David Lazarus of the LA Times recently derided the idea that corporations should operate based on a set of core values. He writes, “This kabuki play of corporate values is little more than feel-good propaganda, which may be beneficial from a team-building or marketing perspective, but has nothing to do with a business’ day-to-day operations.” In essence, Mr. Lazarus is skeptical that corporations operate for any reason other than to make money. And that any corporation that does so is merely being disingenuous. “there’s nothing wrong with making money or the pursuit of profit. What’s wrong is pretending you have loftier goals in mind.”
It’s understandable that so many of us distrust corporations that tout their values. There are so many examples of companies acting in ways that are unethical, illegal, or even injurious to people and the earth. Enron’s scorched earth tactics were in direct contrast to their supposed values – “We do not tolerate abusive or disrespectful treatment. Ruthlessness, callousness and arrogance don’t belong here.” And Lazarus’ piece also cites Wells Fargo as an example of the sham of corporate values, “Wells Fargo says it has five core values that ‘guide every action we take.’ These include placing customers ‘at the center of everything we do,’ and being ‘committed to the highest standards of integrity, transparency and principled performance.’” Clearly its recent fines for opening accounts without customers’ consent would say otherwise. But I would argue these examples only further demonstrate the importance of strong values for today’s successful companies. When the values aren’t genuine, when they aren’t internalized and taken seriously, they’re just words. They don’t really guide how the company operates, they don’t inform decision-making and they don’t mean anything to customers. It’s worse than having no values at all. It fosters the cynicism and ill will that so many people feel towards “soulless” corporations.
But when companies do take values seriously, they can be the engine for societal impact, not just making money. Take Patagonia as an example. They embrace environementalism as a key part of their mission: “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.” What separates them from companies like Enron and Wells Fargo is their actions are actually aligned with their stated values. For example, Patagonia has created a way for people to sell their used Patagonia products. Their Worn Wear program lets customers trade in old clothes for credit, and provides a way for others to purchase used items at a lower price. Patagonia also provides detailed guides to repairing old and damaged clothing. Patagonia also encourages its employees to participate in environmental causes, and gives 1% of its sales to the same. If they were solely focused on profit, Patagonia would ignore the environmental impact of consumption, and just encourage people to purchase more and more new items. But they have instead adopted an approach which is more environmentally friendly. Brands that choose values over profit “walk the walk” and are seen as authentic. Patagonia’s devotees wax rhapsodic about the company. And come back again and again to purchase their products. Values are ingrained in its culture and in its operation. It’s a far cry from Wells Fargo and Enron, whose “values” are nothing more than empty promises. If more companies actually operated according to their values, we’d be much more willing to believe them.
The benefits of being values-focused extend beyond just making customers more loyal. Research shows that millennials as employees are not willing to settle for companies that exist solely to make a buck. They are looking to work for companies who have values that match their own, and are willing to make sacrifices in career advancement to ensure it. The expectations of employees and consumers are ratcheting up. As Lazarus himself points out, “Two-thirds of consumers surveyed by the firm said they stopped using a company’s products or services “because the company’s response to an issue does not support their personal views.” Companies are having their feet held to the fire in a way that’s different than in the past. Those that don’t have clear values, and demonstrate their importance by their actions will be at a great disadvantage.
The Fundamental Group is wholly devoted to helping companies find their true values – values that go beyond the profit motive. We believe organizations have the ability to make positive change for people and the planet, and companies lacking clear values, and the actions to back them up, will suffer over time. So over the next few posts, we’re going to look at something we call The Fundamental Human Values. These are values around which an organization can operate to inspire customers, employees, while also driving growth. Values are the foundation for brand positioning, and should inspire all of your content.
What are your company’s values, and how does your organization demonstrate them through its actions? Let us know in the comments.