The Most Effective Way to Create Powerful Core Values That Make an Impact

“Culture eats strategy for breakfast” is a quote made famous by the late, great management guru Peter Drucker. What Drucker intended with this saying is not that strategy is unimportant, but that without a defined and healthy culture, you won’t execute your strategy properly. Core Values set clear expectations for desired behaviors and those that you won’t tolerate. On our signature One Page Strategic Plan (OPSP) tool in the Scaling Up Growth Platform, Core Values hold a foundational place of honor on the left side of the plan, with Purpose adjacent at the top and Core Competencies anchored at the bottom. Together, these components form what we call the CORE, and they actually resemble the letter “C” when highlighted on the plan. These are the “forever” elements that constitute your firm’s DNA. They’re elements you want to consistently test and apply, adjusting them only sparingly and with deliberation. They serve as your company’s North Star and timbre. Changing these strategic elements haphazardly would be a surefire recipe for losing your way, both internally and in the marketplace.

For many executives, Core Values may sound “soft” and evoke images of trust-fall exercises and existential questions like, “Who am I?” and “Why do I exist?” This perception stems from past experiences with Core Values development exercises that were poorly constructed, misguided, or misunderstood. In such cases, leaders (and consultants) tend to strive for political correctness, resulting in generalized, pleasing-sounding platitudes and word salads such as “everybody matters,” “family,” “communication,” “do what is right,” “openness,” and “respect.” For instance, integrity is a very common core value, often making up a significant portion of companies’ core values. Please don’t misunderstand; integrity is a crucial value to pursue — it deserves a permanent place on the United Nations Security Council of Core Values for any organization. Integrity is also on our list of Core Values! The key is to precisely define what integrity means within your organization. Otherwise, it becomes nebulous. For us, the behaviors driven by integrity include:

• Do what you say you will do
• Meet commitments
• Tell the whole truth — no deception

We live integrity and we use it to evaluate our success with clients and within our team.

Many companies encounter an issue when they attempt to engage in corporate virtue signaling. They try to portray themselves as excessively moral. This leads them to adopt Core Values that are generic, ineffective, lacking believability and buy-in, and challenging to implement. This happens because they make the mistake of creating aspirational Core Values rather than discovering authentic ones. Consequently, these wimpy Core Values remain vague notions and principles to live by, seemingly suitable for any company. In reality, this broad applicability makes Core Values lackluster and unhelpful.

In this age of artificial intelligence and tools like ChatGPT, some misguided business leaders and consultants even delegate the development of these crucial strategic tools to a machine! This is the job of Real Intelligence (RI). In our +15 years of experience in executive business coaching, we can confidently assert that teams with poorly defined and poorly understood Core Values tend to struggle.

Part of the reason for this struggle is that weak Core Values often appeal to B Players and the B Player leaders who devised them. These individuals tend to embrace ambiguity and shy away from clear distinctions. Weak Core Values attract affable underachievers who thrive amidst the vagueness of values like “empathy,” “care for others,” and “save the planet.” While these values may sound admirable if you want to showcase your virtues and channel your inner Gandhi, they don’t serve as effective Core Values.

As mentioned at the outset, Core Values need to serve as “bright lines” to encode the types of behaviors you want in your business. You’re delineating the operational DNA for your team. They should be used as the acid test to determine if someone is successful or not.

I have long said that Core Values are the true operating system of your business. Specifically, they need to act as decision filters. Well-constructed Core Values serve to guide you in determining which business opportunities to pursue or pass on. They inform you about which operating behaviors are appropriate and should filter who fits and doesn’t fit into your culture. Ultimately, they guide your decisions regarding relationships with employees, customers, and suppliers, determining which relationships to initiate and which to terminate.

Core Values are discovered, not invented. You can’t become something that you’re not. Again, that zen-like existential process that many hack consultants advocate or asking ChatGPT to generate a list (from who knows where) won’t yield Core Values that can effectively drive the operating system of your business. Natalie Dawson, the author of TeamWork, provides one of the most valuable and practical processes for generating Core Values:

1. Identify people from your past with whom you genuinely enjoyed working. Scaling Up calls this the Mission to Mars exercise — who would you want to take with you? What were the outstanding qualities of those team members? Did they consistently deliver results? Were they adept at planning and executing their strategies? Were they consistently punctual and ahead of schedule? List ten to fifteen characteristics that stood out in those team members.
2. Now, think about colleagues you found challenging to work with. What were the characteristics that rubbed you the wrong way? Did they take credit for others’ work? Were they evasive when it came to quarterly plans and accountability? Reflect on their less desirable traits and jot down ten to fifteen characteristics you would prefer not to encounter in your business.

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