How values-based leadership drives company culture and why it matters

cul·ture
ˈkəlCHər/
noun
Merriam-Webster
c: the set of shared attitudes, values, goals, and practices that characterizes an institution or organization a corporate culture focused on the bottom line

A company’s culture is driven by the leader of an organization and the most successful organizations are led by a values-based leader. Someone who knows what’s really important to them and who uses their values as a guide and motivator – a leader who walks the talk and demonstrates their commitment to company values. A values-based leader is described as one who lives intentionally using their values as the touchstone to define actions, make decisions and fulfill mission.

So why is this so important? In a time when companies are being asked to increase profits and attract and retain top talent, it is imperative to define and live core values. The research shows there is a direct link between individual and organization success and living within a company’s value system.

It begins by identifying and acknowledging one’s own deeply held values. This increases self-awareness which is critical to working with and leading others. When we know our core values, live into them and understand the values expressed by others, we are more likely to be led to success in an empowering way.

In addition to knowing one’s personal values, it is important to define a company’s value system. Organizations that invest the time and effort to identify their core values create a strong company culture resulting in increased employee fulfillment, customer satisfaction and shareholder value. When the organization is transparent about its value system and uses it as their True North, an environment of trust and confidence is created with employees. It also serves to unify employees around a common purpose and philosophy of doing business.

When the value system is embedded into the overall management philosophy, it results in a strong and enduring company culture. An important step is to fully incorporate the values system into the recruiting and talent management process. It needs to permeate the entire culture to include employee development, training, performance reviews, compensation decisions, succession planning and it must also be integrated into corporate events.

A corporate vision is an integral part of the values proposition. Effective leaders must deliver an inspiring vision, which the entire team connects with day to day. Leaders must talk about their values out loud. This increases accountability among the entire team. Bottom line, employees demonstrate greater commitment and dedication to the organization when their leaders are transparent and live their values.

The organizations with a common set of values that are practiced, in our experience, corporately develop a culture of accountability. The commitment to a value system serves to strengthen the company’s culture, increases role clarity, retention, productivity and serves as a long-term benefit.

While it is important for a leader to understand the values expressed by all members of the team, there are times when an employee’s values are not in alignment with the organizations. When an organization is new to the practice and setting up their value system, it becomes clear when individuals are not in values alignment with the company. In these cases, the individual has the choice to adapt or transition to another organization to which they more closely align. Neither the individual nor the organization is served when values are not in alignment.

In my experience, the best leader I worked with was a true patriot and someone who declared his values and lived them on a daily basis. In return, he developed an exemplary leadership team that was committed in the toughest of circumstances. We knew our team’s core values and they guided our big and small decisions every single day. He was a text book example of a values-based leader whose transparency increased employee’s willingness to go above and beyond to meet the mission.

Another values-based leader I worked for inspired trust at all levels in the organization and he always did the right thing. He kept us aligned to our vision with the foundation being the company’s core values. As a result, the work environment was filled with trust, clear communication and the drive to a common purpose. He motivated us to think beyond ourselves which fostered an environment of individual and corporate success.

Today’s successful organizations have a strong and well-defined company culture. In Building a Values-Driven Organization Richard Barrett (footnote 1) shows categorically that values-driven organizations are the most successful organizations on the planet. His research of over 2,000 organizations shows values and behaviors drive culture, employee fulfillment, customer satisfaction and ultimately shareholder value.

Richard Barrett’s (footnote 2) research, and that of others, shows a strong link between financial performance and the alignment of an organization’s cultural values with employees’ personal values. When an employee understands their most deeply held values, they serve as motivators, creating stronger personal and professional connections with others and the organization. Quite simply, it is easier for us to align with people and organizations with similar values and it creates numerous possibilities for individual and company productivity.

In summary, the key to addressing many of today’s challenges resides in building a strong company culture and it starts with identifying personal and organizational core values. Leaders who embrace a values-based system both personally and for the organization are ensuring the success of their people and organization.

1 Richard Barrett, The Importance of Values in Building a High-Performance Culture, 2010.
2 Richard Barrett, Building a Values-Driven Organization: A Whole System Approach to Cultural Transformation, Boston: Butterworth Heinemann, 2006.