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The Problem With Core Values

One of these is not like the other... core values

Core values need to be a trade off. They need to differentiate a company.

Enron’s core values were integrity, communication, respect, and excellence. Let’s look at the opposite values– hire people without integrity who don’t communicate, don’t respect each other, and aren’t excellent. None of these values have trade offs. There’s no differentiator.

Other common values are passion, honesty, reliability, and efficiency. These are awful core values. They’re table stakes. It’s like saying “we want all our employees to be potty trained!” I would hope so. We don’t need “isn’t a serial killer” nor “brushes teeth” as core values. Core values as platitudes mean nothing.

One of our core values is open minded. When one is open minded, they’re willing to discuss topics that others may find uncomfortable. They acknowledge conflicting truths. They’re curious. No idea is sacred, and no one is easily offended. But there are industries where being open minded is a waste of time.

If you’re running a company with solely low level ops, you don’t need your low level ops people to be open minded. You don’t need every janitor, driver, or delivery person to be open minded. Low level ops should be screened for executing detailed instructions vs their open mindedness. For low level ops, close minded teams who follow instructions beat teams who have constant pushback.

Another of our values is first principles. It means we value someone’s ability to learn over pure experience. We still value experience, but it means we value ability more.

There can be different priorities of core values. Southwest had their top value “being the low cost airline”. They’re more than the low cost airline, but when there’s a conflict, actions that align with “being the low cost airline” prevail. Southwest was also known as the fun airline. You can do both. As CEO, the late Southwest co-founder Herb Kelleher was known for taking himself lightly and his job seriously, e.g., when getting in an argument with another company, he arranged a public arm wrestling contest between him and the other CEO. Herb’s actions led to Southwest’s unique, quirky culture.

Core values of a company can change over time. Facebook had the famous “move fast and break things”. That didn’t work once they became the incumbent. They could no longer break things while being criticized by governments. Similarly, the core values of a 5 yr old should be different from the core values of a 35 yr old.

Core values must align with culture. Culture is what people do when no one’s watching. The actions of leadership and employees matter. The larger the variance between actions and core values, the more people will disrespect the values. “Do as I say, not as I do” is what slimy politicians do. Great leaders lead by example.

Incentives matter. Incorporating core values into performance reviews is an easy hack to align culture.