Most organizations have defined values. They appear on websites, in annual reports, in strategy presentations and even on office walls. New employees may encounter them during induction, and senior leaders may refer to them when presenting a new strategy.
However, in most cases when I have asked my client organizations’ representatives, what their organizational values are, my question has been met with a nervous laughter, trying to avoid eye contant with me and struggling to guess at least one value.
This reveals a common gap between stated values and lived values. An organization may have carefully chosen words describing what it wants to represent, but those words have little practical significance unless they influence decisions, behavior and the use of organizational resources.
Organizational values are often expressed through broad concepts such as integrity, respect, responsibility, trust, collaboration, courage or innovation. These may all be worthy aspirations, but their meaning is not self-evident.
What does integrity require when acknowledging a mistake may harm the organization’s reputation? What does respect mean when restructuring affects employees? What does responsibility require when a profitable business opportunity creates risks for other stakeholders? How should a commitment to innovation influence investment decisions, risk tolerance or the treatment of unsuccessful experiments?
Unless an organization translates its values into practical expectations, employees must interpret them individually. Some may not consider them at all. This does not necessarily show indifference. People may simply have received no help in connecting abstract concepts with the choices they make in their work. Values become useful when people can apply them to actual situations. They should help employees decide how to treat customers and colleagues, how to respond when something goes wrong, when to raise a concern and how to balance competing interests.
A value that offers no guidance when a decision is difficult is unlikely to shape behavior when it matters most.
Organizational culture develops through repeated actions. It is shaped by what leaders and employees do, tolerate, reward and ignore.
If an organization values transparency, leaders should share relevant information and explain the reasoning behind important decisions. If it values collaboration, performance systems should not reward only individual results. If respect is a stated value, it should influence workloads, communication and the way disagreements are handled.
Values also become visible in small decisions: whose voice is heard in a meeting, whether concerns are taken seriously and whether mistakes lead primarily to learning or blame. These signals teach people more about the organization’s real values than any formal statement.
Values should also influence major strategic choices involving investments, technology, business partners, workforce changes and risk.
An organization may describe itself as people-centered while treating workforce consequences as an afterthought. It may emphasize sustainability while approving decisions based almost entirely on short-term financial returns. It may claim to value integrity while rewarding results without examining how they were achieved. Such contradictions undermine trust.
Values do not always point towards one obvious answer. Strategic decisions often involve genuine tensions. Innovation may conflict with caution, and transparency may need to be balanced with confidentiality. Values provide a framework for discussing these tensions. A well-governed organization should be able to explain which values were relevant, how competing interests were considered and why the chosen course was appropriate.
Embedding values into organizational life requires more than communication and training. It requires accountability.
People should understand what behavior is expected and what happens when actions conflict with those expectations. The standards should apply consistently across levels of seniority. Otherwise, values may appear to be obligations for employees but optional aspirations for leaders.
Values should also be integrated into existing governance and management processes. They should inform strategic planning, risk assessments, investment decisions, procurement, recruitment and performance management.
Boards can ask how significant decisions align with the organization’s purpose and values. Senior leaders can examine whether resource allocation and incentives send a consistent message. Managers can use values when discussing conduct and competing priorities with their teams. This makes values part of the organization’s operating system rather than a separate communications exercise.
The real test is whether people understand what the values require of them and whether those values influence decisions when the answer is difficult.
The test of organizational values is not whether everyone can recite them word for word. Memorability helps, but it is not enough. The real test is whether people understand what the values require of them and whether those values influence decisions when the answer is difficult.
Can employees use them to guide everyday choices? Do managers refer to them when balancing competing priorities? Can leaders show how they influenced an important strategic decision? Does the organization hold people accountable when their actions contradict its principles?
Values should not remain words that describe the organization. They should help the organization decide what to do. They should be lived and manifested in all operations, decisions and actions on all levels of the organization.