Organizational values: Definition, purpose, and examples

Organizational values impact every aspect of a company, from business conduct to client and staff interactions. They provide direction, foster decision-making, and attract talent by aligning company actions with core principles.

By Douglas Wade, Attorney

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Table of Contents

1. What are organizational values?

2. What function do organizational values serve?

3. Examples of organizational values

4. Establishing and upholding your company’s organizational values

5. To sum up

What are organizational values?

Every part of a company, including how it conducts business, adopts decisions, and interacts with its clients and staff, is impacted by its organizational values. Let’s examine organizational values, including their definition, goals, and examples, before moving on to how to establish and uphold your own.

Organizational values can be defined as the guiding concepts that provide a company with direction and purpose. They support businesses in controlling how they communicate with both clients and staff.

As stated by the video conferencing firm Whereby: Every decision is made with shared values in mind, from all-hands conferences and meetings to monthly evaluations and reviews.

What function do organizational values serve?

To elaborate on the goal of organizational values, let’s continue with Whereby. Whereby has established what they refer to as the Whereby ETHOS, which relates to their corporate culture and principles.

The acronym stands for the following:

Ethically driven: Their ethical obligations are ongoing and measurable. Their goal is to create a business that inspires pride in its employees and raises the standard.

Trust trust: By nature, they have faith. This means starting with the best of intentions and granting individuals freedom and space right away, rather than making them work for it.

Human first: They take into account the complete person, not just their current state or objective. By doing this, they are better able to meaningfully support both our clients and one another.

Outwit and outgrit: To bring about genuine change, we must delve further and think smarter. The qualities that set the undervalued apart are grit, perseverance, and inventiveness.

Selfishly inclusive: It’s not just wise, but morally required to embrace diversity. They want their team to be comprised of all skill sets. Every viewpoint makes them stronger.

An organization benefits from its values in the following ways:

Set itself apart from the competition

Customers, partners, staff, and potential hires see your company differently from other businesses because of its values. As such, they play a significant role in your corporate culture, which is frequently referred to as your company’s personality.

Assist its staff members in making decisions

Your company’s values can give your staff a clear guide on how to behave in different scenarios.

The Whereby values’ “Trust trust” is an excellent illustration of this. Individuals shouldn’t have to earn our trust; it should be given to them right away. People begin with an ample amount of trust, as they stated themselves, which means trusting their knowledge and abilities, the way they think, and their goals.

When managers greet new team members, this can be especially useful information.

Increase the likelihood that it will draw in, hire, and keep elite talent

Candidates are drawn to causes whose ideals they share. A “culture fit” can be ensured by having well-defined organizational values that are expressed in your employer branding initiatives and throughout the hiring process.

This fit works both ways: as an applicant or as a business, you can determine whether or not an applicant would fit in with your culture.

This will lead to some degree of self-selection on the part of the candidates, with some determining that they are not a good fit for your organization. Your company values may be the key to attracting top people for rapidly expanding scale-ups, particularly since you won’t always be able to keep up with the “big guys” on things like compensation and benefits. It’s critical to be (brutally) honest regarding your principles and how you apply them to your workplace. It is important to recognize right away that no company is right for everyone.

Be more likely to draw clients who share your values

Data can sometimes be more persuasive than words. This appears to be the case when it comes to people’s values and shopping habits.

71% of buyers would rather purchase products from companies that align with their beliefs and values. The alignment of values is even more significant to Millennials (83% of them emphasize it and consider it when selecting a company from which to buy goods or services).

Nike is an often used example in this context. When the brand decided to include Colin Kaepernick in its 30-year anniversary campaign in 2018, it took a stand.

To put it briefly, NFL player Colin Kaepernick chose to protest injustice and police brutality by kneeling during the playing of the national anthem before a game. Nike made its firm values apparent by including him in their marketing. While some consumers burnt their Nike apparel in real time on social media and the stock price initially plummeted, many others stuck with the brand because they had similar ideals.

Inform its business planning

Your company’s basic principles serve as a guide for decision-making not just for your staff but also for you as an organization and the path you wish to take. In the end, this advances your company’s commercial success.

As an illustration, consider the following from Whereby: Their values help them identify tools that enable them to outsmart and outgrit to improve their work, whether it’s more accurate, more efficient, or more humane. They also assist them in determining whether partners, platforms, and tools support their objectives.

Increase motivation and involvement among staff members

The Employee Happiness Model outlines fifteen universal components of contentment and engagement among employees.

The four pillars of the paradigm are the people, work, the organization, and the well-being. Every pillar is composed of multiple important drivers.

The company’s vision and principles have a significant role in driving the “Organization pillar.” In this sense, a number of factors have a beneficial impact on employee engagement:

Recognizing the mission and core values
Identifying with principles
Value-conforming behavior is acknowledged

Put another way, employees are more genuinely motivated at work when the organization truly embodies its values and these values connect with them.

Examples of organizational values

A few examples in the form of Whereby and Nike’s organizational values have already been provided. However, there are a ton of others. Although each organization’s values are distinct, they frequently center around a few themes, such as:

Honesty
Creativity
Cooperation
Teamwork
Passion

A selection of well-known corporations’ organizational ideals is shown below.

Netflix

It is well known that Netflix genuinely embodies its corporate values. Thus, the business upholds its principles when it comes to hiring, 360-degree reviews, compensation reviews, etc.

Here’s a picture of what that looks like in terms of high performance, for example. Netflix is looking for stars for every role. Managers utilize a test known as the Keepers Test to make sure of this.

To put it briefly, this suggests that they consider which of their employees they would fight relentlessly to retain if they told them that they were quitting. This approach is consistent with the company’s principles of “courage” and “honesty.”

Buffer

Buffer, a provider of social media management tools, offers yet another excellent example.

‘Default to Transparency’ is one of the ten basic values of Buffer. To attempt to uphold this specific principle, they have been fully upfront about the following:

Pay
Their entire codebase is available for public use
Their roadmap for products
All of their statistics on inclusion and diversity is publicly available

Establishing and upholding your company’s organizational values

In order to demonstrate how to define and live by your corporate values, let’s have a look at some examples of how companies go about things.

While defining the values of your firm, keep the following seven questions in mind.

What is your organization’s mission?

Understanding the mission and vision of your firm makes it simpler to identify the values that will support you in achieving your objectives.

How do you wish to be perceived by others?

It all boils down to what your organization values most. What impression do you want your organization to leave on potential clients, staff members, vendors, and other interested parties?

Asking your present employees what they believe to be the fundamental principles of your business that are already in place can be a good place to start in order to determine that.

At Buffer, they formalized what was already in place by sending out a brief survey to their employees.

How will these principles influence and become ingrained in the operations of your company?

The tenets that direct the activities of your organization are called organizational values. However, how does this appear in real life?

According to Whereby, earlier this year, they introduced their Progression Framework to help the whole team unify on values, skill sets, levels, and other areas. Tools that lead team members through this process and help them evaluate their own performance and objectives are mapped to the company’s values. Furthermore, by being open and honest about their reviews, they make sure that every team member is aware of their present status and the steps necessary to advance in their Whereby career.

What actions will best embody your principles?

It’s crucial to consider your basic beliefs in terms of professional conduct if you want to ensure that they are upheld.

For you, what does this value mean?
What actions serve as examples of this?
In what ways may the company promote this kind of behavior?

This type of exercise is a fantastic way to:

Collaborate with staff members to develop a comprehensive definition of each core value.

Acknowledge and recognize those who already embody the company’s principles within the workplace, and provide examples from real-world experiences.

Discuss as a group how the business might support the personification of the company’s ideals (employee recognition is crucial in this regard).

How will you convey the values of your organization?

After defining your values, it’s important to make sure you share them with those inside and outside of your organization. How will you go about doing this? Furthermore, how will you ensure that they are more than just meaningless words scrawled on a (virtual) wall?

There are several approaches to take in this. We’ll limit our discussion to some instances of internal communication for the time being.

Making brief mention of your corporate values during team or company meetings is an easy yet powerful method to keep them front and center.

Peer appreciation is another technique to spread awareness of your company’s principles. Managers and staff can commend one another for a job well done or for genuinely upholding one or more of the company’s values.

Peer admiration and acknowledgment can take many different forms, both online and off. However, attaching it to something tangible—like an award, virtual badge, real post-it notes, or even a postcard—allows people to witness your values “live” within the company.

How would you codify your organizational values?

Formalizing your organizational values and talking about them openly are complementary practices. Making a succinct values statement is one approach to do this.

Conducting performance reviews in opposition to your values is an additional strategy for formalizing them and inspiring your staff to live by them.

Employee performance at Zip.Co is evaluated using both the “What” and the “How.” The “What,” which stands for 50%, is your accomplishments, such as the quantity of revenue you generated or the code you produced. The remaining 50% is represented by the “How,” which focuses on your methods of operation. Examples include how you’ve improved the game, helped out coworkers, or taken ownership of an issue.

Keep in mind that morals are ever-changing

The Buffer example demonstrated how corporate ideals are continually changing. The same goes for the setting in which your company is run, the employees that you employ, and your own organization.

As a result, it’s wise to stay aware of your basic principles. Make time to consider them on a regular basis and get input from your staff as well as possibly other stakeholders.

Your organization’s values may change subtly. ‘Communicate with clarity’ was originally included as one of Buffer’s organizational values, for example. Following a company-wide review of the business values, this was changed to: “Have a bias towards clarity” since it more accurately represented the organization’s goals and direction at that particular moment.

To sum up

Providing purpose and direction to your organization and its members can be achieved via the implementation of organizational values. Try to get as much input from your people as you can while defining them, and keep in mind that your organizational values will change over time.

Remember to have fun! Together with your staff, decide how you will integrate those principles into your HR procedures.

Have a quick question? We answered nearly 2000 FAQs.

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