In my previous post in this series we explored the importance of defining your business’s Purpose as an early part of your strategic planning process – “why” your business exists and “what” it will do. But that’s not enough – all businesses also need to have a “how” and “who”, which are closely linked to the behaviours of its people. And when we talk about human behaviours, we need to also talk about values.
When my wife was setting up her own business, we had a long discussion about the importance of business values to her and her community. It seems like a luxury for a small business to focus on, especially when it’s just you to start with ! However, the late Tony Hsieh, CEO of Zappos, one of the most admired start ups of the past 20 years, actually considers values the most important aspect of starting any business:
“If I could go back and do Zappos all over again I would actually come up with our values from day one. We actually didn’t always have values. It wasn’t until about five years into it that we rolled out our values.”
Zappos now hire, manage and fire all of their employees based on their values. Zappos grew exponentially, doubling in revenue each year for a three year period leading up to 2009. In that same year, they had moved up the rankings to 10th on Fortune magazine’s list of “100 Best Companies to Work For“.
Here are Zappos’s Core Values:
For Zappos and businesses like them, strategies, processes and plans may change, but their values remain the same – and touch everything that they do. I recommend that you take the same approach, by consciously choosing your business values and then actively using them like any other business asset.
If you are starting from scratch or need to refine your existing values, there are a few essential considerations:
It’s not good enough to have good values – they have to be put to work. When you hire the right people for your business and they live and breathe well defined values, you will create a high performance culture, where people both care highly (they are engaged) and do the right work (they are aligned). This is the ultimate cultural goal of any business with staff and it can be very challenging to achieve and easy to lose if not managed successfully.
Use your business values to drive engagement and alignment within your business by:
Firing: being prepared to let people go if they consistently work against the values of your business (following good employment law practice at all times).
Well lived, fit for purpose values will spread quickly within your business, and transfer organically to your people’s dealings with the outside world – it is an absolute joy hearing stories from customers and suppliers about how your people are terrific ambassadors for your business.
Unfortunately behaviours that are at odds with your business’s values will quickly have a negative impact on your business culture, and will have to be dealt with quickly, which can sometimes cause short term pain.
For example, I was appointed as interim GM of a business that required a turnaround in performance. One of its “star” sales managers had brought in a huge amount of deals to the business every year for the past three years. However, they were not living the values and the behaviour was negatively affecting everyone else in the business. After two performance management conversations, the employee left the business. This was a difficult decision in the short term in terms of lost revenue, but a powerful message to the wider team, which rallied so the business became a market leader within 12 months.
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