Why you should (and shouldn’t) list “integrity” as one of your core values.

I know, I know. The title of this article seems extremely contradictory. But just hear me out. As you might expect, there are some very good reasons to list “integrity” as one of your organization’s core values. But there are also some pretty credible arguments against including “integrity” on your list of core values.

Before we get into the debate, it might be best to start off with some definitions. Some people describe core values as the non-negotiable characteristics and behaviors that you expect your employees and team members to exhibit while conducting work at your organization. Others describe core values as the deeply ingrained principles that guide all of a company's actions. And still others describe core values as an organization's fundamental beliefs and highest priorities that drive their behavior. Between these three definitions you should get a pretty good idea about the role core values can play in an organization and why so many organizations take the time to articulate, document and enforce them.

Now, on to the debate. Here are some valid reasons why you should (and shouldn’t) consider listing “integrity” as one of your core values.

Let’s start off the debate on a positive note by exploring why it might be useful for organizations to integrate the word “integrity” into their list of core values. Writer

Kezia Farnham gives an excellent summary when she writes: “Integrity in business enhances your reputation?—?which can help attract and retain customers, engender employee loyalty and become a more attractive investment proposition. Business integrity is strongly correlated with financial performance. It can help you steer clear of regulatory noncompliance with its accompanying penalties. All of which are compelling reasons for any organization to prioritize an improvement in business integrity.”

Sounds pretty reasonable, right? This is a crystal clear reason why you should list “integrity” as a core value. But, simply listing “integrity” as a core value in your organization isn’t enough to ensure that your employees will act with integrity on the job. In order for “integrity” to be an effective core value, the characteristics and behaviors associated with integrity need to be cascaded throughout the organization, fully encouraged by the leadership of the organization and enforced through penalties and disciplinary actions for employees who do not respect this core value. Here’s an interesting case study which illustrates this point.

Enron, the Texas-based energy company was once the darling of Wall Street. At one point, the company was ranked as America’s fifth largest company, and was #22 on Fortune magazine’s list of Best Companies to work for. According to CNNMoney, Fortune magazine called Enron ‘The most innovative company in corporate America’ for six consecutive years, from 1995 through 2000. However, things at Enron soon started to unravel.

According to an article on Investopedia: “By the fall of 2000, Enron was starting to crumble under its own weight.” CEO Jeffrey Skilling had a way of hiding the financial losses of the trading business and other operations of the company; it was called?mark-to-market accounting. This is a technique used where you measure the value of a security based on its current market value, instead of its book value. This can work well when trading securities, but it can be disastrous for actual businesses.

The article further explains that, in Enron's case, the company would build an asset, such as a power plant, and immediately claim the projected (not actual) profit on its books, even though it hadn't yet made any money on the investment. And, if the revenue from the asset was less than the projected amount, instead of accounting for the loss, the company would then transfer the asset to an “off-the-books” corporation, where the loss would go unreported. This type of accounting enabled Enron to write off unprofitable activities without hurting its bottom line.

This practice was clearly unethical, which is curious, because Enron listed integrity as one of its core values (the other core values being Respect, Communication and Excellence). Enron is a cautionary tale of what can happen when core values are, instead of being a way of life, nothing but a corporate showpiece. It seems quite clear that Enron employees either didn’t know how its leaders expected them to live the company’s core value of “integrity” in the workplace or didn’t care.

Here’s the reality. If your organization isn’t truly willing to live up to the high standards that come with having “integrity” as a core value, it shouldn’t be listed as a core value in the first place! If you do list “integrity” as a core value, but it isn’t respected or enforced, or if your employees are actually being encouraged to act contrary to that core value, like Enron, the word “integrity” will be meaningless as a core value. Worse yet, having even a single core value that isn’t being adhered to throughout the organization will do nothing but cast a shadow on all of the core values your company claims to follow.

Now, here’s where the conversation about integrity as a core value gets even more dicey!

A few years back, I observed a company (for privacy reasons, I won’t go into?the specifics about the company or the industry it operates in) that found itself in hot water because of the actions of some of its senior leaders who had engaged in what many in the industry would consider to be insider trading. When the press asked a member of the Board of Directors whether the senior leaders had acted with integrity, the Director replied (and I’m paraphrasing here) that integrity in business means different things to different people. This response infuriated the media, other shareholders and the general public.

But… y’know what? She was absolutely correct! Integrity in business does mean different things to different people and to different companies. This statement is not in any way meant to insinuate that the alleged insider trading was appropriate, but it is meant to point out that different people and different companies have varying priorities when it comes to integrity and different ways of demonstrating their version of integrity.

To make sure that we’re all on the same page, it might be useful to define what integrity really is. Integrity can be defined as “the quality of being honest and having strong moral principles.” I think that we can all agree that the word “integrity” has certain characteristics baked into it – like honesty, transparency and honour. But these are “lowest common denominator” characteristics of integrity that most (if not all) can agree on. Honesty, transparency and honour should be considered some of the most basic characteristics that an organization should have in order to even participate in the market.

But “having strong moral principles” (an important aspect of the definition of the word “integrity”) may definitely mean different things to different people. Take the company Patagonia for instance. The company goes to extraordinary lengths to ensure that their manufacturing processes and their products cause as little harm to the environment as possible. They even go as far as offering to repair (for free) any damaged Patagonia products to deter customers from buying replacement Patagonia goods, as repairing and reusing their products would be more beneficial to the environment. Patagonia maintains this practice proudly – even if the company loses out on new sales as a result. This is part of the company’s strong moral principles.

Does this mean that other clothing suppliers like Nike, Reebok and Adidas are not being ethical by NOT repairing any damaged goods for free? Not necessarily. These companies may be expressing strong moral principles in other areas that, when exhibited, don’t cost them sales. Nike’s, for instance, runs several corporate social responsibility programs that, collectively, raise money for the communities in which they operate. These include the NIKE Community Impact Fund (NCIF), an employee-led grant-making program, Nike Community Ambassadors, a volunteer program that has seen more than 14,500 employees serving as volunteer youth coaches in their own communities, and the Nike Give Your Best program, which matches employees’ cash donations towards worthy causes.

Here’s are a couple of other examples. Companies like eyewear brand Warby Parker and Bombas socks express their strong moral principles through their “buy one, donate one” programs. For every pair of glasses that Warby Parker sells, it donates a pair to someone in need. And for every pair of socks that Bombas sells, it donates one pair to someone who desperately needs them, but simply can’t afford them. Does this mean that companies who don’t engage in a “buy one, donate one” program don’t have strong moral principles or aren’t acting with integrity? Once again, not necessarily. Instead of a “buy one, donate one” program, these companies may be finding other creative ways to give back to the communities in which they operate.

Things get even more complicated when we consider that integrity not only means different things to different companies, but integrity also means different things to different consumers –who are increasingly making purchasing decisions based on whether a business’ values align with their own values. In recent years, the market has seen a marked increase in companies like Beyond Meat, Impossible Foods and Slutty Vegan that provide meatless, plant-based foods for consumers who want to lead vegetarian or vegan lifestyles which are viewed by some consumers as being better for the planet. Does that mean that companies that produce meat products are not acting with integrity? Many vegetarians and vegans might say “yes”, but individuals and families leading carnivorous lifestyles would probably strongly disagree.

Similarly, across the consumer market, opinions are split on whether the actions of companies across industries such as food, beverages, pharmaceuticals, beauty and technology are ethical. These observers have pointed to questionable activities along their third-party supply chain that include alleged work practices such as child labor, animal cruelty and unsustainable deforestation to mine raw materials and ingredients for these companies’ products. Yet, some of these same companies may demonstrate high levels of integrity in other areas of their operations, by giving back to their communities or making huge donations to charities.

And herein lies the problem. The way that companies demonstrate integrity and the way that they express strong moral principles may differ from one company to another, from one community to another and from one industry to another. That’s why some companies decide to exclude “integrity” as an individual line item on their list of core values, and instead, choose core values that describe exactly how they express their integrity.

For example, a company whose strong moral principles include having a clean supply chain with fair wages for all workers may opt to have “Respect our partners” as a core value. A company whose strong moral principles include the preservation of the environment may choose to have a core value of “Minimize harm to the environment”, “Protect our ecosystem”, or something along those lines. Companies whose strong moral principles include a belief that work should be enjoyable may include a core value like “whistle while you work” which signals to employees that it is perfectly enjoyable to have fun while on the job. At Blueprint Creative, the agency I co-founded, one of our core values was “Have fun with a smidgen of craziness” because we wanted our team members to be able to work in an environment they enjoyed.

This approach of choosing core values that describe exactly how an organization expresses its integrity and strong moral values takes care of the pesky reality that acting with integrity means different things to different audiences. It also gives the organization an opportunity to say to employees, customers and the wider community “we act with integrity and here’s exactly how we do it!”

So, should you list “integrity” as an individual line item in your list of core values and be very clear with your employees on how they should go about acting with integrity? Or should you omit it from the list and choose core values that provide clarity on how your company acts with integrity? There’s no easy answer because one could easily pull examples of companies which fall into both categories and which act with integrity in their own unique ways.

Whichever direction you decide to go in, one of the most important factors in ensuring that your employees act with integrity is clarity. Employees deserve to have 100% clarity on how the leaders of the organization expect its stakeholders to act with integrity.

For instance, Netflix developed a culture deck that provides employees with much-needed clarity on the expectations that the company had of its employees. The culture deck helped to ensure that Netflix employees knew exactly what types of behaviors were encouraged in the workplace and which behaviors are not tolerated.

At Blueprint Creative, the agency that I co-founded, we developed a core values booklet that was designed to help give our team members clarity on the importance of our core values. The core values booklet provided more than 100 pages of content that detailed what our core values are, why they are important to the company and exactly how team members should live each and every core value in the types of real-world scenarios that our team members would be likely to encounter. Our core values booklet isn’t a bland list of “do’s and don’ts”. The content was designed to be visually appealing and filled with useful tips and encouragement that would inspire our team members to live our core values. We then printed these booklets commercially and gave each team member a copy of the booklet for them to refer to it when they needed clarity on how to live a specific core value in the workplace.

And, other companies find creative ways of ensuring that their employees understand the importance of acting with integrity and encouraging behaviors that are in line with their version of “strong moral principles”. Take the company Tasty Catering, for instance. At any meeting of 3 or more individuals that takes places at Tasty Catering, everyone at the meeting must recite the company’s core values before the meeting can take place. This ensures that before each meeting starts, all team members have their core values at the forefront of their minds

Here’s the bottom line. It is unrealistic (and unfair to employees) to simply list your core values and hang them on the walls of your office without explanation and expect your employees to intuitively know how each core value should be lived. You must take the important step of explaining your expectations to employees, documenting them and making these expectations easy to access.

If you don’t, you could end up as your industry’s version of Enron.

Ron Johnson is the co-founder of Blueprint Creative, the world's first "Bhranding", communications and design agency. He is also the author of the book on branding "Tighten Your Shoelaces".