Unlock new potential: The importance of core values for futureproofing your company
For companies that dare to be different, the importance of core values is fully embraced to achieve long-term success.
Most companies have a core set of values. After all, they’re one of the building blocks for creating a great company culture. Often you’ll see words like integrity, respect and collaboration, sometimes emblazoned on t-shirts or coffee mugs. But not all companies live those values.
Having strong core values—and walking the talk— is more than just some words on a piece of swag. Company values are a living thing that should be reviewed and updated often. They should be used as a guiding force when making decisions, growing the business, attracting new talent and increasing customer loyalty.
Dare to be different
One company that’s made headlines for its core values is Patagonia, a manufacturer and retailer of outdoor apparel and gear for sports such as climbing, skiing and trail running. Among its core values is protecting the planet, which it does by embracing regenerative practices and partnering with grassroots organizations and frontline communities “to restore lands, air and waters to a state of health.” It’s also a certified B-Corp.
Another of its core values is quality: to create products that are long-lasting, repairable and recyclable. This ties into protecting the planet, because the company makes products “that give back to the Earth as much as they take.” Indeed, about two-thirds of its products are made from recycled materials, and any product can be taken in for repairs at any Patagonia store.
But aligning profit with purpose has taken on a whole new meaning at Patagonia with the monumental decision last year to dedicate all future profits to the Holdfast Collective, a non-profit focused on fighting the environmental crisis.
So how’s that going for Patagonia so far?
According to the New York Times, Patagonia is worth about $3 billion. It has one of the largest market shares in the outdoor apparel market, operating more than 70 stores worldwide and selling more than $1 billion of outdoor gear annually. Perhaps most importantly, the company has a loyal customer base — customers know they’re helping the environment when they purchase a Patagonia fleece or backpack.
Strong core values can help to build a brand and, if done with thoughtfulness and authenticity, can build trust with customers, partners and other stakeholders. One study found that B Corp businesses — organizations certified at the highest standards of corporate social responsibility — grew 28% faster than the national average.
Increased workplace engagement, productivity and attracting and retaining employees with the right cultural ‘fit’ can also arise from strong core values. Purpose-driven companies report 30% higher levels of innovation and 40% higher employee retention than their competitors.
Ultimately, doubling down on your core values can give a company a competitive edge and a guide to help scale, grow and diversify.
Ready to do something daring like Patagonia? Stand out from the crowd with these tips:
1. Dare to be intentional with your words
Core values provide guidance in decision-making, from hiring new employees to informing long-term strategy. These core values should still resonate even as a company scales, grows and diversifies, so choosing the right words is important. For example, if “collaboration” is a core value, but the CEO favours and rewards individual achievement, that can create employee confusion and frustration.
2. Dare to be authentic
Words are just words unless they’re backed by action. When creating or updating core values, consider the meaning behind the word. If a core value is “integrity,” what exactly does that mean, and how is that incorporated into day-to-day decision-making? Empty value statements—or worse, misleading or dishonest ones—create the opposite effect, undermining a company’s credibility and alienating employees and customers.
For Patagonia, this meant announcing that it will no longer co-brand its products with corporations. The reason behind the policy change was truly authentic: they believed it was bad for the planet. Patagonia argued that adding corporate logos to garments reduces the lifespan of the item since people change jobs and it’s hard to pass logo’d gear on.
3. Dare to be different
In a study of core values by MIT Sloan Management Review, integrity was found to be the most common value (cited by 65 percent of companies), followed by collaboration (53 percent) and customer focus (48 percent). There’s nothing wrong with using one of those words as a core value, but consider core values that are memorable and differentiate the business.
For example, Build-a-Bear Workshop is a retailer that allows customers to create and customize their own stuffed animals. This company has doubled down on daring to be different by including the very deliberately spelled core values of Di-bear-sity, Colla-bear-ate, and Cele-bear-ate.
4. Dare to align your processes with your values
For core values to be meaningful, they should obviously and intentionally guide every decision, process and policy a company makes. For example, if a company values innovation, it should actively hire, reward, and promote more innovative employees.
When Patagonia founder Yvon Chouinard boldly announced “Earth is now our only shareholder” the company made a very public commitment to its core value of protecting the planet. This meant that 100% of the company’s voting stock was transferred to the Patagonia Purpose Trust, created to protect the company’s values; and 100% of the nonvoting stock was given to the Holdfast Collective.
5. Dare to work with partners who share the same values
Look to work with partners that have a similar mindset and share similar corporate values. For example, when one of our clients, the Institute for the Development of African American Youth (IDAAY), ran into a cash crunch, the Liquid Capital Principal they were working with personally drove down to an event site with the funds the organization needed.
“Liquid Capital has given us the courage to move forward and build our program. Money is needed for everything—and the company has been an enormous help. It’s not just a resource. Unlike the banks, Liquid Capital actually cares. They work hard to build a relationship.” – Archye Leacock, Executive Director, IDAAY
The path to success isn’t easy but when you have honest, meaningful, and, most importantly, actionable core values, you will have a guiding star that can help you take your business to the next level of success.
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