Corporate value statements, company ethics, codes of conduct…the list goes on. At best, an invaluable business tool, at worse a meaningless, superfluous byword.
Many are poorly defined and open to interpretation, others alienate and some simply paint an idealistic image based on a predetermined set of values that a company believes its customers and employees would like to see.
But applied correctly, these statements can act as a fantastic catalyst to help a company grow. Top companies around the world such as Sainsbury’s, Virgin and Enron swear by them, attributing customer satisfaction, high levels of retention and successful recruitment, to their corporate value statements.
So do they matter, or they just a buzzword to help the executives feel better about themselves?
A Harvard Business Review study published in 2012 suggested that the idea of consumers wanting to have a relationship with a brand is more fiction than it is reality. Yet in a world where reputation and trust are generally considered great drivers of corporate value, surely a shared set of values between brand and consumer is of huge benefit to both parties.
Take Kellogg, for example, who recently produced its annual corporate responsibility report which focused on how the company is developing the marketplace, workplace, community and its environmental efforts.The report outlines Kellogg’s ‘K Values’, a set of guidelines which form the basis of its corporate culture and helps to foster a sense of community among employees. Kellog believes that loyal consumers see brands as a reflection of themselves and that in order to succeed in the marketplace, the workforce should mirror the values of their customers – who they are and what they value.
The question is: do customers really care what a company believes?
According to the Harvard Business Review suggests they do. Of the 7000 consumers who were asked about their relationship with major companies, 64 percent cited shared values as the primary reason. This was by far the greatest driver, with only 13 percent citing frequent interactions with the brand as a reason for having a relationship.
Reputation is equally as important. Now that consumers have immediate access to a company’s lineage, they expect more and have no trouble boycotting those that fail to live up to their increasingly high standards. Last year, a survey from Weber Shandwick and KRC Research found more than two-thirds of customers avoid buying a product if they dislike the parent company.
Evidently, values run deep and need to be translated efficiently into actions. More than just appearing to please customers, the way a company talks about them when they are not present, the level of service they provide and how they treat employees are all equally important. It’s about living the values you preach.
And if corporate values are to serve as an adequate foundation from which an organisation can support and drive the long-term business strategy, they need to be embedded within the processes of the company and the behaviours of leaders and employees at all levels.
One way to do this is through workshops and surveys across the business to gauge consumer and employee perceptions about the company’s current values and behaviours, with the goal of determining if those values are still relevant and durable.
More than simply being something that both parties can agree on, the act of a company living out the values it preaches can act as a great motivator to employees.
Numerous studies have shown a direct correlation between workplace morale and corporate results, revealing that employees who feel more engaged with their company generally deliver better performance and stay in their roles longer. This goes back to ensuring a company’s actions are in line with its value statements. If a company isn’t serious about living out its own value statement, there’s little point in having one.