Core values are a concept I return to time and time again, across the companies I advise. And core values are surprisingly controversial to many founders. Many would rather just work on something tactical and tactile, like building the product or making sales. But even in a team of 1, culture and core values tend to raise their head.
Core values are decisions made in advance Link to heading
Do you think through every decision you make? I imagine not.
Imagine deliberating anew every day - what toothpaste to use, what shampoo to use, what bread to have as toast, what shoes to wear to work, what outfit to wear. You probably make some of these decisions, but you probably have some system, even if it’s as simple as “don’t wear yesterday’s cloths”. Decisions have a cost, and the cost adds up.
Extrapolate this to a company - what if for every decision, you have to gather stakeholders and hash out decisions anew? Speed is a startup’s first line of defense, and core values help maintain that. Core values represent meetings not held and consensus that doesn’t need to be rebuilt.
Core values keep the right people in, and the wrong people out Link to heading
Explicitly stating things (and writing them down) makes people accountable. It also provides a basis for communication. As an example, if your core value is “Work Hard” or “Work Smart”, the employees you look to hire will be different. I don’t want to say either of these are better than the other - each has some advantages and disadvantages, depending on your company and culture. That’s why you need to determine this yourself.
But in a company, if you have a mix of “Work Hard” and “Work Smart” aligned people, by default their internal values will drive unproductive conflict (and even politics). You would probably prefer one over the other - having core values allows you to surface this decision clearly and concisely, instead of having it drag out with unproductive conflict over time.
Core values create culture, and culture cascades Link to heading
THe popular saying is “culture eats strategy for breakfast” (and similarly, strategy eats tactics). Why is this? because culture cascades.
Let’s look at a trivial example - customers leaving. This churn might be attributed to bugs and defects, , in turn attributed to rushed timelines, in turn attributed to Product timeline changes. But every system is perfectly optimized to produce the outcome that it does. And the primary actors in this system are people - often your executive hires. Cultural dysfunction there results in process distortion (workarounds), which leads to more process, which leads to chaos and slowdown.
In the example above, Product timeline changes are occurring due to an executive’s action - either a Product hire’s activities, or pressure from a C level. Tactical fixes don’t necessarily help in these cases - the individual needs to push back. In this case, a “customer first” or “quality software” basis provides a common ground for discussion - in the example of a C level’s pressure, that hire can push back and demonstrate how the pressure is causing outcomes against the culture, values, and business.
Without this, it’s hard to have a basis for pushback from on high. Some individuals can do it, but many can’t
As you can see, core values have a variety of aspects where they improve communication and speed in an organization.