Core Values Generator

Why most company values fail

In 2002, Patrick Lencioni opened an article in Harvard Business Review with four words: Communication. Respect. Integrity. Excellence. They were Enron's values, printed in its 2000 annual report¹. His point was that most values statements are "bland, toothless, or just plain dishonest," and that empty ones do harm: they breed cynical staff and undermine managers' credibility¹.

Research backs him up. Luigi Guiso, Paola Sapienza and Luigi Zingales, writing in the Journal of Financial Economics in 2015, found that "proclaimed values appear irrelevant" to how a company performs². In the working version of the study (NBER, 2013), 85% of S&P 500 companies had a culture or values section on their website. The most common values were innovation (80%) and integrity and respect (70%). How often or how prominently a company listed them showed no significant link to its results³.

What did matter was what employees saw. Using staff surveys from more than 1,000 US firms by the Great Place to Work Institute, the authors found that when employees rated top managers as trustworthy and ethical, the company tended to do better on productivity, profits and hiring appeal³. The authors say plainly that this shows a link, not proof of cause³. The lesson still holds: a value counts when people see it lived, not when it is posted.

How to write values people can use

Sort before you write. Lencioni splits values into four kinds¹. Core values are the few you would never trade away. Aspirational values are ones you want but do not have yet. Permission-to-play values are the minimum any decent employer expects, such as honesty. Accidental values are habits that grew up without anyone choosing them. Only the first kind belongs on the list. Jim Collins's workshop guide for the Collins and Porras vision framework gives the same warning: mixing hopes in with what is already true "will create justifiable cynicism"⁴.

Write a behavior, not a noun. A single word like "integrity" tells nobody what to do on a Tuesday. Say what someone does, in a situation that actually comes up.

Name the cost. A real value makes you give something up. If no sensible company would argue for the opposite, it is permission-to-play, not core. "Share bad news early" has a real opposite: many firms protect the client relationship by staying quiet until they have a fix.

Keep it short. The Collins guide asks each group to settle on three to five values⁴. More than that, and people stop remembering them.

Weak values and stronger ones

The company below is invented for illustration: a 40-person home renovation firm.

Each line on the right tells a new hire what to do, and each has a price the owner has agreed to pay. That price is what makes it believable.

How to test a value before you keep it

The Collins guide asks each person to test every candidate value alone before the group decides⁴. Its questions, in short:

• Would you build a new company around it, in any industry?
• Would you keep it even if it became a competitive disadvantage, and the market punished you for it?
• Do people who break it again and again simply not belong here?
• Would you hold it yourself even if you were never rewarded for it?

Add two checks of your own. First, find the proof: name a recent decision where the value cost the company something. If you cannot, it may be aspirational. Second, ask a newer employee which values they see in practice. The answer shows your accidental values, and sometimes shows a core one you forgot to write down.

Lencioni also warns against treating values as marketing. He tells leadership teams it is fine, even better, if the values never reach a website or a T-shirt⁵. Agree on the ideas first and leave the wording for later⁵.

Living them: hiring, decisions and exits

Lencioni's last rule is to weave core values into everything¹. Three places matter most.

• Hiring. Turn each value into an interview question about past behavior. For "bad news travels first": "Tell me about a time you had to tell a customer something they did not want to hear. What did you do, and when?" Score the answer before discussing it.
• Decisions. When the leadership team is split, ask which option the values point to, and say it out loud. A value that never settles an argument is decoration.
• Reviews and exits. Rate people on how they work, not only on results. Netflix publishes its values as behaviors ("you admit mistakes openly and share learnings widely") and writes that "it's easy to talk about values and harder to live them"⁶. Its "keeper test" asks managers whether they would hire each person again⁶. You do not need to copy its approach. The point is that the values show up in who stays.

A 2017 NBER working paper by John Graham and colleagues surveyed executives at 1,348 North American firms. 92% believed improving their culture would raise their firm's value, but only 16% said their culture was where it should be⁷. The authors concluded that everyday norms matter as much as stated values⁷. The gap between the two is where the work is.

What values do not answer, and what to do next

Values tell people how to act. They do not say where the company is going or what it will do this year. Pair them with the rest:

• Why the company exists. Start with the Golden Circle, then the mission statement generator.
• Where it is going. The vision statement generator covers the long-range picture.
• How it runs. EOS and Scaling Up both put core values on the same page as goals, so they get reviewed with the plan.
• Whether the team agrees. Drafting values is a good task for a leadership team alignment session. Have each leader list values alone first, then compare.

Treat the list from this tool as a first draft. Keep only the values that pass the tests above and have already cost you something.