System of Values

Elements of Enterneering^®/Culture/System of Values

podcast

Corporate culture is deeply rooted in the feelings, thoughts and actions of the people within the organisation. It results from the sum of the deeply anchored values and emotions of every individual in the company. It also arises in non-orchestrated cooperation. The sum of the individual values in the organisation shapes its collective identity. The overall dominant identity characteristics shape the collective value system of a company. If most of the collective value system is balanced, a sustainable corporate culture can emerge from it. Entrepreneurs are well advised to consciously and actively shape the value system within their company rather than leave it to chance or to the unguided forces within the organisation.

CORPORATE VALUES

Corporate values define the characteristics that are valuable to the company. In other words, they represent the ideals that are desirable for the company and guide the actions of all individuals in the organisation. Since these ideals are always individual and subjective, these values should also align with the personal values upheld by the company’s management. Otherwise, it can lead to a sustained conflict of interest at the highest level of the organisation, with a detrimental impact on the corporate culture. At least at this point, it becomes clear to all entrepreneurs that the implementation of a corporate value system cannot be successfully delegated. After all, the rituals, standards and rules should be authentically exemplified within the corporate community and thus made tangible for employees, customers and business partners.

The individual values within a value system can be divided into:

Core values, which are consistently represented by the company internally and externally. They serve as a superordinate or generally valid orientation for action and behavioural standards, or a basis for decision-making. Core values are also recognisable by and tangible to external third parties. In a way, these values form the DNA of the company.

Aspirational values, which the company strives to embody and needs in order to remain competitive and to succeed in future. These are the values the company needs to work on, to create and sustainably implement them.

Permission-to-play values, which form the basis for daily collaboration and behaviour among individuals in the company. In other words, they are values that regulate the 'how' of personal interactions and task completion.

Accidental values, which are those values that have not been defined in any of the previously mentioned categories and therefore do not align with the explicitly desired values in the company. These values can be temporary or permanent and can have positive or negative effects on the organisation. Positive, or beneficial, accidental values can be accepted or consciously integrated into one of the desired categories. Negative values, on the other hand, must be recognised, assessed and ideally dealt with so that they do not become a risk or hazard.

WHY?

The digital age is characterised by increasing volatility and high rates of change. Demographic developments and climate change create additional pressure for change and innovation. In this context, uncertainty increases. People are facing challenges that lack immediate solutions. However, they still need structures in which they can live and work, and they look for real basic values with which they can identify. In an era of digitalisation, global expansion, resource constraints and increasing employee turnover, companies must provide their employees, customers and partners with opportunities for personal identification with them (the companies).

A strong corporate value system:

is an important point of orientation for decision-making and personal behaviour,
has a meaningful, confidence-building and motivation-enhancing effect,
increases the loyalty of individuals within the company,
fosters a sense of identification with the company,
boosts motivation and employee loyalty,
promotes the external reputation and credibility of the company.

Towards external third parties, a value-oriented and genuinely embodied corporate culture can create unique selling points and secure important competitive advantages. Within the organisation, such a culture is a unifying element that strengthens motivation and loyalty and promotes innovation. This also results in a strong employer brand, among other things.

HOW?

The sustainable implementation of a value system in a company usually starts with a project. However, it is certainly not a one-time action but rather, a continuous process. The implementation can be divided into three stages: definition, communication and application.

DEFINITION
The first step involves defining the most important contents of the value system, which raises the first cultural or, to a certain extent, value-oriented question, namely, about the group of participants. If the definition is made within a larger, or at least a representative, group, this increases transparency and accuracy, which, in turn, ensures greater acceptance. Entrepreneurs should reflect on their own values. It is advisable not to solely dominate the definition step but to allow ample space for group work. Nevertheless, in owner-managed companies, the values and expectations firmly anchored in the personal and entrepreneurial nature of the owners should be adequately considered. Otherwise, the value system creates a high personal pressure to change. This is because, without the authentically exemplified contribution from the owners, a value system cannot develop positively in the long term.

Do not copy! The definition of the most important values should align with the culture and essence of the company, no matter how dissimilar they may be to the value systems of other companies. It is natural to use other examples as a guide. But the top priority should be the company's own strategy and culture, which the value system should serve and help succeed. Ideally, a strong value system can make a company unique.

Be realistic! Regardless of whether they are basic values or aspired-for values, they must have a reliable connection to real circumstances. If the gap between reality and the desired values is so large that most employees cannot envision achieving them in the foreseeable future, graduation, or intermediate steps, should be considered. In general, prioritising feasibility instead of quantity is crucial. In practice, limiting the number of values to single digits has been proven beneficial. Care should be taken to ensure that values are described in a simple manner and do not involve any difficult technical terms or complicated phrasing.

Allow individuality! If the collection and evaluation of potential values result in rare, or possibly even bizarre, descriptions, these should be seriously reconsidered. After all, the values pertain to the authentic nature and desired identity of the company and to the fact that being unique may be both necessary and desirable.

Know the effect! Before taking a final decision about the possible contents for the company's value system, the individual values should be considered for their internal and external impact. The goal is not to discard at first glance all those values that have an unwanted or negative effect. It is to understand the consequences associated with them and determine the accompanying measures that need to be taken.

COMMUNICATION
The value system of a company can be communicated internally as well as externally through existing, known channels. It is advisable to incorporate the value system into the documentation and communication of the corporate philosophy, strategy or work instructions. Furthermore, a strong value system can and should be actively integrated into image-building in the sales, labour or procurement markets. When it comes to employees in the company, the presentation of the value system should be an integral part of the onboarding process and within the recurring employee information.

APPLICATION
As with most behavioural elements of corporate management, the effectiveness of the value system primarily relies on its authentic and consistent implementation. Good intentions or goals must be followed by recognisable actions. The consideration of the value system must be experienced in day-to-day business operations without being artificially imposed. In this regard, the role of company management and executives is paramount. It is an essential aspect of leadership work to ensure that corporate values are firmly anchored in the corporate culture. This is done through their own actions, or by emphasising or even rewarding value-oriented thinking and action in the workforce. Conversely, violations of the value system should also be identified and actively addressed. Strong corporate values persist even in times of crisis. Nevertheless, they can change over time.

EXAMPLES

As described earlier, a company's value system should not be a compilation of current trends or 'award-winning' values from other companies. Furthermore, it should not consist of values that people should anyway have, to be in accordance with the law of the land.

Community

Mutual appreciation, respectful interaction.
Honesty, open error learning culture.
Solidarity, mutual support.
Transparency, clear and open communication.

Business

Customer experience, 'customer benefits come first'.
Business relationships are valuable.
Performance and excellence are the goals.
Profitability takes precedence over sales growth.

Society

Accepting social responsibility.
Climate protection, ecological awareness.
Resource conservation, sustainable consumption.
Human rights, anti-discrimination.

Companies and their owners must stand by the value system and not just accept it as a necessary feature of the company. They should not strive to adopt particularly trendy or common corporate values. Values that cannot be established without compromises, due to the corporate culture or business model, should not be adopted. Entrepreneurs must be aware of their role models and not underestimate the impact of their personal actions on the company. What truly matters is the authentic application of these values, rather than how they are documented and published. Entrepreneurs should never underestimate the effect of their own example on the workforce; employees take their cues from the top management. Deficient behaviour at the top of the company is readily and quickly copied within the organisation. To achieve the desired values, it is important to be aware of and evaluate any current deviations from the target image and define any necessary measures to reach the goals.

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