To be truly successful, some organizations believe that they must adopt core values that support their mission and vision, shape their culture, and embody their identity. Typically, those values — whether they are to be environmentally friendly, socially responsible, philanthropic, or anything else — will help articulate what the companies are all about, what they do, how they do it, and why.
In an increasingly connected age, what leaders say, and how they communicate and live their company’s values matter. Values-based leadership can help or hinder an organization, from influencing consumers and the company’s bottom line, to its hiring practices. If you want to know if values-based leadership is right for you company, here are some points to consider.
Consumers often make decisions based on their personal view of a company’s values
A company’s values can have a big impact on consumers’ choices, and consequently, its bottom line. Companies that promote their commitment to making their goods at home, for example, benefit from consumers’ desire to keep jobs in the US. Plus, since more than 80 percent of Americans are willing to pay more for products made in the US, it can be a financial boon.
Another example is Chick-Fil-A. Based on its Christian principles, the fast food restaurant famously closes its doors on Sundays — one of the more profitable days of the week for the restaurant industry — and exercises a number of other so-called Christian values. While such practices have alienated some, and led to missed revenue opportunities one day each week, they also resonate with the company’s base. It’s possible that the powerful message that company is sending to consumers outweighs financial gain and that Chick-Fil-A’s most loyal customers simply eat there more often the rest of the week.
Values matter to different degrees to different people. Millennials, for example, report being strongly driven by their values. Nearly 45 percent say they have turned down a job offer because the company’s values didn’t match their own. Meanwhile 56 percent of them say they will never work for specific companies because of the organizations’ values. It’s not hard to imagine that those values also influence their purchasing behaviors, too.
Easier to hire for cultural fit, or are you potentially missing out?
When a company has explicit and specific values, it can be much easier to hire people who are a good cultural fit. Chick-Fil-A, for example, says that its purpose is “To glorify God by being a faithful steward of all that is entrusted to us and to have a positive influence on all who come into contact with Chick-fil-A.” With such a clear message, it’s more likely than not that the company will attract similarly religious candidates. That’s important because finding people who fit is critical for creating a compelling and enduring culture. It’s also one of the hardest things to get right.
Lululemon is known for having built a strong culture around fitness. The athletic apparel retailer pays for its employees to exercise and funds community yoga classes. It wants people who have a particular lifestyle to work there, encouraging them to become Lululemon ambassadors. And while living by those values has helped the company attract certain types of employees, it has also been accused of being somewhat cult-like in the process. Who knows how many great candidates they may have turned off as a result.
What values will your company live by?
While it’s important to have values and to stand for something, that doesn’t necessarily mean that those values need to permeate your business to the extent of some of the examples above. While values-based leadership can certainly be effective, keep in mind that it can also work against you. A good middle ground might be to have values that you support as a business, without necessarily making them a focal point of your business. That way, you can attract candidates who share those values without the risk of turning off others who don’t.
What values does your company espouse to potential employees?