Every business has core values. But are these values empowered by merely articulating them, or must they be entwined within the very tapestry of the company’s culture, business goals, and marketing strategies? This is one of the critical questions companies face as they grapple with the expectations of an emerging digital culture that is characterized by transparency, shared value, and sustainable ROI.
Core values are commonly held as the foundation of many an owner’s business philosophy. However, all too often they never go beyond a framed list on an office wall or an “about us” page on a website. By contrast, the sustainable business integrates and activates its core values through its strategic plans and operations.
In the execution of these values, C-suite leadership “play a fundamental role in attracting and retaining talented employees, making difficult decisions, prioritizing resources, reducing internal conflict, differentiating the brand, and attracting the right breed of customers.” In the end, though, employees are the most important element of a sustainable business, especially to the extent their core values align with and are activated by the business’ culture.
Here are two examples of companies that leverage their core values for competitive advantage.
Case Study 1: Whole Foods
Whole Foods Market is a growing its leadership in the quality food business. It is a mission-driven company that aims to set the standards of excellence for food retailers by building a business model in which its standards permeate all aspects of the organization. Found on the “core values” page of its website, the company’s Higher Purpose Statement reads, “With great courage, integrity and love – we embrace our responsibility to co-create a world where each of us, our communities and our planet can flourish. All the while, celebrating the sheer love and joy of food.”
In order to articulate its core values, Whole Foods created a “Declaration of Interdependence.” The Declaration includes the company’s “quality is a state of mind” mantra, which serves as a guiding principle for the C-suite and employees as they work to live the company’s core values through the food they sell, the employees they hire, and the interactions they have with the local communities they serve.
Here are seven ways Whole Foods translates its core values into actions:
- Product excellence – The company acts as the buying agent for its customers and not the selling agents for its manufacturers. It offers the highest quality natural and organic products available.
- Customer experience – It satisfies and delights its customers by focusing on five areas: extraordinary customer service, education, meaningful value at competitive prices, retail Innovation, and inviting store environments.
- Employee involvement – Whole Foods supports its team member through empowered, innovative work environments, self-directed teams, transparent information, and shared fate.
- Success – It creates wealth for shareholders through profits and growth.
- Sustainable outcomes – It cares about and invests in local communities and the environment.
- Win-win supplier partnerships – It seeks supplier partnerships that consistently share the company’s commitment to excellence and concern for social responsibility and the environment.
- Ongoing education – It promotes the health of its stakeholders through healthy eating education.
CEO John Mackey’s “Letter to Stakeholders” (excerpted):
“We walk our talk when it comes to our core values. Our primary goal is to satisfy and delight our customers. Through constant experimentation and innovation, we are redefining the retail food marketplace and further differentiating our shopping experience from other food retailers. We continue to expand and adapt our product offering in ways that speak to our core customers and to our authenticity and leadership role within natural and organic products.”
“Our business model is very successful and continues to benefit all of our stakeholders. We are executing at a high level, continuing to produce higher sales growth, comparable store sales increases and sales per square foot than our public competitors.”
Since its founding in 1980 in Texas, Whole Food’s values-centric business model has helped the company achieve sustained growth to 374 stores and sales of $14 billion in 2013. The company is projecting to increase to 500 stores and $25 billion in sales over the next five years.
Case Study 2: PathMaker Group
In 2003, entrepreneur Keith Squires founded the PathMaker Group as a specialist company in IT Security. His goal was to become recognized as an industry expert. He designed the company around five core values that have served as an anchor and driven all business behavior. Taken as a whole, these values have been the key to the company’s long-term survival and sustainable success:
- Personal growth
- Leadership and mentoring
- Creativity and thought leadership
- Work and family balance
- High-quality results
PathMaker Group’s five core values are listed on its About Us page, along with additional insight into how the company translates these values for competitive advantage:
“When making tough choices, our corporate direction and decision-making process is focused and clear because everything passes through this values filter. Ultimately, a strong, values-driven culture will always outperform a weaker one. And you, as an employee or customer, will reap the benefits.”
Keying off its five core values, here are five resulting behaviors that have helped sustain PathMaker Group over the last 10 years:
- Collaborative work environment of creativity and thought leadership – The company focuses on keeping staff in the office rather than reducing cost with work-from-home employees. Furthermore, as security consultants, 100% year-round travel is the standard. PathMaker Group maintains travel at 25% in an effort to support a balanced family life for its employees.
- Employees’ attitude of humility and service – PathMaker hires employees that fit its values, are hungry to learn, and strive for excellence in their work.
- Consistent high-quality results – Company values are a guideline for employees and software partners but consistent technical quality is the “service” on which the brand has built its reputation. The company is willing to make painful decisions to part ways, even if it costs the company significant revenue, when the fit is not perfect. This kind of values-based decision making maintains the long-term health of the organization
- Customer relationships must fit – The company has a 2-3 month trial period to evaluate if a new client fits its profile. “Does the customer treat our employees with respect? Can we produce high quality results and have a satisfied customer?” If the new client is not a fit, PathMaker cuts its losses and ends the customer relationship in order to retain the company’s carefully developed team and industry reputation.
- “Business of business people”- PathMaker sees that the most efficient and profitable way to operate a business is to give the employees a voice in how the company is run and a stake in its financial outcome. Accordingly, the company provides training and tools to help employees better understand:
- What winning means in business.
- How to track, measure, and improve performance.
- How to share in a self-funding stake in the outcome…to win or lose as a team.
The ultimate goal is for employees to think, act, and feel like owners.
- PathMaker is a thought leader and TV consultant on cyber security for CBS and FOX.
- The company’s values have provided an advantage in recruiting quality talent and keeping employee retention high.
- It has developed partnerships with IBM and Oracle.
Whether your company is a startup, SME, or a global multinational, you can leverage the integration of core values with business goals, strategy, and operations to gain competitive advantage. As former President Bill Clinton suggests, “In the future, corporations will care less about maximizing profits and more about employees and society.”
- What are some other examples of brands that leverage core values for competitive advantage?
- Do you think it would be easier to market a company that lives its core values? If so, why?