You Need a Foundation of Values to Drive Growth
Entrepreneurship is more of an art than a science. Every business, and business owner, is different. But… that doesn’t mean there aren’t some universal truths that can help you steer towards long term success.
As an example, customers must be willing to pay for your product or service (not just like it, not follow you online, not think it’s cool or interesting, but pay hard cold cash…!).
Another one? – Your business model has to make sense and generate at least 10% profit with a good opportunity for more than that. Anything less than that is a dice roll away from going under.
There are more, but the one that jumped out at me the other day is the idea that you need to actively use a set of solid core values if you want to scale your business for the long run.
This came up when I was talking with a local business owner who is having their best year ever, despite the pandemic and all of the other 2020 challenges. Now part of that success is due to the industry they’re in and some market things that are going on. But there’s a bigger story with this business. The owner took over the business 6 (or maybe 7 years ago) and worked very hard to focus effort and build a great team. And since that time, over at least the last 5 years, every year has been substantially better than the last – continuing even into this year… which is very impressive.
And this owner will tell you that the best thing he’s done is to focus on creating and communicating a set of Core Values that permeate everything he and his team do.
What can Core Values do for a business?
Historically a lot of business owners looked at Core Values as kind of a touchy-feely, nice to have idea that sounds good, but isn’t really all that important. But that’s a big mistake – especially if you’re looking to grow over time.
Core Values – if they’re done right – aren’t just a set of catchy ideas that you can put on your wall or website – they do at least 3 key things for your team:
- They are a decision making engine.
What if your employees run into a situation that doesn’t have a quick and easy answer? A customer complaint, a co-worker who drops the ball, an unexpected hitch in the plans for the week. Core Values can help those employees determine the right course of action… without having to escalate to their boss or the owner. They know what’s expected because the Core Values are clear and they talk about them all the time.
2. They enable your company’s culture to scale as you hire.
Culture is all about having a common language and behaviors that reinforce what you believe. Core Values that are consistently communicated and used will drive your culture – even as you add more employees. The employees don’t need to have personal interaction with the owner or the senior leadership group – they can get most of that from the values.
3. They make hiring much easier.
As any business owner will tell you, it’s hard to hire the right people, but it gets a lot easier when you have a clear blueprint for the kind of person you’re trying to hire, that they believe what you believe. And as an added bonus, Core Values, when visibly used, will attract people who already buy into those ideas – making it much easier to recruit and hire.
There are lots of ways to incorporate Core Values
A lot of companies will go through a formal process to choose (or uncover) their core values and end up with a polished list of words that will end up on their website or on their wall. That can work – although it’s often more effective to be less polished and use short phrases that really reflect the personality of your team. Rather than saying you believe in Integrity, maybe find a way to explain what that means to you (in 10 words or less). The more colorful or tangible, the better.
As an example, Danny Meyer discovered the power of Core Values when he opened up his 2nd restaurant in New York City. In case you’re not familiar with him, he’s the founder of Union Square Cafe and 23 other successful restaurant concepts in New York – including Shake Shack, which is now found in lots of places.
But the real test for Meyer came after he had great success with his first restaurant and decided to open a 2nd one. He had the formula down for the look and feel of the restaurant, the menu, the food, the pricing… but he quickly realized that without physically being present at the new restaurant all the time, the experience wasn’t the same. And with 2 restaurants to manage, he couldn’t be in both places at once.
His answer? He started training his team on his critical beliefs (core values) and he summarized them in short phrases, or maxims, so that they would be easy to remember and to use. Things like:
- “Loving problems”
- “Finding the Yes”
- “Put us out of business with your generosity”
- “To get a hug you have to give a hug”
These may sound corny or hokey, but the reality is that they’re the kind of ideas that are critical to how he runs his restaurant and as his team became comfortable with the ideas, these phrases became part of how they talked to each other (and to their customers). It became part of their daily culture… and allowed Meyer to expand and maintain the quality and experience he is famous for.
The local business I mentioned earlier doesn’t have catchy phrases (candidly their values are pretty dry and corporate), but what they do have is an overwhelming commitment and buy-in to talk about their values, make management decisions based on those values and review performance every week based on those values.
And you can’t argue with the success that they’ve had (5+ years of substantial growth with a lot more in front of them).
What about your business? Are you talking about your core beliefs, your values every week? Are you using them to drive decisions and actions? Do you use them for hiring? If not, it may be time to start giving that a try.
Let us know your thoughts, we’d love to hear from you.
Shawn Kinkade Kansas City Business Coach