Why Values Aren’t Enough

Here’s something I often hear from clients and connections in the strategy space:?

?? “Brooke, you always hate on ‘value statements’ as strategy. But values are important, right?”

It’s true: I have something of a reputation for railing against those who conflate stated values with cohesive strategies. It’s something you see in all sectors: leadership announces they’re revamping their strategy, only to release a slightly more buzzword-y version of their value statement and then call it a day.?

But it’s also true that values are an important part of any strategy. The question then becomes: where exactly do they fit in??

It’s a question that’s been on my mind for months, and several client conversations recently helped me to clarify a concept of “layers of differentiation” that can provide a proper answer. The way I see things, values form the bedrock for a killer strategy: they guide everything about how an organization acts, what products or services they put on offer, and who they work with. But values are just the bottom layer of this pyramid.?

1. What We Value

First, let’s start off with the most common wrong way to use values in the strategy conversation. That is—assuming that our values are our strategy.

As I’ve written about previously, strategy is about change. Things that don’t bring about change don’t get to count as strategy. On their own, value statements change nothing; ergo, they are not strategy.?

That being said, every organization needs a North Star. Values are the foundations for all the actual strategy decisions we make. They provide a crucial starting point for having all of those strategy conversations, allowing us to make aligned and integrated decisions as a team.

(For strategy geeks out there ??: I mean “foundation” and “starting point” in the conceptual not temporal sense. We can’t just articulate our values, carve those in stone, then move up to the next layer in the pyramid. Rather, all the layers interact with each other, and must be coherent. So in practice, this is iterative.)??

2. How We Act

We’ve established that values are a key underpinning of any strategy. But putting out a statement about your social and ethical commitments (for example) is one thing; putting those commitments into practice is another.?

Luckily, more and more organizations are realizing that their values need to inform their “on-the-ground” behaviours, and they’re taking steps to move from aspirational values we wish we had to actual values we live out.

A key point here is that values need to be more than just “pragmatically applied.” That is, we need to apply our values even when it’s hard—even when they aren’t the path of least resistance. Otherwise, you’re not giving up anything for them, which leads me to ask: in what sense do you value them, if you’re not willing to give anything up for them?

3. What Value We Create

Once we get to the third step, we’re really starting to get into strategic territory. Here, we’re taking seriously what value we create by virtue of the values that we hold. Our activities make change out there in the world. Usually, this is through the product or service that we offer—that’s the thing that we put into people’s hands. But what I mean here is one step further: it’s the value that this offering creates for people, it’s the benefit that they get from taking us up on our offer.

Few organizations starting from values will get this far in the conversation—and those who do generally find it a very short leap to the next and final step.

4. Whom We Serve Best

This is where my recent conversations have been focused, the ones that really helped me to crystalize this structure. In brief, once we’ve articulated which value we create, we can then ask the question: “Which client segments benefit disproportionately from this offering, relative to alternatives (i.e.: relative to other offerings out there in the market, doing nothing, doing it themselves)?”?

This is where the differentiation aspect really comes into focus. It’s not just about having a valuable offering, nor is it just about having a more valuable offering. Strategy is about understanding to whom your offering is more valuable, and to whom it isn’t.

And from this vantage point, we can look back down the cascade and see even more clearly where the previous steps fall short if we don’t go all the way up these steps. Values aren’t very valuable (or very valued) if we don’t care about them enough to put them into practice. Our actions are not strategically valuable if they aren’t generating value that we can exchange with somebody else. And value created isn’t optimized until we understand who benefits from it the most—so we can lean into serving them best, and not get distracted by folks for whom our work is less beneficial.

Key Takeaways

From all this, we can infer a handful of actionable, value-creating tips pertaining to organizational values:

• Talk is cheap. If you don’t put your values into action, they can’t create any value whatsoever, much less a differentiated value. Pro tip: Don’t have your values conversations until you’re ready to change how you act. Otherwise, it will have been a waste of time. Powerful levers for translating values into behaviours include generating shared examples of those values in practice, and integrating them into your performance management & compensation systems.
• Value statements should be differentiated too. If your values could be just as easily held by your competitors, they aren’t helping you to create standout value for your consumers. (Some might be “hygienic values,” like honesty, which are just necessary for any healthy functioning. That’s fine, but don’t expect them to help you win with clients; they’re just table stakes.) Pro tip: Ask yourself whether your competitor could hold the same value you’re considering adopting for your organization. Use the can’t/won’t test here: articulate clearly why your competitors either could not or would not copy you if your success gives them FOMO.
• Use your value statement to narrow your focus. If you stop at articulating what value you create, you can easily end up creating the same value as others out there in the ecosystem. In fact, this kind of thing happens all the time. Pro tip: Focus on the contexts in which your offering is disproportionately more valuable than something similar in your space. This will help you to demarcate the spaces where you have a clear advantage over alternatives.

What this looks like for real

To put some flesh on the bones here, I wanted to share an actual example from Converge.?

What we value:

• Clients’ own insights about their organization and ecosystem
• Strategy that’s focused on change and stripped of buzzwords & jargon
• Meaningful opportunities for the entire client organization to contribute to the strategy AND its implementation AND its iteration (building teams of leaders)

How we act:

We help clients build strategy by:

• Facilitating conversations within client teams (rather than 1-to-1 conversations that we then integrate and summarize on their behalf)
• Maximizing client facetime with a seasoned expert practitioner (Brooke)
• Promoting the social & cognitive dynamics needed for difficult conversations to feel natural
• Crafting our workshop exercises to have strategic insights surfaced and integrated as a natural by-product of the conversation

What value we create:

• Change in the client organization,
• flowing from their competitive advantages,
• led by the organization as a whole rather than just from the top

Whom we serve best:

• Clients who tend to struggle with implementation (due to low engagement with the strategy)
• Clients who have a track record of formulating jargon-y, buzzword-y documents (which don’t actually leverage any differentiation)
• Clients who operate in highly dynamic ecosystems (where informed, empowered teams are better positioned to interpret new signals coming in about market response, competitor counter-moves, changes in the ecosystem, etc., to inform sustained differentiation)
• Clients who want to create a team of leaders in their organization (who resonate with the “lived experience” of building the strategy this way)

??A client who fulfills all of those criteria is a clear winner to work with Converge. In practice, of course, fulfilling any of them is sufficient for Converge to have a competitive advantage, but we have a greater advantage the more criteria are fulfilled.

Wrapping Up

In conclusion: are value statements important? Yes, of course they are.

But values are just one piece of the puzzle. They’re not strategy on their own; they’re just a solid base from which to build a strategy.?

Too often, strategy work stalls out after this first step. Value statements coax out people’s intrinsic motivations and get the team amped about the exciting new things to come.

But they’re not enough to make those things actually materialize. You’ve got to walk the talk, and you’ve got to focus on those folks who derive more from your offering than from other offerings. That’s how values create value.