When we hear the term business strategy, certain words come to mind. Corporate visions, missions, business objectives, core values, goals and so forth. These terms permeate modern business culture and are a central part of corporate communication. Let’s focus on one term - core values. Both small businesses and major corporations convey their core values to us through websites, presentations, media coverage, and so on. Now stop and think. What do core values actually communicate?
Core values are basic principles that form a foundation in corporate culture. They are communicated to us as customers, employees, investors, or other stakeholder roles. Essentially, core values are a segmentation variable, just as you can segment groups by age, occupation, income, roles or color preferences. The underlying assumption would be that there are some fundamental preferences that guide our behavior, in the roles we assume when interacting with a company. Thus a company projecting the” right values” to us would intuitively seem more appealing than one that doesn’t match our fundamental preferences.
Few people would argue against calling core values a convention. When something is a convention, it means very many are using it. Thus differentiating a company based on core values becomes increasingly difficult. Think of your bank, internet service provider or a travel agent. What are their core values? Don’t feel bad if you don’t remember, as we have a hypothesis that most people don’t pay more than a few seconds of attention to core values that don’t stand out. We assume this is because the communicated values are “too close to the core” of our preferences, as we will explain below.
Let’s take a look at some of the core values we have gathered from a handful of websites for major corporations. “Professionalism”, “Competence.”, “Integrity” and “Quality”. While all these are fundamental characteristics a company should comply with, they don’t help set the company apart from its competitors. Is there anyone who would actually deal with a company that is unprofessional and incompetent, or one with low integrity and shoddy quality? We hope not. In fact, we expect that those we deal with adhere to such elementary principles. But they are not core values we notice. They are too basic and too many companies flag them as their core values for us to react to them.
The values highlighted above are all “too close to the core” of running a business. Companies that wish to differentiate themselves based on their core values need to look outward from this inner set of traditional core values. Beyond terms such as “Professionalism” and “Competence” there are values such as “Interaction”, “Simplicity”, “Experiences”, and “Ownership”. Companies need insight into what values they should focus on to appeal to us, whether we are customers, employees or other stakeholders.
Six questions summarize the knowledge companies need to choose core values that make them stand out.
1. What is your company good at?
2. What are your competitors’ core values?
3. What is important to your stakeholders?
4. Are there unclaimed core values with high importance to stakeholders?
5. How large is the gap between what you are good at and the preferences of your stakeholders?
6. What will it take to close the gap?
