Do your businesses core values really impact your bottom line?

The answer is yes. The  core values of your business define who you are and what you stand for, and they help drive the way you act. According to New Zealand’s only Gazelles International certified business coach, Leigh Paulden, this directly impacts your profitability. 

So, what really are your core values, and how do you make them work for your business? 

“They are the essential and enduring beliefs of your business. Your core values are a handful of rules you have clearly defined and your team live by regularly. It’s what your people should and shouldn’t do,” Paulden says.

“When the entire team is clear about your core values, it improves your culture, and it’s easier to move the organisation from good to great.”

The simplicity of core values and the impact they have on a company’s bottom line should not be ignored, he adds. So spending a small amount of time to clarify your values is worth the effort.   

Here are five actions to help your businesses live by your core values: 

1. Articulate your handful of handful of rules (not too many).

2. Make them visible.

3. Share and repeat them often (regularly) within the organisation.

4. Give recognition for core values lived by a team member.

5. Live by them yourself. 

 

Remember, core values are NOT who you want to be as an organisation, they are who you are today. Core values do not add value if the behaviour of those who typically have the most power in organisations do not demonstrate them at work. Remember, a core value is only a true core value if it has an active influence and if the people or company live by it.

“I often see companies post core values that define who they want to be, but then live quite differently. This will turn off team members and create a gap of credibility between leadership and team members. It is also obvious to clients, suppliers, and can create the wrong perception or a distrust of your company, damaging your ability to grow, and potentially your reputation.”

In order for a core value to stand, it must withstand some important criteria and tests, Paulden says. “When looking at these tests take your time and really think of this situation in your company."

 

The three simple tests of a core value: 

1. Would you fire a team member who consistently or blatantly violated one of your core values?

2. Would your company be willing to take a financial hit (lose money) in order to maintain the integrity of a core value? 

3. Is this core value alive among your team today? Can you identify the name of a team member that is living out the core values? 

 

Core values should not be kept a secret; they should be visible to employees, customers, potential employees, partners, etc. Sharing core values internally and externally in a visible means manages expectations of everyone in how work will be accomplished.

“Most companies have not stopped to clearly define their core values, but they do exist and you probably operate by some of them each day – what you need to do is identify them and then share these values.” 

Paulden says 95 percent of American companies have not stopped to define their core values or are not living them.

“This statistic is amazing when its well known that successful companies are clear on their core values and live by them. Underpinning your entire strategy for growth should be your core values.”

 

Core values are all about people and how they conduct themselves, so it’s essential to have a team where everyone lives effortlessly by your values.

“When you have people that fit, who have the same core values and are aligned to where you are going, a huge amount of the people issues disappear. When it is clear how someone should act, they have the permission and ability to perform better, which also provides managers more time to manage.”

Paulden recommends that when an organisation is hiring staff, the core values should be visible to the applicants. “The questions an organisation asks right at the front of the interview process should be questions to drag out a person’s core values. If an applicant’s values do not align with your company’s, stop. They are not going to fit in your organisation and will cost you time and money,” he advises.

Core values help manage performance expectations of all employees, including new staff who may become acquainted with core values as part of their induction process. “Clarify the behaviours that everyone is expected to uphold at work. Provide a framework for decision-making and agreements about how people are expected to interact with each other.”

So core values are not just a wall poster, they are a framework for building a great culture and profitability. 

 

Leigh Paulden is the only Gazelles International certified business coach in New Zealand. As managing director of Advancing Businesses, he works across the country with companies serious about growth. Visit http://www.advancing-businesses.co.nz/