10 essentials to building a values-driven company
If an organization’s culture can be thought of as its operating system, then its values are the boot code. Values provide a blueprint for how people in an organization make decisions.
While many companies have a values statement posted on their website, relatively few have succeeded in institutionalizing them as part of their operating system. Here, we lay out some common mistakes as well as some key enablers of success we’ve seen high functioning companies implement to achieve this.
Less is more
One of the most common mistakes when it comes to crafting “value statements” is creating too many. One startup we’ve worked with came up with a list of 47 values they felt strongly about as a company. In theory, it might sound better to have a long list to cover many bases, but in actuality, it dilutes their meaning; employees don’t know which values to prioritize. The lack of focus can end up negatively impacting the culture.
As a best practice, we encourage companies to strive to boil their values down to between 3 and 5. The fewer, the better because they’re more likely to be remembered and institutionalized within decision-making behaviors throughout the company.
Avoid generic values
Another common pitfall involves companies aligning on overly generic values. “Integrity, Communication, Respect, and a Commitment to Excellence” are strong values objectively speaking, but their meanings are extremely broad and are open to very different interpretations person-to-person.
Another problem with generic values is that there’s no counter to them. Josh Reeves, CEO & cofounder of Gusto, talks about the importance of being able to argue both sides of a value. You should build a strong point of view for each interpretation or meaning of the word (or phrase) and then clearly define the distinction for what the value means to your company—and what it does not.
“When they’re too broad and aspirational,” Anne said, “they don’t have that necessary tension, and they ultimately don’t help people make good decisions for the business.”
An interesting test here is whether people can identify your company just based on the values. “Be a host” is easily associated with Airbnb, and that is no accident. CEO Brian Chesky attributes strong values to the company’s global success.
Make them memorable
Values are worthless if people don’t remember them when they’re making day-to-day decisions. Jake encourages founders to see if their values can pass the “pop song test.” Are they as memorable as the hook of a pop song such that they become stuck in peoples’ heads?
Look at Twilio for inspiration. They built a set of principles called The Twilio Magic to guide how they act, how they make decisions, and how they win. One of the values, “Draw the Owl,” is well-known even to many outside the company because it is distinctive and memorable. It states, “Draw the owl. There’s no instruction book; it’s ours to write. Figure it out, ship it, and iterate. Invent the future, but don’t wing it.” The concept is that no one knows how to draw this complicated thing, but the idea is just to get started, even if that’s by simply drawing a couple of circles. This concept could be communicated in a lot of ways, but Twilio’s approach just grabs and sticks with you.
Keep values connected to behaviors
The process of clearly defining your core values is critical, but that is just the beginning. In order to make the values come to life, people must know how to act on them.
Communicate what it means for managers and employees to embed these values into their work, their teams, and their goals. And it’s not enough to merely communicate values; these behaviors must be modeled from the top down. The team at the top must lead by example and show what it means to live the values.
To attest to the importance of behavior, Webflow, the no-code website development startup, chose to adopt a list of behaviors rather than values alone. They believe “values mean nothing without action.”
Don’t ignore the shadow side
Just as Newton’s Third Law tells us that in physics, “For every action, there is an equal and opposite reaction,” every value also has a shadow side. It’s important to understand this concept in order to get ahead of how values can be weaponized. You must walk through all of the most extreme scenarios you can envision in order to understand and be prepared to address all unintended consequences.
At Asana, the team has thought through the “shadow sides” of their values. One of Asana’s core values is Clarity; it’s an essential part of what they’re building and how they behave—everyone knows who does what by when. However, when adopting Clarity, they defined the opposite as “Ambiguity” and discussed how Ambiguity could create anxiety and uncertainty among employees who lacked the Clarity they needed.
Asana addresses this as an organization by reminding everyone that there will be times where we don’t have perfect Clarity, and that is okay. In those rare cases, the other values can step in to drive decision making.
Values should form the foundation for hiring
“Be bold and opinionated with your values, especially when you’re hiring. You shouldn’t have to convince people about your values—there’s either alignment or not.” —Josh Reeves, Gusto CEO & cofounder
Just as values dictate what is permitted and what isn’t within your organization, they should also be used to drive who joins it. Including questions around values alignment as part of the interview process helps ensure that your team will make the right decisions even without your presence in every interview.
A word of caution here: Many companies have inadvertently allowed rules around “culture fit” to prevent them from hiring diverse candidates. “Culture fit” candidates may feel and look like every other employee, which can lead to a lack of diversity. In contrast, hiring for values allows for diversity of thought, skills, and background while helping the company align on shared beliefs and practices that set the company on a path for success.
And should continue for performance reviews and informal praise alike
Of course, values should go beyond hiring and form the basis of performance reviews and broader company feedback efforts. Ensure that examples of where people live the values are highlighted in reviews. Similarly, if there are instances in which it makes sense to let people go based on extreme or repeated offenses to the values.
Beyond formal processes, find ways to integrate and celebrate the values into day to day life. You could create Slack emojis that correspond to each value and use them to call out great examples of values alignment. You could find some physical manifestation of your values and give it out for values-exemplifying behavior. In Jake’s first job, one value was personified by bobbleheads of the band KISS. When you walked by someone’s desk that had a whole bands’ worth of nodding heads, you knew they were living the values consistently.
At Emergence, we host LOV (Living Our Values) sessions during our All Hands meetings, where team members can openly share examples of how others have demonstrated Emergence’s core values in their work. It’s a great way to make sure everyone is celebrated across teams.
Values set the tone for DEI
Diversity leads to superior outcomes across almost every business dimension. There are numerous ways for promoting diversity and reducing bias in the recruiting process. Some best practices include as inclusive job descriptions, hiding names while reviewing resumes, sourcing candidates from a broad range of schools and geographies, maintaining diverse interview slates, and including women and minority employees in the recruiting process so that candidates see potential future colleagues who look like them. But diversity in hiring only goes so far if it doesn’t extend to creating an inclusive employee experience. This is where values come in.
For diverse employees to feel comfortable, they have to believe they’re in an environment in which they’re set up for success. This extends to everything from meeting norms to social get-togethers to benefits that demonstrate a company’s values loud and clear. For example, a value around “All Voices Heard” could encourage full contribution from team members in meetings.
The strongest companies establish values that include diversity and inclusion in a way that goes far beyond the superficial photo of a diverse employee on a recruiting page; the best companies give these practices teeth and measure leaders against their ability to not only recruit high-caliber diverse talent but also engage and retain it.
Live your values
This may seem obvious, but everyone looks to you as the founder and CEO to demonstrate how to live the company’s values. There’s no faster way to destroy the trust and commitment from your team than if you—or anyone across the executive or leadership team—acts as if you are exempt. This is especially true in today’s world of social media; every tweet, every post, and every picture should be considered through the lens of the company values.
Every word you say, every decision you make, your employees are watching, listening, scrutinizing, and trying to make sure that they hold you accountable for living the values.
A good exercise to start is to write a list of the things or actions you do in a day with your team that exemplify and demonstrate the values. It’s also worth considering framing major company decisions around the values that led to them.
Values need to evolve with your company
Businesses change as they scale. Teams grow larger, and what worked for a startup will no longer be effective in the next stage. Values need to mature with the company. It’s important to check in periodically with employees, especially the “culture keepers,” such as interviewers, to determine whether the values are still memorable and still resonate.
Design your values with intent. Invest in and operationalize them, measure and reflect, and get feedback. The people that are going to be the most honest with you about whether you’ve come up with a good set of values are your employees, so pay attention to how they’re talking about them and how they’re celebrating them. This will show you if there are any that no longer feel relevant.
This is meant to be an on-going narrative with your team. What works now will not likely work down the road. Values are not meant to be set in stone, so don’t stress about making them perfect. Just start by drawing the owl.
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