How To Use Company Values To Increase Team Performance
The shift to people-centered leadership - A four step framework to align company values with purpose, performance and behaviours.
Why we need company values?
We all know high performing employees are looking for more than a job when it comes to choosing a place to work. The shift to purpose along with profit is ringing loud and clear.
Millennials now make up approximately 50% of the workforce and in a Deloitte Millennial Survey of 2018, 40% of those polled said they believed the goal of business should be to ‘improve society’.
The impact of just a profit focus? In 2019 we saw the Banking Royal Commission take aim at the behaviours from some our country’s largest organisations. Instead of focusing on the what they did wrong, lets look at the 6 principles Commissioner Hayne identified for going forward:
- Obey the law
- Do not mislead or deceive
- Act fairly
- Provide services that are fit for purpose
- Deliver services with reasonable care and skill
- When acting for another, act in the best interests of that other
Yet when we look at the company values of these organisations, we see words like integrity, collaboration, excellence, accountability, respect, do the right thing, and service.
Clearly there is a disconnect between the company values and everyday behaviours. You can be sure every employee will see through this disconnect which not only makes the values meaningless but also strips employees of a vital tool - the framework needed to make decisions. This means employees can’t get a sense that their decisions will be ‘right’ or ‘wrong’, leading to a fear of decision making or erratic outcomes. It’s simply not conducive to attracting and retaining top talent.
Banks make a good case study, but they are not alone in the challenges of an operating model that balances profit with purpose.
Balancing values with performance
Consider for a moment, what do the words profit and purpose mean? They make sense at the company level, but can feel intangible when it comes to the practical everyday.
These words become more meaningful if we think of profit as ‘the what’ (what outcomes we are looking to achieve) and purpose as ‘the how’ (how we go about achieving the outcomes). For centuries we’ve had performance management structures in place to measure and improve ‘the what’ through every layer of the organisation. Now we’re faced with the challenge of doing the same for ‘the how’.
This is where company values come in, but this time it needs to be for real.
Follow this 4-step process to make company values real in your business.
1. Capture company values
There’s an important difference between defining your values and identifying your values.
“Defining” your values should be done by a small, core group of people - usually the founders, CEO and key people. As Patrick Lencioni mentions in his HBR article , defining values is not a democratic process because this would include suggestions from many employees who probably don’t belong at the company in the first place.
Defining your values is not about reverse engineering a statement to fit everybody; it’s a statement of what your company stands for that allows people to identify if their personal values are aligned.
When you get a strong alignment of your company values with a prospective employee’s personal values, it’s like love at first sight - you become attractive as the place they would like to work with, and commit their efforts to.
“Identifying” values is a process you might undertake if you have a great culture that has evolved by accident without having defined a set of values. In this case you might want to involve many employees to help embody your way of working into a defined set of values.
The size of your organisation will drive how you go about this process. You might invite employees to write down their perception of the company values on post-it notes and have them stick these to a values wall - once everyone has had an opportunity to contribute, the post-it notes can be grouped to identify the 3 to 5 common themes.
Alternatively, you can go digital and share a poll which generates a word cloud - we quite like Mentimeter for this purpose.
Test your values
In either scenario we suggest avoiding values that describe basic human characteristics that you would expect from any person you meet on the street - these are too generic, don’t create a calling, and don’t differentiate you from every other business.
It’s also important to avoid aspirational values of what you would like to be, values are about who you are. Communicating ‘aspirational values’ as ‘company values’ is a common mistake that can cause confusion and disconnect on many levels.
People should feel so strongly aligned with company values that if the company acted against them, they would likely move on and seek out another company with values that more closely match their own.
And as a company, there should be very little tolerance for employees that aren’t aligned with your values (no matter how well they perform).
2. Define behaviours
Leading companies don’t stop at step 1. They work with their employees to define both the supporting and detracting behaviours that go with each value. This will bring more depth and meaning to how your team expect the company values to show up in everyday actions.
For small to medium size organisations, you might identify a set of behaviours for each value that applies to the entire organisation. For bigger enterprises it might make sense to define a different set of behaviours at the department or business unit level (but still against a consistent set of company values).
Page 9 of our Continuous Performance Playbook has a template and some tools for capturing values and behaviours.
By defining the supporting and detracting behaviours you are setting the foundations for:
- The behaviours to strive for and the behaviours that are not acceptable
- Measurement, recognition and reward of the right behaviours
- A reference point for coaching conversations when behaviours don’t align
This exercise can be extended further by labelling the behaviours with your own narrative. There’s a story in Daniel Coyle’s awesome book, The Culture Code (Highly Recommended!) on p.203 about a New York restaurant that has labelled behaviours with terms like ‘Loving Problems’, ‘Athletic Hospitality’, ‘Writing a Great Final Chapter’, ‘No Skunking’… where each label creates a memory model.
eg. No Skunking means don’t spray negative energy into the workplace, as skunks do when they are frightened
See how Crewmojo brings our customer’s values to life in the platform .
3. Develop guiding principles
While defined behaviours deliver all the benefits mentioned above, another key outcome of company values is to help employees easily make the ‘right’ behavioural decisions everyday and in the moment.
We’ve seen some organisations create a simple test, aligned with their values, that employees can apply when faced with any decision.
Rotary International created the four way test where members ask themselves:
- Is it the truth?
- Is it fair to all concerned?
- Will it build goodwill and better friendships?
- Will it be beneficial to all concerned?
Another example might be:
- Is it fair?
- Would a teammate ask you to do it?
- Would a customer ask you to do it?
And we’ve even seen this type of test appear in schools too:
- Is it safe?
- Is it fair?
- Would an adult ask you to do it?
4. How to bring company values to life, everyday.
So far we’ve done a good job of defining our values and how we might test our decisions. But let’s be honest, the hard part is making sure this is not a one-off, feel-good event that gets forgotten after a few weeks.
We recommend a multi-layered approach so if one falls down it doesn’t mean the whole program fails. HRTech tools like Crewmojo make this easy and transparent but the processes can be achieved manually too.
Feedback and values badging
Create a concept of ‘values badges’ and encourage employees to badge their co-workers with a value when sharing praise or feedback. HRTech does make this easier but we’ve also seen Deloitte do a great job with post cards printed up with a value on each card - these cards can be picked up by any employee, a personal message added and passed to another team member.
Integrate a ‘values and behaviours’ discussion with your manager-employee 1-on-1 meetings.
It doesn’t have to be on the agenda every week, but at least half-yearly or triggered by a notable behaviour (good or bad). We understand these types of conversations can be confronting for some participants, so we favour an approach that’s not threatening for the employee and not awkward for the manager. A simple framework where the manager asks:
“Regarding our company values and behaviours, how do feel you are tracking? What behaviours might you continue, start and stop?"
This opens the door to a more forward-looking conversation and is an opportunity to provide coaching feedback on a more frequent basis relating to company values.
It’s also going to help capture notes on the topic that will feed into a more accurate performance review at the end of the performance cycle.
Think back to when remarkable things have been achieved that exemplify your company values, then capture the stories.
Stories are engaging, memorable and easily shared. Include these stories in your onboarding process, coaching meetings and other moments that matter.
Open up opportunities such as a ‘all-hands meeting’ to capture more of these stories and weave them into the everyday.
If company values and the way that people go about achieving their goals are important to an organisation, the behaviours should feature as a big component of the performance review. The work you do in the first two steps makes it much easier to create review questions and performance rating scales that align tightly with the desired behaviours.
You then need to consider how much weight you apply to ‘behaviours’ versus ‘outcomes’ or goal achievement. We are seeing a 50:50 weighting common to many organisations. In another example Atlassian go for an even 3 way split across:
- Expectation of Role
- Contribution to Team
- Demonstration of Company Values
Examples of company values
At Crewmojo we created a video that communicates our personality along with our values underneath.
Netflix became famous for their culture deck which they’ve iterated into this culture page .
This process creates a systematic approach to setting expectations, measuring, recognising, coaching, and rewarding for behaviours that are aligned with your company values.
With this 4-step approach your company values will be a daily focus for employees and a competitive advantage for your organisation.