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Organisational Culture - The Crucial Importance of Core Values

Jim Riley

25th May 2014

Do you have a set a core values? What deeply held beliefs shape the way you see the world and how you act? Your core values underpin the way in which you behave, act, and how you live your life. So, if someone asked you to list your two most important values, what would they be?I ask the question because the concept of core values is essential to understanding organisational culture.Indeed I would hope that the role of core values would feature in many high-scoring BUSS4 essays for students answering questions about organisational culture – they are important!

As you research organisational culture in different businesses and organisations, it won't be too long before you come across the term “core values".

For example:

Management consultancy firm Accenture:

“Since its inception, Accenture has been governed by its core values. They shape the culture and define the character of our company. They guide how we behave and make decisions."

One of my favourite examples of a successful business firmly built on core values is Zappos:

“We created these ten core values to more clearly define what exactly the Zappos Family culture is. They are reflected in everything we do and every interaction we have. Our core values are always the framework from which we make all of our decisions."

Look at Sainsbury's for a different take on core values:

“Our five company values reflect the key issues we face. They are also inextricably linked to our core business goal of exceeding customer expectations for healthy, safe, fresh, tasty food at fair prices.
Our company values:
· Best for food and health
· Sourcing with integrity
· Respect for our environment
· Making a positive difference to our community
· A great place to work"

Readers of this blog know that I'm a huge fan of the organisational culture at Southwest Airlines, who have three very distinctive core values:

“Have a warrior spirit (work hard), a servant's heart (treat others as you'd like to be treated), and a fun-loving attitude (take work seriously but not yourself).

So why are core values so important in understanding organisational culture?

Core values are what support the vision, shape the culture and reflect what the organisation values. They are the essence of the organisation's identity – the principles, beliefs or philosophy of values.

A strong set of core values can provide several key advantages to an organisation:

  • Core values support and guide management decision-making. For example, if one of your core values is to stand behind the quality of your products, any products not reaching the satisfactory standard are automatically eliminated.
  • Core values inform existing and potential customers about what the business is about and clarify the identity of the business. Given that most markets are highly competitive, having a set of specific core values that speak to the public is definitely a source of competitive advantage. You might also argue that NOT having core values becomes a significant weakness of an organisation.
  • Core values are becoming primary recruiting and retention tools. With the increasing ease of researching organisations, job seekers are doing their homework on the identities of the businesses they are applying for and evaluating whether or not these organisations hold the values that the job seekers consider as important.

Each of the above advantages is significant for an organisation. However, I suspect that the importance of core values to organisational success is even deeper than you might expect.

Collins and Porras put it well in their HBR article:

“Companies that enjoy enduring success have a core purpose and core values that remain fixed while their strategies and practices endlessly adapt to a changing world"

So the strategy may change, but the core values of a successful organisation are likely to remain the same.

Jim Riley

Jim co-founded tutor2u alongside his twin brother Geoff! Jim is a well-known Business writer and presenter as well as being one of the UK's leading educational technology entrepreneurs.

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