How Core Values Help Leadership Teams Make Better Decisions
Most companies have Core Values. Leaders can usually tell you what they are, and often a great deal of thought went into choosing them.
The more revealing question is what happens when the leadership team has to make a difficult decision.
A long-standing employee is getting results, but the way they work is creating friction with others. A valuable customer is asking for something that falls outside the way the company normally operates. Two leaders disagree about how to handle an important issue. A commitment has been missed, and addressing it will require an uncomfortable conversation.
These are the situations where Core Values have a job to do.
Over the years, both as an executive and working with small business leadership teams, I have found that most leaders do not struggle to agree with words such as integrity, accountability, respect or teamwork. The challenge is getting a group of people to share the same understanding of what those words require from them when they are making decisions and leading people.
That is when values move from being something the company believes in to something leaders can use.
Core Values Become Real Through Behaviour
Core Values only become meaningful when people can see them reflected in everyday behaviour. If a value is going to shape your culture, people need to understand what living that value looks like in practice.
That becomes even more important when a decision is difficult.
Consider a company that has accountability as one of its Core Values. Most people will agree that accountability is important. The word itself does not tell a leadership team what to do when a strong performer repeatedly misses commitments.
One leader may focus on the person's overall contribution and give them more time. Another may focus on the effect those missed commitments have on the rest of the team. A third may believe the person needs to be held to the same standard as everyone else.
All three leaders may genuinely believe in accountability.
What they may not share is a common understanding of the behaviour that demonstrates it.
If accountability has been clearly defined within the company, the conversation becomes more grounded. The leadership team has a shared standard against which it can evaluate the situation.
That standard helps them decide how to respond.
Core Values Help With Difficult Trade-Offs
Values are easy to support when there is little at stake. Their usefulness becomes clearer when there is a trade-off.
Perhaps one of your values is customer commitment. A major customer asks your team to make an exception that will help them, but doing so will put pressure on your people and affect commitments made to other customers.
What does customer commitment mean in that situation?
Does it mean saying yes to the customer asking the loudest? Does it mean protecting commitments already made? Does it mean finding another solution that serves the customer without asking the team to compromise another standard?
The value does not make the decision for you. It gives your leadership team a common place to start the conversation.
This becomes increasingly valuable as a business grows. When the company is smaller, the founder or CEO often carries much of this context personally. People know what the CEO expects because they have worked closely together, and when an unusual situation arises, they can ask.
Growth makes that increasingly difficult.
More people are making decisions. More managers are leading teams. The CEO is further removed from many of the day-to-day situations where judgement is required.
If each leader interprets the company's values differently, employees begin to experience different versions of the culture depending on who they work for.
One leader addresses a behaviour while another accepts it. One department treats a commitment as firm while another treats the same commitment as flexible. One manager has a difficult conversation while another avoids it.
The words have stayed the same. The experience of working in the company has not.
Core Values Create a Shared Leadership Standard
Core Values are an important part of the leadership foundation for growth.
They give leaders a shared standard for behaviour and decision-making. When a leadership team has done the work to define what each value looks like in practice, leaders have something concrete to refer to when a difficult decision needs to be made. They can ask whether a course of action is consistent with who they have agreed to be as a company.
They can also hold one another accountable to that standard.
Culture is shaped through hundreds of decisions and interactions that the CEO will never see. A manager deciding how to respond to a missed commitment is shaping the culture. A leader deciding whether to address behaviour that conflicts with a Core Value is shaping the culture. A team deciding whether to honour an agreement when circumstances change is shaping the culture.
Over time, those decisions teach people what the company values far more effectively than the words themselves.
Put One of Your Core Values to Work
There is a straightforward exercise I use to help leadership teams move a Core Value from an idea to something they can apply.
Choose one of your Core Values and ask your leadership team to identify three observable behaviours that demonstrate that value and three behaviours that contradict it. Be specific enough that someone could recognize the behaviour if they saw it happening.
Then look at a recent decision your leadership team had to make.
Where was that value visible in the decision? Was there a point where different interpretations of the value led leaders toward different answers? Would a clearer behavioural definition have helped the team reach the decision with greater consistency?
The purpose of the exercise is to create a shared understanding that leaders can use the next time the situation is less straightforward.
The CEO Cannot Be the Interpreter Forever
For many small business CEOs, there comes a point when being the person who carries the unwritten standards of the company begins to limit the business.
If people continually need the CEO to explain what is acceptable, settle disagreements or make the judgement call, the leadership team has less capacity to lead independently.
Clear Core Values help transfer some of that judgement from the CEO to the leadership team.
They give leaders a common reference point for making decisions, addressing behaviour and holding one another accountable. As that shared understanding gets stronger, the CEO can have greater confidence that decisions made elsewhere in the business will reflect the culture they are trying to build.
That is part of what leadership clarity is meant to create.
A business where the right decisions do not depend on the CEO being in every conversation.
How Clear Is Your Leadership Foundation?
Core Values are one part of a strong leadership foundation. Core Purpose, a clear long-term goal and an A-Player leadership team complete the picture.
The Leadership Clarity Index is a 10-minute assessment designed to help small business CEOs see how clearly those foundations are understood and aligned across their leadership team.
You will receive a personalized score and report showing where your leadership foundation is strong, where greater clarity may be needed, and practical areas to focus on next.
If you know your business could be doing better, but cannot quite see what may be holding it back, the Leadership Clarity Index is a useful place to start.
