How to Define Company Values (So They Don't End Up on a Poster)

Almost every company has written values. Integrity, excellence, teamwork, innovation, customer obsession. They are on the wall, in the onboarding deck, and on the homepage.

Guiso, Sapienza and Zingales studied exactly this and published the result in the Journal of Financial Economics. The values a company proclaims do not correlate with its performance. What does correlate is whether employees perceive that leadership acts with integrity.

Which means the list is worth nothing on its own. What it is worth is what people see happen when that list collides with a hard decision.

Why the generic list discriminates nothing

There is a one-line test for whether a value is well chosen. Ask yourself whether any serious company would declare the opposite.

Nobody puts “mediocrity” or “questionable integrity” on the wall. If the opposite of your value is absurd, that value does not separate your company from any other, and it helps nobody decide anything. It is a condition of entry to the market, not a feature of your culture.

Values that work have an opposite another company could choose with pride. “Decide fast on incomplete information” has a legitimate opposite, which is “we decide when we have the data.” Both are viable cultures. Choosing one has consequences.

The other uncomfortable data point

Graham, Harvey, Popadak and Rajgopal surveyed executives at 1,348 North American firms. 92% said improving their culture would increase company value. Only 16% said their culture was where it should be.

That gap does not close by writing a better list. The distance between what is declared and what is lived is the problem, and a badly run definition exercise widens it. It adds one more promise the organization also fails to keep.

How to find the real values

A company’s values already exist. They are not chosen, they are discovered, and they are written into decisions already made.

Start with the expensive decisions. Get the leadership team in a room and ask for three concrete cases. A time they turned down profitable business. A time they let go of someone who was performing. A time they took the slow path. The real culture lives in those three stories.

Move to the people who left. Who did you miss, and who did you not? Both lists say what the company actually rewards.

Finish with the promotion question. Who was promoted most recently, and what did they do to earn it? The answer is your organization’s real manual of effective behavior, whatever the wall says.

A value that comes out of this exercise has a story behind it. One that comes out of a brainstorm has an adjective.

The cost rule

A value that never cost you anything is not a value. It is a preference.

For each one you write down, there has to be an answer to this question: what are we willing to give up to hold this? If there is nothing, take it off the list. People notice anyway, and every costless value lowers the credibility of the ones that carry weight.

How to write one you can use

Three parts, and all three are necessary.

A short name. Two or three words. If it needs a full sentence to be named, it is not defined yet.

What it looks like when someone lives it. Two or three observable behaviors. Not internal states. “Writes down the decision and who it affects before the meeting” is observable. “Is transparent” is not.

What it looks like when someone does not. This is the part almost nobody writes and the one that makes the value usable. Without the negative side, every manager builds their own interpretation.

Four or five values is the maximum. At eight, nobody remembers them and none of them settles an argument.

Where they plug in so they exist

A value with no consequences is decoration. It wires into four places.

Hiring. Which interview questions map to each value, and what answer shows the person already behaves that way.

Performance reviews. Values as a dimension separate from results. Someone who hits the number by running over everyone is a management decision, not an ambiguous case. The methods are in performance review methods.

Promotions. This is where the organization speaks loudest. A promotion that contradicts a value erases it faster than any announcement can install it.

Exits. The perpetual hard case. The person who performs and does not fit puts the entire list to the test.

Values are not sameness

The risk of the exercise is turning it into a filter for people who look alike. Values describe how decisions get made and what gets rewarded. They do not describe personality, style, or background.

A team can share the value “we decide fast on incomplete information” and still be made of people who process that speed very differently. That difference is what makes the team work, and the argument is in complementary teams.

Confusing values with climate is another frequent mistake, and it has its own article in climate vs organizational culture.

How we work on it at Talen.to

The value set is not written by an agency. It comes out of an instrument the team’s leaders answer, comparing what each of them says the company rewards against what the others say. The overlaps are the lived value set. The disagreements are the interesting part, because they show where leadership is not aligned and the rest of the organization already noticed.

That value set then feeds the engine. Every candidate is compared against the company’s real values, alongside the role profile and OCEAN+. The criterion ends up written down and open to argument.

If you want to start with the cheapest step, sit your leadership team down for an hour and walk out with three stories about expensive decisions. Your company’s values are inside them.