- Dorothy Spinacki & Christa Dhimo
The Start-Up Corner: Values Create Value
"But we're a small company-- a start up !! Values are so corporate...."
"We don't really need to go through that exercise-- we know our values and we need to get going..."
"Well, anyone who doesn't share our values simply isn't a good fit. It's that simple, and we'll know it when we see it. Let's not make this complicated. We know what our values are, no need to formalize them."
Time and time again, through the history of natural law, functional (and dysfunctional) families, military successes or failures, and community wins or losses, one core element turns the gears from slow speed to regular speed to high speed without the wheels falling off, and that is a sharing of clear, easily understood, observable core values that unites the people involved.
Values are the basis of behavior that leads to decision-making (good or bad) and performance (good or bad).
We worry about start-ups and small businesses that devalue Values before they even get started. And this topic is just as important for small businesses, but we're making this post about start-ups because that's where the tone starts for how you view Values.
So let's begin...
Values Point #1: Be Sure Your Investors Are Aligned With Your Values
What you value and your core values (core behaviors and norms) will be reflected in who you hire, and who you hire will have a large impact on your performance and, ultimately, your Investors. Don't expect to attract and recruit top performers who you deem a perfect fit skill-wise, yet you do not meet their expectations on values, and take care in hiring those who meet your needs skill-wise (or Investor expectations) but do not demonstrate the values (behavior and norms) on which you wish to build your business.
For example: do you talk about treating people with respect and dignity and do your Investors do that, too? Do you behave ethically even if no one is looking, and do your Investors do that, too? Do you listen to your customers and teammates to find and act on the right improvements, and do your Investors expect that, too? Do you put your employee development on the same level as your business development, and do your Investors-- if they are that involved in the day-to-day-- expect that, too? (after all, who is developing your business?)
Here is a real-world example of a start-up leader talking to his employee after the Investors reviewed a factual datasheet, didn't like the numbers, dismissed the work as incorrect and came down on the Analyst who did the work:
"I realize the Investors misunderstand your role and do not completely understand our market, so they think your work is wrong. I realize now that I could've done better to explain things to them. Unfortunately, that ship has sailed and now they think your work is not up to par with your pay grade, even though I know you are the foundation of this business, saved us from regulatory risk and financial issues, drove several functions as we staffed, and you are a primary (if not the primary) reason we are successful. The evidence of your impact here is profound and well-documented, and the team you helped me build knows it fully. I have reviewed your performance with the Investors, including how you met or exceeded the goals you and I agreed to, and they felt you should have been doing different things-- some of them actually being part of my job as the top leader, and some of them completely unrelated to your job description. There's complete misalignment, even in how they believe we should be going about our work here.
"My hands are tied, though. The Investors are only here twice a year and despite our weekly discussions with them on revenues, they have no interest in learning about how we operate as a business or the margins you are growing, both commercially and operationally. They feel they run the business and they want me to demote you. Again, my hands are tied. Sorry."
There is a lot going on in this case, which is a true story, but the bottom line is that lack of alignment and behavioral expectations happens more than not in a startup environment, including with Investors. Make the conscious effort to establish formalities, including Values. In this case, the circumstances would have been very different if part of the Value System included honest two-way discussions with each other and with the Investors, where there was agreement about the definitions and roles/responsibilities associated with reporting, honest reviews, open communications and handling conflict.
Values Point #2: It's Easier Than You Think
Following on from our real-world example above, here's how you can reframe the same situation while living values that create an open, safe and performance-driven company where you can retain your first-line hires and performers:
"I realize the Investors misunderstand your role, and I am working on that. Our values mean something to us, and I take seriously the Integrity, Respect and People values of what we represent here. This is especially critical in start-ups when it's all-hands-on-deck. The evidence of your impact here is profound and well-documented, and the team you helped me build knows it fully.
"I am reviewing your performance with the Investors, and based on our shared values, I feel confident we can resolve this. Part of our discussions include how you have met or exceeded the goals you and I agreed to, and explaining that while they feel you should have been doing different things, we have a set of core values here that dictate we treat people fairly, with dignity and respect.
"Regardless of how they feel about you, particularly as they are not involved in the details of your work here, we run our business in a way that inspires performance. Additionally, we are here to run a holistic business, and in the end the Trust value is the one that binds our team together. Give me a couple more weeks to sort through this."
It is well documented that while focusing on work results drives short-term performance, overall behavior shapes how those results are derived. The "how" of driving results will have a far longer impact on performance momentum than anything else in your organization.
If you think creating and living by Values is "too corporate," or if you feel you don't have time to create them and sustain / mindfully evolve them, consider this: consistent and prolonged behaviors create norms, and both behavior and norms eventually become your values. You have the luxury of creating your Values early on and letting them drive impact... OR, you can let present-state and reactive behavior create them haphazardly for you. Which would you prefer?
Values Point #3 and Bottom Line: How Do You Want to Drive Performance?
Yes, I know. It's mushy stuff. It takes attention away from more tangible right-now needs. It may feel like a waste of time when there's so much at stake.
When a growth mindset from leadership means a growth mindset for the company, and core values shape the foundation and set the tone for your culture, you are setting the tone for sustainable, positive performance.
For those of us who have been involved in multiple companies across several industries, we all know that behaviors and norms drive your culture, and your culture drives performance. Not goals. Not leadership. Not product. Culture... and that stems from shared Values, whether formalized or not.
We always recommend foundational elements be your first formalized elements.
Values create values. (enough said)
We know that launching a new or transforming an existing organization isn't simple, but it can be easier with the right advisors and doers. If you have additional questions about this topic or how it can impact your business, contact us. Let's see what we can do for you.
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