Strategic Planning: Building to Endure by Codifying Your Company’s “Core Values”

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If you’re launching a strategic planning effort in your company, the first step to be completed – assuming you haven’t done so already – is a careful statement of your company’s “core values.”  Since, to some, the term “values” suggests abstraction, we find this task strikes some business people as a bit “squishy” or “touchy-feely.”  However, no less a hard-nosed business type than Thomas Watson, Jr., the founder of IBM, had this to say on the subject:

 “I firmly believe that any organization, in order to survive and achieve success, must have a sound set of beliefs on which it premises all its policies and actions . . . .  I believe the most important single factor in corporate success is faithful adherence to those beliefs.”

 Core Values:  Essential, Abiding Principles

An organization’s core values are its essential and enduring beliefs, not to be compromised for financial gain or short-term expediency.  Affirming or re-affirming your company’s core values at the outset of a strategic planning process is an indispensable, foundational step.  It serves to remind everyone of the core principles that must underlie everything you are about to plan for and, hopefully, execute.

The core values you affirm should be relatively few in number.  Otherwise they’re not really “core.”  They should be reflected in the way you conduct your business, make decisions, treat each other, formulate policies, etc.  Otherwise, you’re just paying “lip service” to them. Conversely, a company that lives up to its core values is said to “walk the talk.”

Here are a just a few quick examples of corporate core values: “respect for the individual” (IBM); “innovation,” (3M); “speed, simplicity, self-confidence, and a hatred of bureaucracy,” (GE); and “dynamics, performance and aesthetics” (BMW).  Of course in a US, political context, a most representative example is “life, liberty and the pursuit of happiness.”

 Defining What You Stand For

What we’re offering here is a process for codifying core values that we’ve used effectively with strategic planning clients for over twenty years.  It should provide a structure you can rely on to effectively lay the foundation for a thoughtful and values-based strategic plan.

If you’re company’s been around for some time, your values won’t be “calculated,” or “established” so much as “discovered,” and “demonstrated.”  If you’re a new venture, then, somewhat like America’s “Founding Fathers,” you’ll need to affirm your values anew, based on your own personal principles and those of your leadership team.  Either way, you should find the process below significantly better than figuring it out on your own.

Step One

Have someone, most desirably a third-party facilitator, elicit candidates for your core values from your assembled planning team.  There are no bad answers here; everything goes up on the wall.  And don’t fall into the misconception we encounter quite often:  that core values must all be altruistic, or “politically correct” or “soft.”  Values like “profit” and “accountability” are entirely appropriate if those, in fact, are the kinds of principles you want to affirm.

Step Two

Take a look at what you’ve got.  Try to group suggestions that mean roughly the same thing, such as “honesty” and “integrity,” or “conservation” and “sustainability,” “financial returns” and “profitability.”  Once you’ve created these “categories” of similar ideas, discuss them until you achieve consensus on a single name or phrase for each category.

 Step Three

Now focus on each of your core value category names in turn.  Ask the following kinds of questions for each of them:  “If this is one of our core values, how must that translate into how we behave day-to-day, in how we treat each other and our customers?  What must it feel like, look like to work around here because of this?  How does this value influence the way we make decisions, develop products, select markets, relate to the communities we serve and in which we live?  You get the idea.  Make sure your facilitator scribes the answers to these questions carefully.

Step Four

Now you want to enlist the help of someone with very superior writing skills.  Your “editor” now needs to compress your raw feedback into solid, compelling prose that captures the spirit, if not every detail, of how you all agreed these values should inform your business dealings.  We strongly recommend you do this editing step “offline.”  Remember the old joke about the “camel” that got written “by committee.”

(Helpful tips:  We usually conduct the core values exercise on Day One of a two-day strategic planning conference. We create the first draft of a client’s Core Values offline in the evening of Day One for presentation and review on Day Two.  If your strategic planning process spans several conferences, as ours does, unless there’s strenuous objection, you can just let the draft “sit” until the next conference, and have a more final look at it then.  We’ve found that nothing makes draft material easier to “see” and finalize than being set aside for a brief period of time.)

 Core Value Statements:  Memorable and Meaningful

Here are just a few representative examples of core values, captured in meaningful as well as memorable ways by a few widely-respected companies:

Two of “The Five Principles of Mars,” one of the world’s leading food manufacturers:

“Freedom:  We need freedom to shape our future; we need profit to remain free.

 Efficiency:  We use resources to the fullest, waste nothing, and do only what we can do best.”

One of the “Core Values” of The Orvis Company, America’s oldest catalogue marketing company and the purveyor of products and experiences that define the “distinctive country lifestyle”:

“Pride of Ownership:  We do not sell what we, ourselves, would not be proud to own or give.” 

And finally, from perhaps the most well-known example of corporate values, Johnson & Johnson’s famous “Credo,” where the company asserts its “responsibility to doctors, nurses, patients, mothers, fathers, employees, communities, stockholders.”

In perhaps the most memorable example of corporate responsibility in history, Johnson & Johnson responded swiftly and decisively to the early 1980’s Tylenol tampering incident during which it showed itself willing to risk one of its leading brands to ensure the health and safety of its consumers.  The result?  Johnson & Johnson is consistently ranked among the world’s most respected companies.

Building on Bedrock

The essential point here is a powerful one.  As Ralph Waldo Emerson said, “thoughts rule the world.”  Building your company – and your strategic plan – on the bedrock of ideas strongly held and faithfully adhered to is building on solid ground, indeed.  It is, in fact, building your company to endure.