Maximizing the Impact of Core Values in Corporations

We had been sitting in this beautiful, bay window framed meeting room of a tech company. The head of HR had invited me to discuss possible interventions to revitalize middle management engagement in this company. 

Our rapport, honed from prior collaborations, set the stage for an insightful exchange.

It took only 30 minutes for the meeting to take a very interesting turn to say the least, but we will come to this a bit later.

Before such meetings, I delve deeply into what I call the company's “DNA”. This includes information such as

• The history of the company
• The founder’s backgrounds and intentions 
• The core business model
• Its purpose and vision,
• And notably, its core values. 

These elements paint a vivid portrait of the organization's authenticity as a living entity.

Indeed, organizations - though not biological beings - pulsate with life on a systemic and energetic level.

This vitality arises from the collective influence of the living beings who lead and populate these entities, shaping their culture and direction.  

So whenever there is a lack of engagement or a similar issue most likely there is an inauthenticity, a mis-alignment in the above information to be found. 

For the purpose of this newsletter let us focus on values, more specifically core values, those guiding principles that anchor a company's identity and permeate its every action. 

I add the word “core” to refer to the top 3 to max. 5 values that guide us most.

Typically these core values are showcased proudly on the company's website, interwoven into its mission and vision or to be found in the “About” section. 

These values represent the guiding principles that an organization commits upholding. They permeate every facet of the organization's activities, illuminating its endeavors and serving as beacons to steer both the company and its employees in their actions and interactions within the workplace.

As humans, our values are shaped by a complex interplay of factors including our upbringing, cultural influences, and inherent personal traits. 

Once ingrained, these values tend to be stable. They evolve only gradually over time, often taking years, if not decades, to undergo significant change. 

Typically, it's profound experiences or a series of impactful events that prompt us to reassess our values, leading to potential shifts in perspective and the adoption of new beliefs. 

However, for some individuals, steadfast adherence to consistency may hinder such transformations.

Every organization traces its roots back to its human founders. It is through these visionary individuals that the core values and ethos of the company are initially established. 

This intrinsic connection between founder(s) and organization underscores the profound impact of personal values on corporate culture.

Consider Tesla's core values such as 

• taking risks, 
• doing the best/exceptional work 
• sustainability 

are values deeply ingrained by its founder Elon Musk.

Similarly, Patagonia, the outdoor apparel company, upholds values like

• Quality
• Integrity 
• Environmentalism
• Justice,

mirroring the personal value evolution of its founder, Yvon Chouinard.

Or from my own experience working for Red Bull, I remember the following situation: I was walking through the head office in Fuschl am See, Austria, at about 2:30 pm on a super windy and sunny Friday afternoon. 

I turned a corner and was bumping into Dietrich Mateschitz, the company's founder and owner. With a knowing smile on his face he asked me: “What are you still doing here, why are you not already out on the water?” 

He was aware of my passion for windsurfing, the weather conditions were ideal, the head office located next to the lake, and his encouragement to go out on the water reflected the synergy between his two values: “having fun” and “doing great work”. 

This ethos is still embodied in the company's mantra: “Giving wings to people and ideas”.  

And indeed, many of my most inspired ideas for Red Bull were conceived in the proximity of the ocean or atop snow-capped mountains, amidst the camaraderie of fellow sports enthusiasts.

Yet, maintaining alignment between stated values and organizational conduct isn't always seamless, particularly during transitions from founder-led to manager-run entities. 

As shown, the founder(s) automatically fueled their set of core values in the cooperation. And it attracted those who can identify with these values. 

However, a switch in core values, though not stated on the company's websites and its brochures, very often happens in the transition from a founder owned to a manager run company. 

This was precisely the case with the company I referenced earlier. Following the appointment of a new COO with a strong emphasis on short term profit maximization emerged a stark misalignment between the company's stated core values and its operational strategies.

Despite noble values being proudly displayed on the company's website and brochures, the divergence between rhetoric and action became glaringly apparent. 

Middle management, keenly perceptive to this internal shift, experienced the repercussions firsthand.

So, what lessons to learn from this? How can we effectively leverage company values? Allow me to explain by shedding light on two divergent approaches:

𝐓𝐡𝐞 𝐃𝐚𝐦𝐚𝐠𝐞 𝐨𝐟 𝐌𝐢𝐬𝐚𝐥𝐢𝐠𝐧𝐞𝐝 𝐂𝐨𝐫𝐞 𝐕𝐚𝐥𝐮𝐞𝐬:

• Values merely stated on the outside but not lived internally
• Lack of leadership alignment - especially on the top level - with core values
• Inclusion of value buzzwords (like inclusion, respect, diversity, sustainability) without genuine integration
• Core Values change in short periods of time (e.g. every 2-3 years), neglecting their deeply rooted foundation

𝐓𝐡𝐞 𝐌𝐚𝐱𝐢𝐦𝐮𝐦 𝐈𝐦𝐩𝐚𝐜𝐭 𝐨𝐟 𝐀𝐥𝐢𝐠𝐧𝐞𝐝 𝐂𝐨𝐫𝐞 𝐕𝐚𝐥𝐮𝐞𝐬:

• Inside-out alignment of stated values and actions
• Values emerging from the organization's DNA and to be further developed from there
• Reasonable adaptation of core values over time (e.g. every 5-10 years)
• Giving clear “Do’s and Dont's” examples of how these values are to be interpreted in concrete situations 
• Attracting the “right fit” of people to work for the company. 

To conclude, how did the meeting go after the 30 minutes mark: Well, I extended an invitation to the HR representative for an open, honest discussion about my observations regarding the organization's dynamics. 

With a nod, she agreed, and within ten minutes, she sat before me with tears brimming in her eyes, expressing a need to postpone our conversation.

"Of course," I reassured her.

That postponed conversation never happened. Instead, my next interaction with her revealed her departure from the company.