’s all it takes to create a values-driven organization, you are trying to build a house on quicksand.
Values are the bedrock of your company culture.
As more business professionals come to understand the value of employee engagement, they’re realizing that organizational values are far more than just catchy phrases or marketing tools. Values are the bedrock of your company culture, the silent force guiding decisions at every level, and – when done right – the invisible foundation that can support the evolution of your business from good to great.
Key here: “when done right.”
In this article, the first of a three-part series, we’re going to dive deep into the world of organizational values. We’ll explore what they really are, why they matter, and the challenges of aligning them with the diverse values of your employees. Think of it as Values 101 for the discerning business leader.
Understanding Organizational Values: More Than Just Words on a Wall
Before we dive in, let’s address the first obstacle on the path to establishing meaningful organizational values: misinterpretation. Many leaders stumble here, so let’s start by clearly defining our terms. What exactly are organizational values?
At their core, values are the fundamental beliefs that drive behaviour and decision-making. They’re the guiding principles that an organization uses to govern its actions and decisions, the non-negotiables that shape its culture and identity.
Values are the fundamental beliefs that drive behaviour and decision-making.
But to truly understand values, we need to take a quick detour into the world of psychology. If you find it boring, you might be tempted to skip ahead, but resist that urge. One of the problems with culture change implementation is that the “implementers,” who often come from finance or tech fields, believe that if they know their “tangible” subject matter, then all those intangible “touchy-feely” stuff is a no-brainer. So as a minimum, let’s refresh the basics.
Let’s start with Abraham Maslow and his famous hierarchy of needs. You know the one – that pyramid that starts with basic physiological needs at the bottom and ends with self-actualization at the top. While Maslow focused on needs, these needs translate into values that drive behaviour in both individuals and organizations.
Organizations have their own version of this hierarchy, where needs evolve into values. At the base, we have values related to the basics: financial stability, operational efficiency, and regulatory compliance. These are the “keep the lights on” values, akin to Maslow’s physiological and safety needs. Moving up, we find values related to growth, innovation, and market leadership, which parallel Maslow’s esteem needs. And at the top? That’s where we find the lofty ideals of social responsibility, diversity, inclusion, sustainability, and leaving a positive legacy – comparable to Maslow’s self-actualization level.
Maslow’s hierarchy offers a useful initial framework, but to truly understand the nature of values, we need to consider Shalom Schwartz’s Theory of Basic Human Values. While Maslow’s hierarchy helps us understand the progression of needs and corresponding values, Schwartz identified ten universal values that exist across cultures: power, achievement, hedonism, stimulation, self-direction, universalism, benevolence, tradition, conformity, and security. These values don’t necessarily follow a hierarchical structure but instead are arranged in a circular sequence, with conflicting values placed on the opposite sides of the circumplex.
Here’s where it gets interesting: Organizations, like individuals, tend to prioritize some of these values over others. A fledgling hi-tech venture may prioritize stimulation and self-direction, while a government agency (even if it is called National Research Agency) might lean towards security and tradition. Understanding this can help you identify your organization’s true values, not just the ones you wish you had.
Values don’t exist in a vacuum. They’re part of a larger ecosystem that includes Purpose, Mission, and Vision.
But values don’t exist in a vacuum. They’re part of a larger ecosystem that includes Purpose, Mission, and Vision. Let’s break these down:
– Purpose: the reason your organization exists beyond making money. It’s your “why” or “why do we do what we do?” or “why do we exist?” Purpose has an external focus and illustrates social benefits that your organization intends to provide. Unclear or absent Purpose is the root cause of many morale problems.
– Mission: the organization’s focus and road map. What your organization does to fulfill its purpose. It’s your “what” or “What do we do?” – the process of getting from where you are – to the Why.
– Vision: gives you the direction. Where your organization aims to be in the future, what does it aspire to achieve – and perhaps where do you want to take the world.
Mission and Vision statements communicate an organization’s Purpose and Values, and provide a guiding framework for developing strategies that drive progress.
To put them all together, Mission is the roadmap that takes your organization in the direction of your Vision, to achieve your Purpose.
So where do Values fit in?
Values are core beliefs that carry deep emotional significance. For individuals, they are personal convictions; for organizations, they are the principles that guide collective behavior and decision-making. These guiding standards of conduct and philosophical ideas form the foundation that informs an organization’s purpose, mission, and vision. In fact, values are the bedrock upon which everything else is built. They shape your vision of the future, define your mission in the present, and ultimately drive you towards your overarching purpose. In essence, values are not just part of the organizational structure – they are the invisible force that propels the entire enterprise forward.
Values are the invisible force that propels the entire enterprise forward.
Among other things, Purpose, Mission, Vision, and Values make it possible to formulate strategies, align decision-making, and set your competitive advantage through better organizational performance.
Now, you might be thinking, “Great, I know my Purpose and how to get there. I’ll just pick some nice-sounding values, and the team will follow!” Not so fast. Values need to be lived, not just displayed.
It is worth mentioning here that “what you value” is not equivalent to your “core value.” For example, if you value “innovation,” it should be reflected in your Purpose (why you innovate), your Mission (what innovations you pursue), and your Vision (the innovative future you’re working towards). However, the core value behind your affinity to “innovation” will probably be Self-Direction.
Likewise, commonly touted “excellence” or “teamwork” or “integrity” are not values in themselves. These are admirable traits or principles, but treating them as core values can be counterproductive when trying to build a meaningful company culture.
When values truly permeate an organization, magic happens. Decision-making becomes more consistent and aligned with long-term goals. Employee engagement soars as people feel a sense of purpose and belonging. Customer loyalty increases as they connect with what your brand stands for. And performance? It goes through the roof.
Culture = Values + Practices
But here’s the kicker: This only happens when (1) your stated values align with your actual behaviors, and (2) when the values of the employees align with the organization’s values.
The Role of Individual Values: Because Your Employees Are Human
Individual values are the personal beliefs and principles that guide a person’s behavior and decisions. While Maslow’s needs are more universal and fundamental, Schwartz’s values are broader and more subjective. They’re shaped by a multitude of factors and vary across cultures.
No wonder, values play a crucial role in the workplace. They influence how employees interpret situations, make decisions, interact with colleagues, and approach their work. An employee who values independence (that rolls up into Self-Direction) might bristle at the red tape of established processes, while one who values Security might struggle with a “move fast and break things” culture.
Here’s where it gets tricky: In any organization, you’re dealing with a diverse array of individual values. Your head of sales might be driven by Achievement and Power, your lead developer by Self-Direction and Stimulation, and your HR manager by Benevolence and Universalism. It’s like trying to manage a team where each member has a different definition of success.
Ignoring these individual values in the workplace is a recipe for disaster. When leaders fail to recognize and respect the natural diversity of values their employees may bring to the table, they risk creating a toxic work environment rife with disengagement, conflict, and underperformance. Employees whose personal values clash with the organization’s practices experience moral distress leading to decreased motivation and productivity. This misalignment will cause higher turnover rates as many team members seek workplaces more congruent with their beliefs.
Suppressing or ignoring individual values stifles creativity and innovation, and kills quality.
Suppressing or just ignoring individual values stifles creativity and innovation, which is to be expected. But what’s truly troubling is that quality and safety can plummet to perilous levels, as the Boeing case has recently starkly illustrated.
Some HR practitioners may claim that this diversity of values can be a tremendous asset. My experience shows that they cannot. While it’s true that different perspectives can help navigate complex challenges, misaligned values often lead to misunderstandings. Most teams learn to live with these differences and, if managed properly, avoid overt conflicts. But they also resign themselves to mediocre performance, tacitly accepting it as the norm while “pushing for excellence” in public and in front of their bosses.
Here’s a hard truth: Many leaders understand the role of employee engagement, but in their quest for organizational alignment, they make the mistake of trying to impose a single set of values on everyone. To support the aspired values, they create elaborate systems of rewards and punishments encouraging “correct” behaviours, believing that this will lead to a unified culture.
But here’s the problem: This approach creates only superficial alignment. Employees might display the desired behaviours when the boss is watching, but their underlying values – and thereby behaviours – remain unchanged. It’s like painting your lawn green for a photo-op – it might look lush and vibrant in the pictures, but it’s still dead grass underneath.
Let me share a quick story to illustrate this point. One of my clients, and truth be told, one of the better ones, acknowledged that his team was underperforming, but couldn’t quite pinpoint the root cause of the problem. He was very proud that his middle managers always stayed at work for an extra hour or two. It was a rare case that he was the last to leave the office. I suggested he try leaving the office on time and see what happens. The next day, he left at 5:15 PM – and returned to check at 5:30 PM, i.e. fifteen minutes later. To his total dismay, the office was dead empty. The apparent dedication of his managers was nothing more than a show put on for the boss.
This transactional approach to values alignment might be better than total chaos, but it will never lead to the kind of transformational change that truly great organizations achieve. It’s the difference between compliance and commitment, between “I have to” and “I want to.”
As we wrap up this first part of our series on organizational values, you might be feeling a bit overwhelmed and wondering, “Is it even possible to create true alignment in my organization?”
Only 23 percent of employees worldwide are engaged.
The answer is yes, but it’s not easy. According to Gallup, only 23 percent of employees worldwide are engaged. Since engagement at work and cultural alignment are closely related, this number also gives an idea of how many organizations worldwide are aligned: about 20 percent.
In the next part of this series, we’ll dive into the nitty-gritty of how to actually achieve this alignment. We’ll explore practical strategies for identifying your organization’s true values, communicating them effectively, and most importantly, living them every day.
We’ll also tackle the thorny issue of what to do when you discover that your employees’ values don’t align with your organizational values. Should you try to change their values? Should you change your organizational values? Or is there another way?
Stay tuned for Part 2, where we’ll get into the practical work of building a truly values-aligned organization. It’s a journey that’s challenging, but immensely rewarding – for you, your employees, and ultimately, your business success.