by Amelia Friedman
Republished from Harvard Business Review, April 13, 2018
When Tony Hsieh, founder of Zappos, was asked what he’d do differently if he could restart his company from scratch, he responded with this: “If I could go back and do Zappos all over again I would actually come up with our values from day one.”
Developing your corporate values early in your company’s history can have a lasting and positive effect on your organization and its culture, and it’s easier to do when your team is small. After all, it’s much easier to steer a four-person speedboat than a 2,000-person cruise ship. Once your team grows larger, it may be challenging to reach consensus around what your values should be.
I’ve worked with a handful of small organizations as they’ve established the cultural tenets of their business — most recently, I went through the process of developing corporate values at my own tech startup. When we first drafted and integrated our values we were a four-person team. We spent a few weeks developing our corporate values together, discussing how the values should be interpreted (and hence applied), and then integrating them into our processes and culture. A year later, we’re 21 people and growing, and our team still references these values multiple times a day.
Whether you’re running a startup or a small business, here’s how you can do the same.
Develop your corporate values together
Drafting a values statement in a silo and then mandating the team follow it is rarely effective. A person can’t just be told what to find meaningful — a values system is something that you develop over the course of years, and it is not easy to change overnight. In my company’s case, we included everyone on our small team in the process so that we could tap into values that people already held and uncover core values that we, as an organization, were already living. This helped us avoid those aspirational but essentially meaningless values that leaders often impose on an organization in an attempt to re-sculpt culture. Values unveiled with everyone participating are more likely to be unique to your company — and differentiated values are correlated with better performance.
Give folks the opportunity to reflect and contribute thoughtfully. We started the process by reflecting independently on our existing (and yet unspoken) corporate values, as well as our opinions on the values systems that would be best suited for our company. We asked all team members to start thinking about questions like: What do you value? What unspoken values have contributed to our success to date? What do successful employees share in common? What values should govern the way we interact with each other and with our customers? We sent over a complete list of these questions a few days before our scheduled meeting.
Get all ideas out there. And then organize them. When we sat down together, we started by listing all of the potential values on a whiteboard. This was an independent exercise with everyone scribbling across the board at the same time, and whenever marker movement slowed, I would deliver another prompt to spur more ideas. After 15 or so minutes (when we were out of suggestions), we asked everyone to pull out a sheet of paper, independently select ten values that they thought would resonate, and rank those values in order of importance to them.
Collaboratively identify a shortlist of values. We compared our lists and assigned point values to each value — if a value was #1 on a person’s list, it was given 10 points; if it was #10, it received 1 point; and so on. We looked at the numbers, discussed our reasoning, and used the point sums to begin to create a short list. From there, we had an open conversation about what we valued as a company. General themes emerged from our lists, and we uncovered and discussed areas of disagreement. After an hour of discussion, we ultimately agreed on seven core values.
At the time, there were only four of us and we were fortunate to reach consensus relatively quickly (and to uncover values that continue to resonate a year later). For some teams, an hour won’t be enough, however, and you may need to take time to reflect and reconvene several times. Or this may be an activity you do at a full-day offsite. For mid-sized teams, this activity might be undertaken by a handful of key employees, ideally with representatives from different departments. And, while at some companies values will be cemented at your first meeting, at others a shortlist may be fodder for discussion and final decision by top executives. Either way, key team members have been included and thereby will be more likely to champion the chosen corporate values.
Discuss interpretation
Understanding what your chosen values mean is critical to implementation. In fact, an employee who knows and understands their corporate values is 51 times more likely to be “fully engaged” at work.
Once your company has its list of values, set aside time to discuss what each value means to you and to your teammates and how each one could and should be applied in your everyday work. Keep in mind that even the most well-intentioned employee may misunderstand or misapply a value — what’s obvious to you now when you’re well-ingrained in the process may not be obvious to an employee that joins the team two months later. Take the time to explain what each one truly means.
For this discussion, focus on addressing questions like:
- What does this value mean to us?
- What does it look like in action?
- How might it be misinterpreted?
- How will we evaluate adherence to it?
- How will it change our relationships or our interactions?
Try to synthesize your shared understanding into clear, direct explanations of how you will see, experience, and live those values in the workplace. Take the value of “respect” as an example. What does that look like at your company? How will your employees demonstrate their respect? Who will they be respectful of? How will that change their everyday behavior?
During this process, task a team member who everyone trusts with compiling notes, and then send them off to nail down the precise wording and interpretations. Word choice is important since it will affect how the values are read and interpreted. Circulate an early draft among your team and then meet to discuss and finalize a few days later.
You may need to go through this process a few times — draft, meet, discuss, modify, redraft, and repeat — before landing on an interpretation that everyone can stand behind. That’s OK. The more thoughtful and intentional this process, even if it’s slow, the better.
Integrate your values
Posting your values in your break room isn’t nearly enough. It’s critical to identify any changes you’ll make or practices you’ll adopt to support their integration.
In our case, our “maintain a growth mindset” value led to the addition of independent learning and professional development goals into our quarterly review process. Now everyone is asked, “What will you learn?” at the beginning of the quarter, and then held accountable for those commitments three months later. Part of our interpretation of our “results-oriented” value was that “we limit meetings to those that create value,” so all team members were immediately asked to revisit their schedule, and to shorten or eliminate meetings where possible.
Bring together your team again to draft a plan for integrating your values. Go one by one to determine how they might become a part of your culture, or how you might build a rewards system that better aligns with them. At bigger companies, you might invite all executives and managers to build independent integration plans within their teams, or for individuals to submit their own personal integration plans.
Look for ways that you can integrate values into hiring practices, orientation and onboarding, performance bonuses, and promotion opportunities. Be sure to highlight employees who are living examples of the values, and reinterpret the values for different situations or departments, as we did for our customer service team. And, allow your values to evolve over time. Once a year, you might bring together a group of stakeholders to discuss your values, and determine whether your interpretations (or then values themselves) might need revisiting, or how you might even better integrate them in the coming year.
Thoughtful, well-implemented values can serve as the foundation for a positive, high-performance culture. It’s worth taking the time to get everyone on the same page by establishing corporate values, developing a mutual understanding of them, and then making them an integral part of your everyday work experience — and this is all much easier to accomplish when your team is still small.