How to Create Core Values and Why They Matter
Core values aren’t just words—they are the foundation that drives the culture, decisions, and success of your business. They serve as the operating system of your organization, guiding behavior and informing critical choices at every level.
Defining core values is not an optional exercise. It’s essential to creating a business that’s aligned, purpose-driven, and capable of scaling without losing its soul. In this post, we’ll break down when to define your values, why they matter, and how to embed them into your company’s culture.
When to Create Core Values
In the early days of a company, the values of the founders often set the tone for the organization. They’re lived by a core group and aren't necessarily documented. But as the business begins to scale and bring on more employees, codifying and communicating the principles that you live and work by become more important.
The right moment to define core values is when your team is growing beyond the original founders and you need a clear, universal standard that everyone can follow. These values should be the 3-5 principles that are non-negotiable—the ones that define who you are, what you stand for, and how you operate.
The Value of Values
I believe that defining core values is a strategic imperative. I also believe that most teams don't put enough effort into defining them in a way that's truly actionable and livable. For me, Marc Lore sets the gold standard for this.
Consider his approach at Jet.com. Rather than a laundry list of generic principles, he zeroed in on three core values: work transparently, play fairly, and trust explicitly. These values weren’t chosen for feel-good reasons — they were chosen because they directly informed every action within the company. Transparency extended to sharing financials, valuations, and even board presentations with the entire team. It wasn't just talk; it was a set of instructions that informed the everyday.
Aligning Values with Your Mission
Your mission answers the question of what you’re trying to achieve. Your values define how you’re going to achieve it. These two must be deeply connected. So obviously, if you don't have a mission statement you can couple the exercise and create both.
Values should be polarizing. They should be strong enough to draw in people who align with them and filter out those who don’t. A good set of values doesn’t just attract talent or clients; it repels those who aren’t a fit. Not everyone is willing to Trust Explicitly, for instance.
Values that feel universal and agreeable to everyone aren’t truly values. They’re platitudes. True values should guide behavior and decisions — especially the hard ones. Values should help people know what the right thing to do for the company is even when no one's watching.
A Top-Down, Bottom-Up Process
The creation of core values is not a one-sided effort, especially as an org grows. It must be driven from the top-down, but also validated from the bottom-up. This is where true cultural alignment happens.
Start by engaging leadership to define the company’s non-negotiable values. These should come from a deep understanding of what has made your business and culture successful so far. Involve your employees in the process by gathering insights from those who live the day-to-day culture. What do they see as the behaviors that set your company apart?
Once you’ve distilled these insights into a clear set of core values, test them. Ask yourself:
- Will we be willing to make sacrifices to uphold these values?
- Are these values crystal clear in terms of how they translate into action?
- Do they reflect who we are, and where we’re going?
Operationalizing Core Values
Once you’ve defined your values, they have to be woven into the very fabric of your company. There are many meaningful touchpoints for values besides posters on the kitchen wall.
- Hiring Practices:
Use your values as the foundation for how you interview and evaluate candidates. If someone doesn’t align with your values, they’re not a fit. Design questions that probe a candidates' alignment with your value system.
- Onboarding:
From day one, every employee must understand not just what your values are but how they are expected to live them in their role. Make this part of your formal onboarding process.
- Performance Management:
Reward and recognize employees who exemplify the company’s values in their day-to-day work. Conversely, hold employees accountable when they stray from these principles.
- Decision-Making:
Major decisions should be measured against your core values. If it doesn’t align, you don’t do it. For example, Shake Shack’s decision to return its PPP loan during the COVID-19 pandemic was a direct reflection of its commitment to fairness and community. The company took a financial hit in the short term, but reinforced the very principles that made it a trusted brand.
This commitment to living your values, even when it’s difficult, is what differentiates great culture. As management expert Patrick Lencioni points out, real values cost something. If your values don’t occasionally cause short-term pain for long-term integrity, are they really values?
Final Thought
Finally, core values should be revisited regularly. Businesses evolve, and so should the interpretation of your values. While the principles should remain firm, the specifics may need adjustment to reflect new challenges, goals, and market conditions.
At Mutiny Branding, we help businesses define core values that matter — values that don’t just sound good but are lived every day. If you’re ready to create or refine the core values that will drive your business forward, let’s talk.
