What are your organization's Core Values? Hold it - no looking at a website or some document.  Can you remember them? Do you know what they mean? Are they being followed?

Core values are one of the three strategic foundations - Mission, Vision and Core Values. All three get a bad rap in many organizations. Those involved in developing them will see the activity as a waste of time because no one knows what they are and business is not conducted according to these foundations.

I recently had a leader in a manufacturing business tell me about a debate in their leadership team about whether publishing core values during a time of difficult financial challenges was sending the right message. This leader felt like it was the ideal time to be discussing what the company stands for. I am guessing some of the leaders saw the core values as some idealistic goal -- rather than as a strategic commitment from the board room to the front lines.

What are Core Values?

The Goodfriend definition for Core Values is "what the organization stands for in terms of attitudes, principles, behaviors and action." Core values are the filter that every word (verbal or written) and every action (seen or unseen) should pass through to ensure alignment with those values. The following are Chevron's Core Values:

• Integrity - We are honest with others and ourselves. We meet the highest ethical standards in all business dealings. We do what we say we will do. We accept responsibility and hold ourselves accountable for our work and our actions. 
• Trust - We trust, respect and support each other, and we strive to earn the trust of our colleagues and partners.
• Diversity - We learn from and respect the cultures in which we work. We value and demonstrate respect for the uniqueness of individuals and the varied perspectives and talents they provide. We have an inclusive work environment and actively embrace a diversity of people, ideas, talents and experiences.
• Ingenuity - We seek new opportunities and out-of-the-ordinary solutions. We use our creativity to find unexpected and practical ways to solve problems. Our experience, technology and perseverance enable us to overcome challenges and deliver value.
• Partnership- We have an unwavering commitment to being a good partner focused on building productive, collaborative, trusting and beneficial relationships with governments, other companies, our customers, our communities and each other.
• Protecting people and the environment - We place the highest priority on the health and safety of our workforce and protection of our assets and the environment. We aim to be admired for world-class performance through disciplined application of our Operational Excellence Management System.
• High performance - We are committed to excellence in everything we do, and we strive to continually improve. We are passionate about achieving results that exceed expectations -our own and those of others. We drive for results with energy and a sense of urgency.

Chevron is not a client and I am using their Core Values (what they call The Chevron Way) as a real life example. Below I will be referring to these core values through some theoretical examples. My disclaimer -- I do not have any specific knowledge about the way Chevron operates and the examples below are theoretical only.

The activity of creating Core Values is not a brainstorming exercise as much as it is a negotiation exercise. Words have meaning but the meaning is often interpreted differently by different people.

I have facilitated many sessions to create Core Values. Agreeing on the core value word/phrase involves a negotiation or debate between participants. I have a great, really fun, team activity to help leaders/participants draft their list of core values. The process not only involves individual preferences/prioritization but also collaborative preferences/prioritization. It gets challenging for the team members when they have to negotiate about what values to keep and what values they will "permanently" discard. For example, there could be some negotiation on the core value being "teamwork" vs. "collaboration." But the negotiation is not just wordsmithing. Some of that negotiation between those terms could involve the difference between debate, synergy and integration. That negotiation not only helps drive the decision but also helps the group have a common understanding of what they are committing to as an organization.

How Does an Organization Commit to and Live its Core Values?

As challenging as the negotiation process, that's easy compared to getting those in the organization (and key partners, vendors and contractors) to commit to those values and to live those values in the way they communicate, collaborate and deliver products/services.

Organizations often develop core values and define those values like you see above with Chevron. There is often a process to communicate these values to the rest of the organization or maybe even engage them for feedback or ideas prior to finalizing the core values. There is some excitement to the process and it can be uplifting for that moment or period of time. I have observed that leaders often make an assumption because they have communicated these values that people will naturally align their attitudes, principles, behavior and action to those values. This alignment rarely happens without an intentional process to make it happen. It also doesn't happen unless the organization sees significant value in aligning those attitudes, principles, behavior and action so it is worth making a time and/or dollar investment.

Here are a few recommended steps to align the organization to live its core values - after the core values are developed and defined (as you see above with Chevron):

• Define standards for living these core values. For example, one of Chevron's core values is "Trust." A Standard for "Trust" could be "A working relationship, between two people with a stake in that relationship, that demonstrates integrity, vulnerability, acceptance, reliability and competency." Another standard of Trust could be, "Action must be taken to improve trust if either person in the working relationship requests it or if another team member/stakeholder (not directly involved in the working relationship) requests it because they are being negatively impacted by trust problems in that working relationship.
• Audit the organization to better understand the most significant alignment gaps with the core values. For example, in Chevron's case, HR might need to determine which areas could align more effectively to the values - talent acquisition, performance management, compensation, organizational development. Should the recruiting process include behavioral interview questions to assess how whether the candidate make decisions consistent with the core value of Integrity?
• Institutionalize and cascade the core values. It is important to develop some consistent key messages in all communication to reinforce the core values. Embed the core values within business processes, goals and metrics.
• Anticipate and plan for resistance. The greatest threat to living the core values is not responding to the resistance to core values. If a company is committed to the core value of Integrity and a top performer takes some liberties because of his/her status, the real threat is letting it go - which sends the message that top performing people don't need to live the core values, only everybody else.

What is the Impact of Core Values?

It is not difficult to measure the cost of not following the Chevron core values:

• Performance -- The cost of a poor middle management hire could be $25,000 to $60,000 that could include recruiter fees, background checks, orientation/training, lost productivity, termination costs, etc.
• Partnership -- The cost of a work injury involving a contractor on a construction project because of lack of alignment between the owner and contractor on procedures. Depending on the injury, the cost could be $10,000, $250,000 or $10 million plus in medical costs and lost time on the job.
• Trust - The cost of lost productivity because two key players are not collaborating well on a cross-functional initiative - the cost of a delayed or ineffective implementation of the initiative could be thousands or millions of dollars.

It is more difficult to measure the value of having core values. Like most quantifiable successes, there are many contributors. Using Chevron's values for a theoretical example, let's say there were some dramatic improvements in the Purchase-to-Pay process resulting in efficiencies and cost savings of $15 million annually. Maybe it was accomplished through constructive challenges of each other's part of the process, some excellent collaboration between functions and with contractors/vendors and the introduction of innovative digital tools/systems - living the Core Values of Trust, Ingenuity, Partnership, Performance. The team would need to be recognized for accomplishing the financial targets while going about it in a way that is consistent with the core values. Something like that is no small feat and does happen in large corporations as well as in small ones. Unfortunately, we only seem to notice when an initiative like that goes bad or is a waste of time.

Reading Up on Core Values

A great book on Core Values is by Ann Rhoades titled, "Built on Values." Ann was the formerVP of People for Southwest Airlines and was part of a team that was instrumental in driving Southwest's core values into the culture.

Jim Collins, the author of Good to Great, also authored an article "Building Company Vision" that I highly recommend. It outlines and differentiates the concepts of Core Purpose (Mission), Visionary Goal and Core Values.

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Take a fresh look at your organization's core values. Are they clear? Is the leadership committed to these values? Is there commitment to live these values? What positive impact can be recognized from living these values?

Core values is one of the three legs of the strategic foundation stool. Without living those core values, your foundation will not be strong enough to fully support your mission and vision. As Ann Rhoades said in her book, "If your values are inspiring and connected to behaviors, hiring, and rewards, your culture will become higher performing by itself."

Mike Goodfriend is a Teamwork Engineer, Leadership Coach, and Meeting Facilitator. Since 1989, Goodfriend & Associates has been helping leaders and leadership teams increase their strategic advantage through achieving higher levels of competitive advantage, teamwork/alignment, leadership competency and excellence/customer satisfaction. Mike Goodfriend can be reached at 713-789-6840 or via email at mikeg@goodfriendconsulting.com.

© Goodfriend & Associates, Inc., 2016

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