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Why are values important – and why do so many companies get them wrong?

Every major company has a set of values on its website, but why do so many find it hard to live up to them?

Every major company has a set of values on its website, but why do so many find it hard to live up to them?

By Tim McEwan, Managing Director, Sheffield Haworth Leadership Advisory

“P&O ferries appalled most of the UK after sacking 800 staff via a Zoom call,” reads an article in the  Mail Online. This anger is just the tip of the iceberg when it comes to the appalling PR fallout of P&O’s recent laying off of 800 employees.

What makes this callous-seeming decision just that little bit worse is that it goes against the firm’s own “Shared Vision & Culture” statement:

“We are committed to a positive and just corporate culture, based on inclusion and the power of diversity. We operate with integrity, trust and respect for each other — communicating, coordinating and collaborating while seeking candour, openness and transparency at all times.”

Let’s consider for a moment the huge gulf between this statement and the company’s apparent treatment of the 800 employees it fired remotely with no warning. This is just a particularly recent – and particularly dramatic – example of companies espousing values that they don’t live up to. It proves the vital importance not just of having a clear set of values, but of believing in them, reinforcing them, and making them a reality.

Why are values important?

One of the excuses P&O has given for the abrupt firing of so many staff at once was financial. They were struggling and needed to cut costs. On the face of it, that’s a fine argument. However, one of the reasons why companies have values is to act as a guide for making difficult decisions, and particularly so in hard times.

Another company, facing high costs and considering sacking staff, would have looked at its values and asked the question:

If we fire these people with no warning, would that be treating them with integrity, trust, and respect?

They would perhaps have acted differently as a result. We can all intuit another obvious benefit of having a set of values to live by. Had P&O acted differently – for example by giving their staff more warning, or seeking ways to fire fewer of them – they PR fallout and damage to their brand would have been far less.

So let’s summarise and add a few more reasons why values are important:

  • The act as a handrail to guide difficult decisions.
  • They can protect your brand reputation and reduce bad PR.
  • They can help you to attract and retain top talent in a fiercely competitive marketplace where top people want to work for companies whose values they believe in.
  • They can help you to attract more prospective clients – who want to know they are working with value-driven, purposeful organisations.

Not all values are created equal

It’s clear why values are important. Sadly, it’s equally clear that many companies have value statements purely as PR exercises or as a kind of value washing. Employees, customers, and even shareholders can tell when there’s an incongruence between what a company says and what it does, and they all find this frustrating. 

As Sigmund Freud once said: “We leak the truth from every pore.” You can pretend that something’s important to you for a while but over time – or under pressure – what comes out is what’s really important. This appears to have been the case for P&O.

So, how can we rectify this problem and avoid this risk of “value washing”?

The first step is to consult widely within your business when creating these values. Top-down values decided by leadership without consultation do not always ring true for the wider organisation. Consulting with employees, by contrast, will give you a sense of what values are actually being lived already, and what your people believe in. Consultation may also give you a sense of what’s missing.

Whatever the outcome, the process of consultation is essential to get buy-in from your people. They know you are crafting a new set of values and they will be happier and more likely to buy into them if you ask for their views.

Reinforcement, reinforcement, reinforcement

Having consulted and crafted a set of values your people can really support, what effective organisations do is reinforce their values in various ways:

  • Measuring your people against your values and holding them accountable to them – for example by incorporating the values into performance management processes.
  • Constantly communicating the values internally, even to the point of over-communicating.
  • Testing the values periodically by checking in with employees on whether the values are still relevant, how well they are scoring against them, and whether they need to be changed or evolved.

Look again at the P&O example. A company that acted incongruently with its espoused values. The congruence lies in the execution. If you say you want to be the best, you become the best. If you say you want to have integrity, you must show integrity through everything you do. If you say that you care about your people, then everything you do must demonstrate that.

It’s not just the statement of values that’s important, but in the lived experience of the statement. Do you do what you say you will do? In the end, that’s the most important question.