Core Values

Core Values ~ We have mentioned these two words several times in the past few weeks on a number of blogs.  Today, we are going to go deep in defining what we mean by core values.  First of all, they are not business policy or business strategy.  They have little to do with what our competencies are or what we hope to correct from our weaknesses.  They are not business norms or quick changes that a company makes to address issues.

Core Values ARE those beliefs which function in forming the foundation where we work and conduct ourselves.  Typically an organization will have multiple core values that revolve around our external customers, employees, ethics and environment.  It is ideal to have no more than a handful of core values/beliefs that you will have the courage to act on them on behalf of the company and the environment.  In addition to our small group of core beliefs there are many key values that we will strive for in conducting business operations in a professional and ethical manner and these can be more related to policy and operations.

Typically the core values are stated in the mission statement of the company.  The mission statement will describe the organizations’ present capabilities, customer focus, business activities and business makeup.  The core values will be the base four quadrants similar to the drawing below:

As you can see, in this hypothetical model the core values of Integrity, Vision, Teamwork and Passion are highlighted.  You can also see several key values that are noted as “subsets” of the four principal beliefs.  The manner in which we treat our employees and customers are established in the root of our core beliefs. 

Over the years, there have been some wonderful examples of how a company showed its character by upholding their core values.  I remember clearly the “Tylenol” scare in 1982 when criminal activity caused major problems with consumer product that was tampered with.  J&J, the maker of Tylenol took it upon itself to take ALL product immediately off the shelves and suffer billions of dollars in losses.  It would have been so easy for the company to cast blame on someone else since it was “not their fault”.  All too often in the business world, companies cast blame rather than live and take action on their beliefs. If memory serves me correctly, the total number of bottles that were found tainted from the recall was seven and most but not all of them were in the Chicago area.  The company quickly recalled all product in distribution.  This recall affected the financial status of the company and had large impact on shareholders of the company.  However, J&J was “living” its corporate credo.  Written in 1943 by Robert Wood Johnson, son of one of the company’s founding brothers, Johnson & Johnson’s four-part credo sets down its corporate values. It says the company must:

1.      Meet the need of consumers with high-quality products, keep costs low and fill orders promptly while ensuring suppliers and distributors can make a fair profit.

2.      Ensure every employee’s dignity is respected. Pay must be fair and adequate, and working conditions clean and safe. Employees must be free to make suggestions and complaints. Managers must be competent and their actions just and ethical.

3.      Be a good corporate citizen. The company must support the community, charity, pay its fair share of taxes, protect the environment and encourage civic improvements and better health and education.

4.      Make a sound profit. When the company experiments with new ideas, invests in new equipment, launches new products and admits its mistakes, investors should see a fair return on their investments.

Today in 2012, the following was taken off their website.  “The values that guide our behaviour are spelled out in Our Credo, which puts the needs and well-being of the people we serve first… crafted Our Credo in 1943 before Johnson & Johnson became a publicly traded company. …Our Credo is more than just a moral compass. We believe it is a recipe for business success. The fact that we are one of only a handful of companies that have flourished through more than a century of change is proof of that.”

We have also witnessed companies that failed to live up to their beliefs and are now no longer in existence.  Arthur Anderson one of the largest and most respected Accounting firms, was demolished due to fraud and mis-representation.  This company had been in existence since 1913 and was one of the most respected companies in the world prior to fraud charges in 2002. The rise and fall of Enron is an important, complex story. In its early days Enron did the right things for the right reason and garnered substantial credibility. Later successful operations were replaced with the illusion of successful operations. In the last phases Enron milked its credibility to sustain operations through loans. When its credibility with lenders crumbled the loan funds dried up and the corporation imploded.  Last week, the story that made news was the public resignation of a Vice President from Goldman Sacks.  In that resignation, the company’s disengagement from it’s core values was the center point of his grounds for leaving.  Although this was one person who was obviously disgruntled, time will tell as to the eventual outcome.






History repeats itself.  Do the right thing always and live your core beliefs.  It is the right thing to do!