Organizations that align employee behavior and decision-making with guiding principles will achieve better business results. Organizational guiding principles, which may also be known as company values, company principles or company beliefs, summarize what an organization believes and the behaviors it agrees to live by every day. They promote thinking and actions that are both authentic to the organization and also align with its future goals.
During times of crisis, guiding principles help organizations align their actions through response and recovery. Organizations can demonstrate the business case for guiding principles through these outcomes:
1. Progress toward the organization’s purpose or mission
An organization can more quickly and effectively achieve its purpose or mission when expectations for employees are clear. Using guiding principles to set clear expectations and a shared understanding for desired actions, attitudes and overall mindset enables employees to more effectively collaborate to achieve business outcomes. Without guiding principles, there can be a lack of clarity and direction, which stalls progress toward the organization’s purpose or mission.
Consider an organization, for example, whose purpose is to empower underserved communities. This organization needs guiding principles that inspire action toward its purpose. It might have a value of advocacy and give employees the time and resources needed to support — and advocate for — underserved people in their communities. These guiding principles empower employees to better serve their key stakeholders and contribute to the purpose or mission. Organizations fail to make progress toward their purpose or mission when they don’t have clear, empowering guiding principles to support it. Learn more about the risks of purpose, mission, and values misalignment here.
2.Better employee engagement
Employees are three-and-a-half times more likely to be engaged when they can see how their work connects to the organization’s goals. Guiding principles, when activated effectively, establish this connection by demonstrating how the organization benefits when employees bring them to life. They also create a shared language across the organization that not only provides clarity and direction on how employees should act and make decisions but also builds camaraderie between colleagues.
Employees are more motivated, engaged and effective when they understand their role in activating guiding principles and why it’s crucial to the organization. Organizational guiding principles increase employee engagement and create a cohesive group of employees that works together to achieve business outcomes.
3. Improved recruitment and retention
Organizations can more effectively recruit and retain talent when they’re clear about the principles that guide the business. Having clarity about guiding principles helps organizations attract and retain candidates whose personal values align with the organizational values. These candidates create a powerful competitive advantage for businesses because they’re more likely to be energized and passionate about achieving the organization’s purpose or mission. Misaligned employees will be less creative, committed and productive — and more likely to leave the company.
Incorporating guiding principles into recruitment and retention efforts helps organizations hire, promote and retain values-aligned candidates. Successful organizations incorporate their guiding principles into interviews with prospective candidates and when reviewing employee performance. Organizations can more quickly achieve business objectives when they hire and keep employees committed to embracing the same set of values.
4. Healthier workplace culture
Organizations that recruit and retain based on their guiding principles realize workplace culture benefits too. These strategies attract like-minded employees that, collectively, feel accountable to each other and the business. A shared sense of belonging nurtures a healthy workplace culture. Employees who share and are inspired by the organization’s values are also more passionate, motivated, creative and engaged — all attitudes that contribute to a positive workplace culture.
Workplace culture also improves when workspace and processes are shaped around organizational guiding principles. Workspaces influenced by guiding principles lead to better employee performance that supports the organization’s purpose or mission.
5. Improved bottom line
The business impact of guiding principles goes beyond internal metrics. Consumers are also choosing which brands to purchase from based on whether the company reflects their values. A recent survey from Accenture found that sixty-three percent of consumers “prefer to buy goods and services from companies that stand for a shared purpose that reflects their personal values and beliefs, and are ditching those that don’t.” Consumers are more likely to bring business to companies that stand for something.
Companies can also expect heightened scrutiny from consumers if they tout their guiding principles but then act in opposition to them. Nike, for example, recently launched marketing campaigns promoting its value of diversity. It came under fire, though, when news broke that the workplace culture is toxic, with many reports of sexual harassment and gender discrimination. This may be one reason Nike has failed to meet analysts’ expectations in recent quarters.
The business case for organizational guiding principles is strong. When developed thoughtfully and activated effectively, they drive progress toward fulfilling an organization’s purpose or mission with a more engaged and committed workforce and a more loyal customer base.
About Nicki Gibbs, EVP, Strategy
Nicki is a positively brilliant strategist with a knack for inspiring clients and teams to think and act in powerful ways. Her favorite question is “What if?” Her ability to imagine what’s possible creates contagious enthusiasm that moves businesses forward. Nicki also is a ProSci-certified change management leader with deep experience applying research-based methods to drive measurable business results.