The Role of Values

Most organizations have "company values" or some form of a value statement, often a list of qualities like integrity, innovation, customer obsession and teamwork. While it is hard to argue against any of these things, "company values" often leave employees scratching their heads, unsure of how to apply them when tough choices arise.

What sets truly successful organizations apart isn’t just that they have values, but that those values guide how decisions are made, from top to bottom. So what is the difference between a company that has values and a company that lives by them?

What sets truly successful organizations apart isn’t just that they have values, but that those values guide how decisions are made, from top to bottom.

Learning from the Best

Some of the world’s most well-known organizations have cracked the code on values that not only inspire but also direct behavior and decision-making:

• Starbucks believes in “people before product.” This isn’t just a feel-good statement, it’s a core value that guides how managers make choices. Programs like tuition assistance and comprehensive benefits empower employees and signal that their well-being comes first. The result? Better service and higher product quality because engaged, valued employees contribute more reliably and enthusiastically.
  
  
• Netflix has taken a different approach: “We’re not a family, we’re a sports team.” This value highlights that the company optimizes for talent. The underlying message is clear: everyone needs to be a top performer for the current challenges. If someone no longer fits the evolving needs of the team - even top performers - they may be let go. This framework guides hiring, promotions and even letting loyal, talented people go when they are no longer the best person for the job.
  
  
• Amazon has a well known set of leadership principles that makes it abundantly clear that customer satisfaction comes first, that hard work is non-negotiable and that frugality is a virtue. Employees who resonate with these principles are drawn to the company, knowing exactly what will be expected of them.
  
  
• Apple embodies innovation and product quality. Every decision, from product design to customer service, reflects this unwavering focus. Employees and customers understand that while Apple products may come at a premium, their value justifies it. This clarity not only simplifies decisions but makes the entire company mission-focused.
  

How can you apply these ideas at your company?

Values and Competencies

First, it is helpful to distinguish between values and competencies. Values are the principles that guide behavior and decision-making, while competencies are the behaviors, knowledge and soft skills that are expected of employees in their roles. Competencies are the “how” of performance, while values are the “why.”

Amazon's famous leadership principles are actually a bit of both - they are values that guide behavior and decision-making, but they are also competencies that are expected of leaders. This is a powerful combination that ensures that the company’s values are not just words on a wall, but are lived out in the actions of its leaders.

The Values Pyramid

Second, to make values actionable, they need to be prioritized. If everything is a priority, nothing is. This means that when values conflict, employees know which one takes precedence. For example, if your company values both innovation and customer satisfaction, which one wins when a new product feature is delayed to ensure quality? If the answer isn’t clear, the values aren’t doing their job.

A values pyramid is a visual hierarchy of values, where each level supports the next. The base layer represents your most essential value, the one you wouldn’t sacrifice, even for short-term gains. Maybe for your company, that’s people first. The next level could be product excellence, then customer satisfaction, followed by fiscal health, and finally, at the peak, your overarching mission or impact.

Why a pyramid? Because, like Maslow’s hierarchy of needs, each layer builds on the one below it. If the foundation crumbles, everything above it is at risk. This structured prioritization means that if an employee is deciding between spending more time on a product feature or pushing out an earlier release to satisfy immediate customer demand, the pyramid both helps them understand what takes precedence and supports their decision if anyone questions it.

How Clear Values Make Self-Management Possible

The most successful companies are those where decisions don’t require constant approval from above. Employees can act with confidence because they know the values guiding the company and their place in the decision-making pyramid. At Netflix, for example, managers don’t need to justify releasing a high performer who no longer fits future needs. At Amazon, no one questions a team prioritizing customer happiness over short-term cost-saving measures. The alignment between values and action is seamless.

Bringing This to Your Organization

When you define competencies that incorporate your values and then measure performance against those competencies, your values become a very real, very concrete part of your company culture. Start by defining and prioritizing your values and communicate them in a way that every team member can understand and apply.

In the next post, we’ll delve into how this value pyramid can be practically applied through an OKR process, aligning company goals with each layer of the pyramid. By doing so, you can move from having a set of values that sound good to having a framework that drives action and results.

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