Defining Your Company's Values

Everyone wants their employees to form good habits. Habits are repetitive behaviors that are generally associated with predictable results.

Brushing your teeth and making your bed in the morning are habits. The types of habits needed within a company are those tied to economic outcomes. Chick-fi-a has dominated the fast-food market in part by encouraging team members in habits like saying “please” and “thank you.”

Exhibited over time – good habits will find their way into all areas of life for the employees and become something called virtues. Making your bed leads to tidiness. “Please” and “thank you” are associated with friendliness.

One could argue that Mcdonald's, one of the largest employers in the world, is perhaps also one of the best educators of the last half-century. The golden arches are often the first job for many in high school and in many instances during or after higher ed.

What skills and habits are they teaching? Let’s look at two big ones.

• Timeliness – employees need to arrive at their shift on time and arrange travel for themselves to the location.
  
• Coordination – employees need to learn to work as a team and communicate with others about timely execution of work.

From these points, you could argue that good habits are what keep you in business. Conceptually, non-artisan labor at a factory is repetitive and habitual on a line. Without these basic working habits, the company cannot function.

True success, however, comes from the extremes of behavior.

• The best investors are able to wait for the perfect investment opportunity.
• The best sales organizations can say no to an opportunity that isn’t a fit.
• The best customer service for a software product can easily overcome the flaws in the product.

Differentiators for a business come in the form of superior habits which have become virtues. Not simply for effect, but in reality, the objective of creating a set of values for your employees is to drive them towards excellence.

The moral excellence of employees is also of concern to the business owner. With sound moral formation, employees will avoid doing what is wrong and do what is right.

The role of the entrepreneur after a certain stage is to manage risk. And there is no greater risk than what can occur as a result of failings of morality by employees, customers, and suppliers.

In contrast to mission and vision, value forming is a different exercise. Founders have a unique role in a company. A company is always tribal with a tribal leader holding authority and final say at either the board or executive level. Culture is always set at the top because of basic psychology. [1]

At a company, the values of a firm must be calibrated to the nature and character of the founders. Compensate for their weaknesses and curb their tendency towards bad behavior when possible.

And herein lies the importance of public values: By making these values publicly available another basic facet of psychology is triggered, the consistency principle. It is a natural human tendency to try to conform with public declarations about yourself, who you are, and what you intend to do. Doing otherwise would make a person seem wildly inconsistent, even crazy.

Founders should reflect carefully on the values they should make public declarations about. Founders should work to openly define the habits that they want employees to form, the virtues that will make the company successful, and the public declarations that will curb their own negative tendencies.

[1] Experiments by Stanley Milgram showed there is a natural tendency for employees to respect the authority of a person to the harm of their fellow man.