Corporate culture is deeply rooted in the feelings, thoughts, and actions of the people within the organisation. It results from the sum of the deeply anchored values and emotions of every individual in the company. Corporate culture also arises in non-orchestrated cooperation. The sum of the individual values in the organisation shapes the collective identity and the overall dominant identity characteristics shape the collective value system of a company. If the predominant part of the collective value system creates harmony, a sustainable corporate culture can emerge from it. Entrepreneurs are well advised to consciously and actively shape the value system within their company rather than leaving it to chance or the unguided forces within the organisation.
Corporate Values
Corporate values define the characteristics that are important and valuable to the company. In other words, they represent the ideals that are desirable for the company and guide the actions of all individuals within the organisation. Since these ideals are always individual and subjective, these values should also align with the personal values upheld by the company’s management. Otherwise, it can lead to a sustainable conflict of interests at the highest level of the organisation, resulting in a detrimental impact on the corporate culture. At this point at the latest, it becomes clear to all entrepreneurs that the implementation of a corporate value system cannot be successfully delegated away. After all, the rituals, standards, and rules should be authentically exemplified within the corporate community and thus made tangible for employees, customers, and business partners.
The individual values within a value system can be divided into the following categories:
Core Values, which are consistently represented by the company both internally and externally. They serve as a superordinate or generally valid orientation for action, behavioural standards, or a basis for decision-making. Core Values are also recognisable and tangible for external third parties. In a way, guiding values form the DNA of the company.
Aspirational Values, which the company strives to embody but needs in order to remain competitive or to be successful in the future. These are the values that the company still needs to work on to create and sustainably implement them.
Permission-to-play Values, form the basis for daily collaboration and behaviour among each other. In other words, they are values that regulate the HOW of personal interactions and task completion.
Accidental Values, are all those values that have not been defined in any of the previously mentioned categories and therefore do not align with the explicitly desired values in the company. These values can be temporary or permanent and can have either positive or negative effects on the organisation. Positive or beneficial accidental values can either be accepted or consciously integrated into one of the desired categories. Negative values must at least be recognised, assessed, and ideally dealt with so that they do not become a risk or hazard.
Why
The Digital Age is characterised by increasing volatility and high rates of change. Demographic developments and climate change create additional pressure for change and innovation. In this context, uncertainty increases. People are facing challenges that lack immediate solutions. However, individuals still need structures in which they can live and work, and they look for real basic values with which they can identify. In an era of digitalisation, global expansion, resource constraints, and increasing employee turnover, companies must provide their employees as well as their customers and partners with opportunities for personal identification with the company.
A strong corporate value system,
Towards external third parties, a value-oriented and genuinely embodied corporate culture can create unique selling points and secure important competitive advantages. Within the organisation, it is a unifying element that strengthens motivation as well as loyalty and promotes innovation. This also results in a strong employer brand, among other things.
How
The sustainable implementation of a value system in a company usually starts with a project; however, it is certainly not a one-time action, but rather a continuous process. The implementation can be divided into three stages: definition, communication, and application.
Definition
The first step involves defining the most important contents of the value system, which raises the first cultural or, to a certain extent, value-oriented question, namely about the group of participants. If the definition is made within a larger or at least representative group, this increases transparency and accuracy, which in turn ensures greater acceptance. Entrepreneurs should engage in self-reflection and reflect on their own values. It is advisable not to solely dominate the definition step and to allow ample space for group work. Nevertheless, in owner-managed companies, the values and expectations that are firmly anchored in the personal and entrepreneurial nature of the owners should be adequately considered. Otherwise, the value system creates a high personal pressure to change, because, without the authentically exemplified contribution from the owners, a value system cannot develop positively in the long term.
Do not copy! The definition of the most important values should align with the culture and the essence of the company, no matter how dissimilar they may be to value systems in other companies. The obvious thing to do is to look for other examples or specifically ask the competition about their value system. The top priority should be the company's own strategy and culture, which the value system should serve and help to achieve success. Ideally, a strong value system can make a company unique.
Be realistic! Regardless of whether they are basic values or aspired values, they must have a reliable connection to real circumstances. If the gap between reality and desired values is so large that most employees cannot envision achieving them in the foreseeable future, graduation or possibly intermediate steps should be considered. In general, prioritising feasibility instead of quantity is crucial. In practice, it has proven beneficial to keep the number of values in the single-digit range or limit them to a maximum of 10. Care should also be taken to ensure that values are described in a simple manner and do not require any special technical terms or paraphrases.
Allow individuality! If the collection and evaluation of potential values result in very rare or possibly even bizarre descriptions, these should be seriously considered. After all, it pertains to the authentic nature and desired identity of the company and the fact that being unique may be both necessary and desirable.
Know the effect! Before making a final decision about the collection of possible contents for the company's value system, the individual values should be considered for their internal and external impact. The goal is not to discard all those values that have an unwanted or negative effect at first glance, but rather to understand the associated consequences with them, and determine the accompanying measures that need to be taken.
Communication
The value system of a company can be communicated internally as well as externally through existing and known channels. It is advisable to incorporate the value system into the documentation and communication of the corporate philosophy, strategy, or work instructions. Furthermore, a strong value system can and should be actively integrated into image building in the sales, labour, or procurement markets. When it comes to employees in the company, the presentation of the value system should be an integral part of the onboarding process and within the recurring employee information.
Application
As with most behavioural elements of corporate management, the effectiveness of the value system primarily relies on its authentic and consistent implementation in practice. Good intentions or goals must be followed by recognisable actions. The consideration of the value system must be experienced in day-to-day business operations without being artificially imposed. In this regard, the role of company management and executives is paramount. It is an essential aspect of leadership work to ensure that corporate values are firmly anchored in the corporate culture. This is done through their own actions or by emphasising or even rewarding value-oriented thinking and action in the workforce. Conversely, violations of the value system should also be identified and actively addressed.
Strong corporate values persist even in times of crisis and can nevertheless change over time.
Examples
As described earlier, a company's value system should not be a compilation of current trends or "award-winning" values from other companies. Furthermore, a value system should not consist of values that people should usually have anyway.
Community
Mutual appreciation, respectful interaction
Honesty, open error-learning culture
Solidarity, mutual support
Transparency, clear and open communication
Business
Customer experience, customer benefits come first
Business relationships count
Performance and excellence are the goals
Profitability comes before sales growth
Society
Accepting social responsibility
Climate protection, ecological awareness
Resource conservation, sustainable consumption
Human rights, anti-discrimination
Companies and their owners must stand by the value system in the company and not just accept it as a necessary feature of the company. Companies should not strive to adopt particularly trendy or common corporate values. Those values should not be adopted which cannot be established without compromises due to the corporate culture or the business model. Entrepreneurs must be aware of their own role models and not underestimate the impact of their personal actions on the company. What matters is the authentic application and not the way the value system is documented and communicated. For the targeted values, the current deviations from the target image should be known and evaluated, and any necessary measures to achieve the goals should be defined.
