Core Values: How To Define As A Business Owner

Core Values DO NOT make you money.

Sales do.

Marketing does.

Channel partners do too.

But core values? Nah.

As a business owner or entrepreneur, you might be thinking this yourself or heard it before.

And, here’s the thing, they’re “right.” Sure, core values won’t directly put cash in your bank account on their own.

But…

There is a massive return on investment when core values are defined, agreed upon, and implemented within your company.

This doesn’t mean writing them down on a piece of paper and then moving on. They won’t do shit if they’re filed away somewhere.

Core values are the foundation of your company’s culture.

When they’re aligned across your team, you are fostering an environment that is capable of moving forward positively and profitably.

So, just because they aren’t cash flow generating assets, that doesn’t mean they’re not extremely important.

And honestly, you’ll probably lose a shit ton of money if you don’t establish and live up to them.

(How would I know? Because I’ve been there myself…)

You’ll have a mediocre company culture, you won’t attract high-performers, you’ll have high turnover etc.

That’s why, in many ways, your core values do have a monetary value. Not just to help you build a company that’s capable of growth but also to save yourself from being neck-deep in trouble.

How to Define Core Values (That Mean Something)

I’m sure that each company has a different approach to doing this –but this is how we did it at Jakt.

I first listed everything I could think of that was important to me. It was a long list of things that I thought would be positive drivers of our company’s success.

How many?

About 100 of them. I knew that many of those were not suited to be “core values” but I still thought it was important to write them down.

While you’re in this stage of the process, don’t be afraid to braindump everything you have and see what’s the end product.

What’s next:

Then, I brought these 100 values to my team. I think we were about ten people at that point (more on when to do this later).

And we deliberated as a group – which ones did they like? What resonated with them? Which ones hit close to their heart?

I personally believe that you need feedback from your employees. They’re NOT your core values. They’re your company’s. And while you might have started it, your employees are an essential part of it. Culture is made out of people – not the business owner.

From the list of 100, we eventually filtered it down to 15 core values that were important to all of us. To get to 15,  it was a process of refining them back and forth until we were all in a general agreement.

But 15 is too many. We decided 7 was the right number since more than that can be hard to remember.

So, we had another discussion about the values. Based on this, we narrowed it down again with me being the final decision maker if there were a couple we couldn’t decide between.

Note:

Not that long ago, I came across a talk from Twilio’s CEO, Jeff Lawson. In it, he explained how his company documented his company’s own core values.

They used a very similar process that we did. And I wanted to share how they did it because I thought it was great as well. Listen to the full talk below:
 https://www.youtube.com/watch?v=0CKI8Jah-Po

Your Core Values Can Evolve Over Time

Your company will evolve over time, offerings will change, and people will change. Who you are as a business owner will. And even what you stand for as a business will too.

So it should not come as a surprise that your values will evolve as well. They are not stagnant, but fluid.

A lot of people don’t see eye to eye with me on this.

They say core values should never change. But I just disagree.

I’m not saying they should change all the time. Or every year for that matter. And just because you remove one from the list of 7 doesn’t mean it’s not a value and importance to the company.

But there could come a time when there’s another core value that is a better fit than others. And I’m willing to make that change if and when needed.

So…

Your core values don’t have to be the same in year five as they were in year one. Or when your company has 55 employees versus when there were three of you.

Jakt is definitely not the same when it was me and my roommate than now that we do $4M/year in revenue. Make sense, right?

When should you define your company core values?

That’s a good question. And I don’t think there necessarily has to be a universal answer.

We did it when we had about ten people. In hindsight, that might have been a bit late. Before that, I had traits and values in mind that were important to me. But they were not documented as part of the company.

I also don’t think you should do them when it’s just yourself. At that point, you have very little idea of how the company will look like as you start hiring people.

If I could go back and do it again, I’d personally say that the ideal timing would be between 3 to 5 people. But, then again, you have to find out what works for you and your situation.

Are they really that important?

It depends on whether you live them or not.

Turn your core values into actionable values. Not just cool words that sound good but don’t mean anything.

Here’s an example:

One of our core values focuses on creativity.

But the core value is not “creativity.” Because sure, you’re throwing your team a concept that looks cool. But what are they supposed to do with it?

So, we decided to define it as “Be Creative.” And I think that helps make it more livable. You can be creative. You can also easily use this in language. Hey Bob, be creative 😉

Or, another example, “responsibility.” We changed it to “take responsibility.”

As you can see, we use verbs before the value, so that they are actionable. And, once you have them clear, you also have to continuously…

Protect your core values.

Your core values depend on the people at your company. It only takes a few people that don’t take them to heart for them to start losing value.

One way we do this at Jakt is through a “cultural interview.”

I’ve written a whole article on this specifically (check it out here), so I won’t go into details.

Another way to do this, and this is arguably the most important, is to constantly be monitoring for them. If someone isn’t living a value, immediate feedback and discussion need to happen.

Otherwise, the value means nothing and the new standard is not living the value.

Also, this applies to you as well, business owner. With core values, everyone is on the same level and you need to hold yourself accountable as well.

In a worst case scenario where someone is a repeat offender and you don’t think they can improve or they are negatively affecting the culture, you must remove them.

Define Core Value (and Stick To Them)

1. A good way to define your core values is by starting with brainstorming everything that’s important to you. Then, and with the feedback from your team, keep closing into the few that matter the most.
2. Your core values are not static and should evolve over time. As your own company grows, they will too.
3. They need to be actionable and liveable. You, as the business owner, also need to be the guardian of the culture and values, as does everyone else.