This article aims to present a novel, powerful and proven alternative for the flawed way in which firms traditionally state “company values”.
An analysis was made of the value statements of the 100 largest Fortune Global 500 firms. A literature search on company values was conducted. The authors’ field experience with the use of company values was applied.
A majority of large global companies have stated company values. There is abundant pundits’ advice on how to define, embed and live by company values. Nevertheless, stated company values generally have no impact on performance; worse, they may blow up in managers’ faces, with accusations of hypocrisy. The novel approach overcomes these shortcomings. First, it removes unnegotiable qualities, consigning these to the company’s code of conduct. Second, it no longer states a value as a singular point of perfection but as a position of a cursor on a scale.
This approach looks at a value as a capability, that is, a resource that requires investment and development, one that helps the company to be more effective than its competitors and that its competitors would find hard to imitate readily.
This approach looks at a value as a capability, that is, a resource that requires investment and development, one that helps the company to be more effective than its competitors and that its competitors would find hard to imitate readily.
The article is of value to practicing managers. The approach helps the firm to distinguish itself from competitors in a positive and hard-to-imitate way. It stimulates productive open conversations between the firm’s managers and employees. It leads to statements that both reveal and reinforce the firm’s desired culture.
