Organisational Values - Are They Needed?

Don't you love those values listed on huge eagle pictures on the company wall, like integrity, and no one lives and breathes them? They are just eagle pictures.

Do values matter? I think you know what I am going to say here....

Organisational values are essential because they are the foundation for shaping the culture, guiding decision-making, and aligning employees' actions with the organisation's mission and vision. Here are key reasons why they are needed:

1. Direction and Clarity: Values provide a clear sense of direction. They define what the organisation stands for and what behaviours are expected from everyone, from leadership to frontline staff.
2. Decision-Making: Values are a moral compass for decision-making, especially in complex or challenging situations. They help leaders and employees evaluate choices through the lens of shared principles.
3. Consistency and Trust: When values are well-defined and followed, they create consistent organisational behaviour. This consistency builds trust with employees, customers, and stakeholders.
4. Employee Alignment and Engagement: Employees who feel aligned with the organisation’s values are likelier to be engaged, motivated, and loyal. It gives them a sense of belonging and purpose, knowing they are part of something bigger than themselves.
5. Cultural Cohesion: Strong values help shape the organisational culture, fostering a sense of unity, collaboration, and mutual respect among team members. This cultural cohesion can drive better teamwork and overall productivity.
6. Brand Identity and Reputation: Values influence how an organisation is perceived externally. Companies with strong, positive values tend to attract customers and partners with similar principles, enhancing brand reputation.

Without clear values, an organisation can lose its sense of identity and purpose, leading to inconsistency in operations, reduced employee morale, and a lack of trust from internal and external stakeholders.

It is our thing at LeadershipHQ and we LOVE building great leaders!

What happens when Organisations don't espouse their values

When organisations fail to espouse their values, several negative consequences can arise (and we have seen it!):

1. Erosion of Trust: Employees, customers, and stakeholders may lose trust in the organisation if its actions don't align with its stated values. This disconnect can create a sense of dishonesty or hypocrisy.
2. Low Employee Engagement and Morale: When employees see that the organisation is not living up to its values, it can lead to disengagement, decreased motivation, and lower morale. Employees are less likely to feel a sense of belonging or purpose.
3. Reputation Damage: External stakeholders, including customers, partners, and the public, may view the organisation as inauthentic, which can damage its reputation and brand image.
4. Increased Turnover: Employees who care about values-driven work may leave the organisation, leading to higher turnover rates. This can also make it harder to attract new talent, particularly those who prioritise working for value-driven organisations.
5. Inconsistent Decision-Making: With a clear commitment to values, organisational decisions can become more balanced and driven by short-term goals rather than long-term principles, leading to clarity and misalignment.
6. Culture of Cynicism: When values are not lived out, cynicism can develop among employees. People believe the organisation only uses values for PR purposes rather than genuinely integrating them into its operations.
7. Decreased Customer Loyalty: Customers are increasingly drawn to organisations that share their values. Failing to live up to these values may result in reduced loyalty and loss of market share.

In short, not espousing values can lead to a breakdown in trust, disengagement from employees, and potential harm to the organisation's long-term success.

For external customers, when an organisation fails to espouse its values, several specific issues can arise:

1. Loss of Trust and Credibility: Customers quickly notice when a brand needs to practice what it preaches. This misalignment between stated values and actions can result in a loss of trust, making it difficult for customers to believe in the brand's promises.
2. Brand Loyalty Decline: Modern customers often align with brands that share their values. If an organisation fails to follow its stated principles, customers may feel alienated and less inclined to remain loyal. They may switch to competitors, demonstrating a more authentic commitment to shared values.
3. Negative Word of Mouth: Disappointed customers are likely to share their online and offline experiences, which can damage the organisation's reputation. Negative reviews and social media backlash can spread quickly, potentially leading to a broader customer base viewing the company unfavourably.
4. Decreased Customer Engagement: Customers may become less engaged with the brand if they feel the organisation needs to be more authentic. They may reduce their interactions, stop following the company on social platforms, and engage less with marketing campaigns.
5. Higher Expectations for Accountability: With the rise of socially conscious consumerism, customers expect organisations to espouse and act on values. When these expectations are unmet, customers may demand accountability, often through public channels, leading to pressure on the company to make changes.
6. Sales Impact: A potential decrease in sales is a direct result of lost trust and declining loyalty. Customers may choose not to purchase from a brand they see as misaligned with its values or acting unethically.
7. Increased Scrutiny: Once customers identify that an organisation is not living up to its values, they may begin to scrutinise its actions more closely, making it harder for the organisation to regain credibility in the future.

In summary, failing to espouse values can lead to lost trust, loyalty, and reputation for external customers, ultimately impacting customer retention and sales.

Organisations can effectively espouse their values by consistently integrating them into their culture, operations, and stakeholder interactions. Here's how they can do this:

Lead by Example:

Leadership must embody the organisation's values in decisions and actions. Leaders set the tone, and employees are likelier to follow when consistently demonstrating their values. This also applies to transparency and accountability from the top.

Hire and Promote Aligned with Values:

Hiring practices should reflect values by selecting candidates whose personal values align with the organisation's values. Similarly, promotions should be based not just on performance but on how well individuals live out the company's core principles.

Integrate Values into Daily Operations:

Values should be woven into everyday processes, from customer interactions to internal meetings. For example, decision-making frameworks and operational strategies should consistently reflect the core values.

Communicate Values Clearly:

Regular internal and external communication is essential to reinforce what the organisation stands for. This can include storytelling, branding, and company-wide messaging that emphasises how the values guide the organisation's actions.

Reward and Recognise Value-Driven Behaviours:

Recognising and rewarding employees who exemplify the organisation's values helps to reinforce their importance. This could be through employee recognition programs or performance reviews that assess how well individuals align with core values.

Create Policies That Reflect Values:

Policies around customer service, ethical behaviour, diversity, and social responsibility should directly reflect the organisation's values. When policies and values align, it strengthens the culture and sets clear expectations for behaviour.

Consistent External Actions:

Organisations should ensure that their outward-facing actions, such as marketing campaigns, customer service, and community engagement, reflect their values. Authenticity in these areas builds trust and credibility with customers and stakeholders.

Incorporating values into all facets of the organisation creates a cohesive and authentic culture that employees and external stakeholders can trust and engage with positively.

What are Hidden Values?

Hidden values are the unspoken or implicit beliefs and principles that guide behaviour within an organisation or group, even though they may not be explicitly stated. These values can emerge from the culture, actions, or decisions within an organisation, often influencing behaviour that may not align with the organisation's officially stated values. Here's how hidden values manifest:

1. Cultural Norms: Hidden values often reflect the unwritten rules of how things get done in the organisation. For instance, while a company may officially espouse teamwork, a hidden value might be individual competitiveness if employees are rewarded primarily for their personal achievements.
2. Decision-Making Patterns: The way decisions are made can reveal hidden values. For example, if decisions are consistently made to prioritise short-term profits over employee well-being, a secret value of profit over people may be at play, even if the official stance emphasises employee care.
3. Reward Systems: How organisations reward their employees can reveal hidden values. If promotions and recognition are consistently tied to working long hours, it suggests that the company values productivity over work-life balance, even if the official stance promotes balance.
4. Conflict Between Stated and Hidden Values: Hidden values can often conflict directly with an organisation's stated values. For instance, a company may claim to value innovation but have a risk-averse culture that discourages employees from trying new things. This creates a disconnect between what is said and what is done.
5. Leadership Behaviours: Hidden values often stem from leadership actions. If leaders consistently model certain behaviours (like focusing on profitability over ethical considerations), those behaviours become embedded in the organisation's hidden values, influencing the entire culture.

How Hidden Values Emerge:

• Past experiences within the organisation may reinforce certain behaviours, leading to the creation of hidden values.
• Inconsistent enforcement of official values allows hidden values to grow unchecked.
• Unspoken expectations that aren't addressed openly may lead to behaviours that deviate from the organisation's declared values.

Understanding hidden values is essential for diagnosing potential cultural misalignments and ensuring that the organisation's practices align with its intended mission and values.

Why are Values important

Values are essential for individuals and organisations because they guide decision-making, behaviour, and relationships. Here are several reasons why values are imperative:

Guiding Decision-Making: Values help individuals and organisations make consistent, principled decisions. They act as a moral compass, guiding choices even in complex or challenging situations. For example, if an organisation values integrity, it will be transparent and honest in its business practices, even when difficult.

Shaping Organisational Culture: Values define an organisation's culture. They influence how employees interact with each other, customers, and stakeholders. A robust set of shared values fosters a positive, cohesive workplace culture where people understand what behaviours are expected and encouraged.

Building Trust and Credibility: When values are consistently espoused and demonstrated, they build trust with employees, customers, and external stakeholders. People are likelier to trust and engage with an organisation that aligns with their values, creating stronger relationships and customer loyalty.

Enhancing Employee Engagement: Values can give employees a sense of purpose and belonging. When their values align with their organisation's, they are more likely to feel engaged, motivated, and satisfied with their work, leading to higher retention and productivity.

Driving Long-Term Success: Values provide a foundation for sustainable success. Organisations prioritising long-term values like ethical behaviour, customer focus, and innovation are better positioned to navigate challenges and opportunities while maintaining their reputation and market position.

Creating Consistency and Alignment: Values ensure consistency in behaviour across the organisation. They create alignment between the organisation's vision, goals, and everyday actions, which helps to unify teams and align strategic objectives with daily operations.

In summary, values are crucial because they shape identity, guide actions, foster trust, and ensure long-term success by providing a consistent framework for behaviour and decision-making.

Values must be espoused for internal and external customers.

Values must be espoused for internal?and?external customers?to ensure alignment, consistency, and trust.

Organisation Customers (Employees):

1. Guiding Culture and Behaviour: Espousing values internally helps shape a positive organisational culture. Employees understand the behaviours expected of them. It promotes a unified approach to work, fostering collaboration, respect, and accountability.
2. Employee Engagement and Satisfaction: When employees see that the organisation is organised by its values, they are more likely to feel engaged, valued, and motivated. This leads to higher job satisfaction and lower turnover rates, as employees feel their work is meaningful and aligned with the company's purpose.
3. Leadership Consistency: Values provide a consistent framework for leadership. When leaders embody the organisation's values, trust, and credibility, they encourage employees to follow suit.

For External Customers (Clients and Stakeholders):

1. Building Trust and Loyalty: Customers and stakeholders are likelier to trust an organisation which promotes consistency between its values and actions. This trust fosters loyalty and strengthens long-term relationships.
2. Brand Reputation: Values play a significant role in shaping how external customers perceive the brand. When an organisation delivers on its values, it enhances its reputation, attracting customers who share similar values.
3. Customer Experience: External customers experience the organisation's values through employees, products, and services. When those values are consistently demonstrated, this leads to a positive and memorable customer experience.

Conclusion:

Values must be visible in both internal and external interactions. Internally, they guide behaviour and culture; externally, they build trust and foster long-term customer relationships. Organisations espouse their values to create a cohesive environment where employees and customers feel aligned with the brand's mission and purpose.

How can we help!

Find out more at -

LeadershipHQ—We are deeply committed to our clients' success. You won’t have to deal with the egos of large consulting firms—your success and progression are everything to us. In our work, everyone feels safe and inspired. Our experienced and passionate team provides tailored solutions and continuous support to achieve sustainable, impactful change in your organisation.

Sonia McDonald—Sonia is a leading motivational keynote speaker, award-winning author, podcast host, CEO, and advisor on leadership, neuroscience, and courage. She will rock your next conference, workshop, or event!

The Leadership Collective - Building a community – a collective of leaders from diverse backgrounds, experiences, and perspectives coming together to inspire, support, and learn from one another. Membership for individuals, teams and organisations committed to outstanding leadership. Join today and be part of a global community dedicated to outstanding leadership and culture.