This page is a work in progress, part of a multi-year effort to capture and share learnings, frameworks, tools, and processes to run organizations. See Running Organizations for more.

What Are Values?

💡

"I want you to listen to what your conscience commands you to do and go on to carry it out to the best of your knowledge. Then you will live to see that in the long-run—in the long-run, I say!—success will follow you precisely because you had forgotten to think about it" - Viktor E. Frankl (Source: Man's Search for Meaning)

Values are deeply-held beliefs that we prioritize. Core values in an organization are the most deeply-held beliefs that the organization prioritizes.

The right amount of Core Values is anywhere between 3-7. Any more than that, and you've put your ability to operate by them in jeopardy. Any less than three Core Values, and you're underthinking what's important.

"Core Values are the rules and boundaries that define the company's culture and personality, and provide a final 'Should/Shouldn't' test for all the behaviors and decisions by everyone in the firm. It's especially important that top managers lead by example, making sure their behaviors and decisions align with the Values." - Verne Harnish (Source: Scaling Up)

Values Are Core to Meaning-Making

At an individual level, human values are at the core of our individuality as people and core to our process of making meaning in our lives. The traditional view of success and failure often comes down to what we do, and Core Values explain how we do it. At the end of life, I believe that how we did it matters more than what we did.

Values Shape Decision-Making

Core Values, the "how," explain how decisions will come to be in an organization. In a growing organization, Core Values empower everyone in the organization to confidently make decisions. When we get clear on the "how," everyone can make decisions confidently, organizations move more quickly, and people are free from micro-management.

"Once your team has a referenceable shared set of values they can make decisions without you, and more importantly evaluate candidates for culture fit. As the team grows interactions between new hires and the core team, who defined the company values, diminishes. Having a set of established and referenceable values helps disseminate those values to new team members without daily interactions." - Matt Mochary (Source: The Great CEO Within)

Values Protect Employees

Once you've established Core Values, they become a common rubric for how people's actions can be judged. Beyond making acceptable and unacceptable behaviors clear to everyone, they level the playing field. Just as management can use Core Values to hold staff accountable for doing things the right way, staff can call out the CEO and Leadership Team on its behaviors and decisions, too.

"I now believe that values are best when employees can use them against management...The analogy between a company's values and a country's constitution is apt: a constitution - when it's working right - protects the people from their leaders, not the other way around." - Dave Hitz (Source: How to Castrate a Bull)

When Should We Create Them?

You May Already Have Them

In small teams, having the founder(s) create a Core Values document helps guide early organizational culture as it eases decision-making and helps in hiring and firing decisions.

As the organization grows, those values come to shape the culture. But, every new hire shapes the culture as well. When you hit the ~ 20-30 employee mark, formalizing values really starts to matter, and the process becomes much more about listening than about enforcing.

“When you get to around thirty to a hundred employees, that's when you really have to start to formalize the structures and the mechanisms of propagating the culture. Before then, you don't know what the culture is yet, and you're likely going to get it wrong, and you're too adamant about those early values, it's just going to feel false.” - Jeff Lawson, CEO of Twilio

The More Maturity, The More Teamwork

The more mature the organization is, the more teamwork will be required in formulating Core Values. The founder and the leadership team are no longer in control of shaping - the organization has taken on a life of its own. Creating Core Values is a process of listening, advocating, and discovering.

🧰

In Tribal Leadership, Gordon Binder of Amgen described the process of creating core values in a large organization, teaming up with one passionate middle manager to hold individual interviews with 400 employees and focus groups to discover their seven core values.

How to Create Values

Understanding Personal Values

You can't understand an organization's Core Values without understanding a single person's values. After all, organizations are collections of individuals. Understanding values is an inquiry process, not a creation process.

What Are Your "Rules"?

We all govern our lives by "rules" we've created or inherited along the way. Many of these rules are "below the surface." We operate by these below-the-surface rules often without knowing that that's what we're doing.

Dan Shipper breaks down how your rules are actually the way to understanding your values:

"The best way to find your values is to start with the rules themselves...They point the way to what’s most important to you. For example, if you have a rule like, 'If I don’t completely pour myself into my work, it won’t be any good', it probably means that you care deeply about creating high-quality work. It also means that because of your life experiences you’ve learned that following this rule is the way to accomplish the thing you care about." - Dan Shipper (Source: Perfectionism: Why and How to Beat It)

What Are You Proud Of?

Tribal Leadership suggests asking open-ended questions, specifically "What are you proud of?" to get at what a person deems most important.

"After a few open-ended questions, you'll find the reason that accomplishment gives the person pride is that it's helped people, supported the family, or made a difference for someone. In short, you'll find that the pride ties actions to values, and you'll learn what those values are."

Who Are Your Teachers & Role Models?

Brie Wolfson suggests journaling on your teachers, role models, mentors and villains and thinking about what they taught you to understand values.

"When it comes to your teachers and mentors, consider what they taught you and why you think their teaching style allowed you to learn so well from them. When it comes to your role models, consider what about their work or their approach to it, is so appealing to you. And since no one is perfect, what would you change if you could?" - Brie Wolfson (Source: Finding Person-Problem Fit)

Creating Core Values

Jim Collins Breakout Session Process

Jim Collins uses a 45-minute meeting to work through Core Values. His full process is on his website here, but here's my summary of his process:

🔨

Core Values Process via Jim Collins

Each person read to the group his or her list of core values. Based on these readings, determine the three to five values shared as most core to your breakout group.
Each individual takes 5-10 minutes of solo time to test each of the three to five values against the following test questions.

If you were to start a new organization, would you build it around this core value regardless of the industry?
Would you want your organization to continue to stand for this core value 100 years into the future, no matter what changes occur in the outside world?
Would you want your organization to hold this core value, even if at some point in time it became a competitive disadvantage—even if in some instances the environment penalized the organization for living this core value?
Do you believe that those who do not share this core value—those who breach it consistently—simply do not belong in your organization?
Would you personally continue to hold this core value even if you were not rewarded for holding it?
Would you change jobs before giving up this core value?
If you awoke tomorrow with more than enough money to retire comfortably for the rest of your life, would you continue to apply this core value to your productive activities?

Each member of the group list for the group the core values to which they answered “Yes” to all of the questions.
Select the values deemed by your group to be truly authentic core values. As a general guideline: a value is truly “core” to your group if two-thirds of your group members answered “Yes” to all of the test questions for that core value
Do a final check on the core values to ensure that none of them fall into the category of “aspiration for the future” rather than authentic core values. Note: people frequently confuse timeless core values—what you truly believe and have always believed at a deep core level—with aspirations of what you’d like to see the organization become in the future

Assessing values against criteria is a great way to analyze whether a value just sounds nice or "seems right." Having individuals complete parts on their own helps avoid long, inefficient discussions.

A CEO Only Does Three Things Process

🔨

Trey Taylor’s process from his book "A CEO Only Does Three Things":

Facilitate a high-level discussion in which each person is encouraged to give voice to the most important behaviors they see at your company. Do not share your list but instead lead the team in brainstorming theirs.
Give them some prompts, like: "I like that we _,” and “We always _ ," or "We are known for __”. As each person shares, thank them for the idea and resist the urge to consolidate or combine ideas: let each submission live on its own for now.
As with all brainstorming sessions, having a fixed time limit will yield better results. Set a timer and keep the feedback quick and the discussion minimal.
This exercise will yield between ten and thirty behaviors. Examine each behavior and determine what underlying belief gives rise to it. Beliefs that drive behaviors, we call values. List your values, consolidating where you see overlap.
Recognize that those things that your values are not ones you perform with perfection 100 percent of the time. They can be aspirational and include things that reach for and sometimes fall short of. That said, the list shouldn't be a wish list on which you note what you want to be true but isn't. With practice, you can develop a dynamic tension between what is true, and what is becoming true.
For each value, ask: "How confident am I that the whole team lives this value every day?" Assign a score between 0 percent and 100 percent.
Those values that you grade above 85 percent are the true values of your Culture. Those scoring 75 percent or higher are aspirational - values that only some people follow. They do not currently define your Culture. Any scores below 75 percent are not contributing values to your Culture, but normalized behaviors of a handful of people.

Eliciting behaviors is a nice shortcut to getting to values. Scoring behaviors helps align a group without opening up an endless discussion.

Managing For Happiness Process

In Managing For Happiness, Jurgen Appelo suggests a process in which the leadership team and the wider management group separately work on Core Values. He suggests using words from a pick list and using dot-voting to narrow the list.

🔨

Jurgen Appelo’s Process:

Collect stories of past behaviors that you feel exemplify and illustrate the culture of your team or organization.
Print the big list of team values, one copy per person, and let each team member pick core values and wish values, based on the stories you've collected.
Ask management to do the same, and compare the results. Choose a final set that everyone can agree on, both employees and management.

Collecting stories will have other cultural value, and will get people contributing quickly. A big list of team values is so helpful, as sometimes it's hard to find the right words.

Four Obsessions Process

In The Four Obsessions of an Extraordinary Executive, Patrick Lencioni details a process where the leadership team discusses employees who "best embody what is good about the firm."

🔨

Patrick Lencioni’s Process

Think about the two or three employees whom they believe best embody what is good about the firm. These would be people whom they would gladly clone again and again, regardless of their responsibility or level of experience.
Write down one or two adjectives that describe the employees they selected. Usually a relatively short list of common or related terms surfaces.
To help them solidify their thinking, I then ask them to identify the one or two employees who have left the firm, or should leave the firm, because of their behavior or performance. Coming up with these names never seems to take long... Write down one or two adjectives that describe the people... Almost without fail, the same adjectives appear on most team members' lists, and these often embody the antithesis of the company's fundamental values.

This process is an easy way to get people to contribute quickly. It may be effective as an add-on to one of the other more detailed processes here.

Twilio's Process

Jeff Lawson, CEO of Twilio, assembled a cross-functional group of a dozen employees to work on core values creation for the company.

🔨

Jeff Lawson’s Process (Source: The CEO Test):

He brought them together over for a dinner and put the challenge to the group: "It's time that we articulate the values of the company - our job is to figure out what makes Twilio Twilio and put words to it."
That brainstorm led to a list of about a hundred ideas. Lawson then did some work on the list himself, grouping the words into clusters that spoke to different ideas and sharpening some of the language.
He brought the group back together twice more to help edit the new versions, and then presented them with a list of a dozen values for a final winnowing, asking each member of the group to vote on the ones that they thought were spot on and the ones they could live without.
Lawson wanted the process to involve a key group of employees who would champion the values among their colleagues; he had them unveil the values at a company all-hands meeting.
This process uses a cross-functional group of people who care and will likely commit and help uphold whatever the final output becomes. It gives ownership to that group rather than "from on high." It avoids a series of endless meetings and has a clear accountable and responsible party at the top of the organization.

CEO Tools 2.0 Process

CEO Tools 2.0 uses a group process and has values "compete" against one another in a tournament bracket.

🔨

CEO Tools 2.0 Process

Gather your people together in groups of no more than twenty to twenty-five. Ask them to share what they think the company’s core values are. Define values as those things that are most important to the organization or the team. Record the answers in a vertical column on a flip chart. When all responses have been written down, each one will compete against all the others, like in a tournament bracket.
Compare each word to the next one in the list.
Vote on which word is a better description of a company value. Write the winning word in a new column to the right of the first column.
After the first round, any eliminated words may be added back by suggestion of the group.
In the next round, compare the adjacent words again. After this round, words can be added back only by a majority vote.
In the third round, compare the adjacent words again. After this and any subsequent rounds, words can be added back only by a unanimous vote.
The exercise is complete when there are five or six words remaining. These are your core values.
The next step is to define each word and its practical application in the company.

Examples of that "tournament bracket" are here.

This is collaborative, and fun and can accommodate large groups in the creation of Core Values.

Good Practices, Bad Practices

Consider Using Phrases

You can use phrases rather than just a single word to apply more detail to a given value. A complete phrase can also explain how that Core Value fits into your organizational context. You can use operating principles for the latter problem, but if you can give more clarity within the Value itself, why wouldn't you?

"It's not enough to say, 'We value truth.' Rather, you must craft a statement that illustrates the context surrounding the value. This statement should capture why you have this value as seminal in Culture. It should illustrate how this value is expressed in the behavior of your People." - Trey Taylor (Source: A CEO Only Does Three Things)

Avoid Common Mistakes

Basic Human Decency Doesn't Count

Values that parrot basic human decency aren't reliable guides for behavior in an organization. Words like "honesty" and "integrity" don't say a whole lot and therefore can't guide action. For specific behaviors, Operating Principles can help (we'll cover Operating Principles in the next section).

"Reasonable people can disagree on what "respect" or "excellence" looks like in practice. Instead, companies need a behavior code that details how people should make decisions, especially in thorny situations." (Source: Primed to Perform)

If you can't imagine operating by the inverse of the value, it's not a good Core Value. Taylor Pearson drives the point home in his article What Is Company Culture & Why Is Culture Important? by explaining that Enron's stated values were Respect, Integrity, Communication, and Excellence - wholly insufficient values for creating a healthy culture.

Don't Run a Survey

Surveying the entire staff sounds like a nice idea, but it's likely to be a waste of time. You have to balance the best of what the organization wants with what your Leadership Team will fully commit to. If Leaders don't commit 100% to live your Core Values, then they'll undermine your culture before you've committed those values to paper.

How to Operate By Values

💡

"In the short run, values often feel painful, but they encourage you to act in ways that work out better in the long run." - Dave Hitz (Source: How to Castrate a Bull)

Reinforcing Core Values

The critical challenge with core values is finding ways to keep them top-of-mind and to make them part of your day-to-day operations. core values should be present in every corner of your physical organization - the files you use, the software you log into, and the physical office space. They should also be highlighted on an ongoing basis as a part of your operating rhythm.

Integrate Them Into Files

Have a graphic designer make them transmissible and available for many mediums. Find ways to integrate them into your core documentation:

Template Headers & Footers
Hiring Documentation
Onboarding (i.e. Culture Deck)
Employee Handbook
Leadership/Management Meeting Agenda Docs
Knowledge Base
Quarterly Planning Docs
Monthly/Quarterly Reviews, Annual Reviews
Website, Sales Decks, Marketing Material

Highlight Core Values Weekly/Monthly

One way to keep them in front of you is to plan to highlight one core value each month in your regular meetings, and train and reward on that value.

A value as simple as "autonomy" is chock-full of learnings; you could host a workshop on thinking independently, stages of adult development, etc. As you dive deep, you may find other ways to reinforce or turn that value into behavior and create operating principles to use going forward.

Turning Values Into Actions

💡

"Values and behavioral norms are not transmitted by talk and memo easily, but by doing and doing visibly." - Andy Grove

Getting values documented everywhere and highlighted in your operating rhythm is just the first step. Turning them into specific behaviors is how you truly integrate core values into the culture.

"Do they breathe? Are they part of your ethos and your DNA? Are they brought to life in behaviors, observable actions, how you communicate, and the behaviors you celebrate? That is what differentiates an amazing culture from a terrible culture.” - Christy Lake, Chief People Officer, Twilio (Source: The CEO Test)

Interview Questions

Build core values-related questions into each stage of your interview process. If your values are well-documented publicly, candidates should be familiar with them before they speak with you. Instead of asking directly about a person's values, craft behavioral questions to elicit responses that speak to your core values.

Performance Management

Ensure that your performance management system includes peer-based feedback on your core values.

Peer Recognition

Take the heat off of management by integrating core values into your peer recognition tools - Kudos, High-Fives, or otherwise. When your staff begins to celebrate and uphold your values for you, you've built a reinforcing loop.

You can also call out specific values-based peer recognition in weekly staff meetings.

In Big Decisions

Your core values are your heuristics for decision-making. Communicate in your decision-making documentation which core value you used in coming to a big decision.

You should also look for ways to tie new initiatives, new policies, and new products (and their announcements) back to your values.

What Are The Penalties for Non-Compliance?

You have to be willing to fire over core values. You have to be willing to be humbled by employees when you fail to live up to them.

Stories In Quarterly and Annual Reviews

Collect and tell stories about how your core values and how they played out in this past quarter or year in your Quarterly reviews and Annual reviews. You can use shorter stories in monthly or weekly meetings.

"The values are also reinforced through stories, creating culture heroes whose behavior is celebrated at quarterly and annual awards. Each year, for example, Twilio hands out "Superb Owl" awards to employees who have been role models for the values." (Source: The CEO Test)

Revisiting Core Values

Core values should be revisited on a regular basis. Gathering feedback from employees using surveys or town hall meetings is a good step. Here are two ideas for revisiting and improving your core values over time:

"Values Day" - A yearly company-wide day where everyone is invited through playful or introspective activities to revisit the company purpose, values, and ground rules and inquire how they as a team live up to them. (Source: Reinventing Organizations)
Values Meeting - Every two months, all colleagues join a values implementation meeting where people can bring up issues with the values in the workplace or suggest changes to the Bill of Rights and Responsibilities (Source: Reinventing Organizations)

Lists of Human Values

There are tons of Google results for "human values," or "core values."

🧰

Here are a few list-of-lists of human values:

James Clear has a good list here
Brené Brown has a list here.
Management30 PDF list here.

Core Values