Corporate Values: Ditch the Pretty Words & Warm Fuzzy Feelings
Values are the most powerful force on earth. They drive everything that people do. It’s time we get serious about how to identify them.
by David Allison
In a recent article (“What Does Your Company Really Stand For?” Harvard Business Review, November/December 2022) authors Paul Ingram, a professor at Columbia Business School, and Yoonjin Choi, an assistant professor at London Business School, make a strong case for the human resource benefits accrued when an organization prioritizes alignment between employees’ values and those of the organization itself. Reduced churn, higher employee satisfaction, better teamwork…these (and more) are all the net result of values alignment.
But why stop at the HR department? Why not get similar benefits across the entire organization? Here’s how.
From social change to politics, from the future of work to the future of leadership, and from the meltdown at Twitter to Patagonia’s founder giving the company away to benefit the planet, it’s not difficult to see how the influence of human values is shaping the world around us. In fact, it’s fair to say we’ve entered an entirely new economic era. It’s no longer the experience economy or the sharing economy—we live in the values economy now, and values have visibly become the most powerful force on earth.
So it stands to reason that organizations that harness the power of human values across more stakeholder groups than those that Ingram and Choi discuss from an HR perspective will benefit in an even broader and more inclusive way. Moreover, if the values of the organization are a by-product of the values of individuals—as Ingram and Choi suggest—including the values of all participants in the organizational ecosystem will create benefits for everyone involved.
Imagine an organization guided by the shared values of employees, customers, vendors, shareholders, and members of the communities in which they operate. Those five stakeholder groups would mirror the oft-discussed principles of a very smart organizational philosophy (with an unfortunate name that sounds like an assault with a blunt object) called stakeholder capitalism. Proponents of stakeholder capitalism – of which there are many [1] – argue that the prime directive of an organization is not to merely increase shareholder value but to benefit everyone in the organizational orbit.
Now let’s future-proof the organization too.
Values alignment among the five stakeholder groups included in the stakeholder capitalism model only considers the people who are metaphorically “already in the room.” To future-proof the end result of this process and ensure organizational values are not locked in amber, the values of future employees and the customers of tomorrow must also be included.
But there are problems with current values identification methods.
In their well-written and thoughtful article, Ingram and Choi make reference to methodologies they use to help individuals determine their own values and the steps an organization can take to derive organizational values statements from those inputs. Their step-by-step process is as good or better than most we’ve seen.
But values are far too critical for discussion-based subjective evaluation of qualitative information by individuals or committees, no matter how well-meaning or thoughtful they are. Values are the most powerful force on earth, and the risk of getting it wrong is monumental. What’s called for is a data-driven approach that removes as much of the methodological bias and human error as possible while still providing an opportunity to evaluate and interpret the findings in a way that acknowledges the deeply personal nature of values-based data.
In other words, just talking about values is problematic. Just data about values is problematic, too. But talking about what the data has revealed about values gives us the best of both worlds.
Here are just two problems with purely qualitative approaches to values identification:
The truth can be hard to see. When asked to identify their values, people will quite naturally want to portray themselves as good people—for their own benefit and in the eyes of others. Who will admit (to themselves or others) that they are driven by values like wealth, ambition, or social standing over values such as family, belonging, or environmentalism?
Anything can end up being termed a value. How do you argue with words like excellence, quality, or collaboration once someone has claimed them as a value? The number of poetic and inspiring words that will crop up is endless. Frustratingly, different people might actually be trying to communicate the same thing but using different words to describe it. Identifying values accurately across multiple stakeholder groups benefits greatly from a common nomenclature and taxonomy, which should be derived from statistically accurate data to avoid subjective decisions in its very design.
So we turned values into data.
Depending on who you talk to, Peter Drucker may or may not have famously said, “You can’t manage what you can’t measure.” No matter the origin of that old chestnut, the sentiment is inarguably true. To be managed, we must treat human values like any other critical business metric. They must be measured and tracked with data that can stand up to the most rigorous tests for accuracy and confidence.
We came to this conclusion—that values must be turned into data—in 2015 and launched the global Valuegraphics Project to create a worldwide map of core human values. And while continuous improvements are being made, the Valuegraphics Database is now complete. This dataset allows us to identify shared values across any set of stakeholder groups, anywhere on earth with a +/- 3.5 percent level of accuracy and 95 percent confidence.
It’s been a long haul with a team of translators in 152 languages. We’ve analyzed the results from 750,000 surveys (containing, for example, more than 3.5 million long-form responses) that identified the core human values for the population of 180 countries in a random, stratified, statistically representative sample. We’ve collected qualitative and quantitative feedback on values, of course, but also on wants, needs, and expectations relating to those values.
There are fifty-six core human values that drive us all. That’s not many when the planet's population recently peaked at more than 9 billion. Those fifty-six human values, derived from data, can now be used as a common nomenclature for organizations and individuals to identify their values. Granted, those fifty-six core human values branch out to more than 8,000 variations we have coded for extrapolation. Still, that there are only fifty-six values that drive us all means we are not as dissimilar from one another as many would like us to believe. And now we have a common language to unearth those similarities.
Values can emerge without bias.
A data-driven approach removes much of the unintended subjectiveness from values-alignment work and makes intentional manipulation of outcomes much harder to achieve. For example, the CEO might be determined that tradition is a value for the organization. But if you believe that organizations are, as Lee Iaccoa said, “nothing more than a bunch of human relationships,” and the data shows that your stakeholder groups do not value tradition, it can’t be a shared value no matter how much the CEO wants it to be.
This is the fix we’ve been looking for.
A recurring criticism of stakeholder capitalism {2} is the impossibility of steering an organization in a way that recognizes the sometimes-competing interests of so many stakeholder groups. But consider this: if you think of the shared values of all your stakeholder groups as a North Star, they become a GPS system that can guide the organization to whatever objectives are necessary for success. While you are at it, you might even reframe success metrics in a way that aligns with the shared values that work for all your people, no matter what stakeholder label they might wear. After all, we are all values-driven, and in today's values economy, the organizations that act on this truth with accurate insights will thrive.
About the author: David Allison is a human values expert, founder of the Valugraphics Project, two-time bestselling author and international speaker.
{1} Claudine Gartenberg and George Serafim, “181 Top CEOs Have Realized Companies Need a Purpose Beyond Profit,” Harvard Business Review, August 20, 2019. {2} Steve Denning, “Why Stakeholder Capitalism Will Fail,” Forbes Magazine, January 5th, 2020.