The Hierarchy of Company Values
The maxim, “culture eats strategy for breakfast” has been around for decades. The last few years in particular have seen an uptick in promoting the importance of establishing a company culture. Culture defines the way an organisation works. Done well, it can be a recruitment tool, an alignment mechanism and a morale enhancer. Company values are the articulation of company culture, statements which codify an organisation’s way of being.
Hierarchy of Adoption
Anyone who has worked in a tech company can attest that the degree to which company values reflect the true nature of the inner workings of the organisation can vary. Sometimes what is posted on the careers page is reflective of day-to-day operating practices. Other times it can be somewhat aspirational, and occasionally it’s just down right fictional. There is a hierarchy of values adoption.
The adoption hierarchy is often a result of how the values were drafted in the first place and the founders/leadership team's previous exposure to environments with intentional cultures.
I remember being impressed by Airbyte’s company handbook, where they outlined their company values when they were basically a brand new company. It showed a level of intentionality from the founders about the type of business they wanted to create. Not all companies have defined cultures from day 1, as understandably figuring out what the business even does in the first place takes priority. However, if this exercise is left for too long, or worse outsourced almost entirely to an external agency, then it is likely the organisation will never have a strong culture and operating philosophy, an attribute which underpins the most successful companies. One study found that companies with strong cultures saw a 4x increase in revenue growth. There is a business case attached to culture.
Somewhat controversially, I believe that culture should be driven top-down. In fact, I think it’s the only way you can create a well defined culture. Culture lives in the behaviours that are rewarded and rebuked. Managers set the culture for their teams. They decide who to hire, promote and fire which defines the tone for the overall team culture. Leaders are managers of managers and set the culture for the entire company. If the founders and leadership team aren’t embodying the company values or operating in a particular manner, then that is a sign that the values are not reflective of the true company culture. While anyone, no matter how junior, can make micro-changes to culture, ultimately the internal nature of a company is influenced by those with the most power.
Hierarchy of Quality
A company’s values can often reflect a company’s quality. The content, even if not a 100% accurate representation, can provide a window into what the company truly cares about, and the level of care they administer to tasks more generally. Carefully crafted words can be an indication that the company is thoughtful in how it builds its products and organisation. The language used can also provide an insight into maturity levels within the business. A quick litmus test is do the values read as if they were written by adults, for adults.
While there isn’t a universally agreed list of high quality company values, I’ve identified 3 values that I think are universally good and bad signs of company quality. The positive values certainly don’t guarantee that the company will be a good place to work (partly because this is highly subjective), but rather are an indication that they are at least on a path to trying to build a successful / not entirely dysfunctional company.
The Case for Operating Principles
One issue I have with company values is they are at times prescriptive on how to *be* as a person, rather than being perspective on how you should operate at work. There is a subtle difference. For example, there is a difference between “take risks”, as a company value vs “be a risk taker”. “Take risks” is guidance on how to get your work done i.e. when in doubt take the risk (preferably calculated I’m sure). “Be a risk taker” requires a level of innate self-identification with the value that is wildly open to interpretation. You can be someone who can push forward a project in an ambiguous environment without viewing yourself as the reincarnation of Evel Knievel.
Being type values can lend themselves to hiring towards a homogeneity of a particular personality type and backgrounds. This eventually collates into a culture of groupthink within the business. One way of avoiding this trap is to create operating principles instead of company values. Operating principles, such as those used at Stripe and Amazon, explicitly focus on the approach to the work itself and have a tendency to guide decision making in a more tangible way than 1-3 word company values do.
Why Care About Company Values?
As mentioned early, company values are an articulation of the company culture. You can tell a lot about a company, both by what is referenced and what is not. If you’re planning on joining a company it is worth dedicating some time to evaluate the company through this lens (although it by no means should be the deciding factor). Companies with strong cultures have a competitive advantage, particularly when they are crafted around driving forward a shared mission and focused on creating a high-performance environment. If you’re a founder there is business value in proactively creating a distinct culture. If you’re a manager operating in a company with a less solidified culture, you can still take action to develop team level values/operating principles that shape the culture of your team for the better and sets the standard for others.
I’m always interested in hearing other points of view so if you agree or disagree with any of the above let me know! If you’re interested in company culture, you may also enjoy reading Want to Change Company Culture? Start by Changing Communications.