What are Strategic or Organizational Values?

By Steven M. Worth, President at Plexus Consulting Group, LLC

Strategic values are sometimes defined as the "glue" that holds an organization together. In effect, values act as a sort of constitution that clearly defines what an organization stands for both for those inside as well as outside any given organization.

For example, we all instinctively know what McDonald's Corporation's values are. If we walk into a McDonald's restaurant and see that things are dirty we know immediately that a key value has been violated. Or if we were to order a hamburger and find that it costs $20 we also know something is amiss. In fact it is safe to say that McDonald's employees, shareholders, customers and stakeholders everywhere in the world know that McDonald's values are: cleanliness; affordability; convenience; and family friendliness.

A distinguishing value of Nordstrom's department store is to ensure all customers walking into their stores leave satisfied--even if Nordstrom employees need to refer them to another store for a product that Nordstrom's does not carry. Similarly, a key value around which L.L. Bean built
their success as an outdoor outfitter is that all their customers shall be satisfied with the quality of L.L. Bean's products, or they get their money back. Such values might seem counterintuitive in a business environment. These values cost money! But on the other hand, the confidence they inspire has led to fiercely loyal customers and stakeholders who truly believe in these institutions. Values are not goals but, like goals, they do key off an organization's vision and mission and are in many ways special to that organization.

As can be seen by the McDonald's, Nordstrom's and L.L. Bean's examples values oftentimes serve as an organization's competitive advantage in the marketplace. At the very least, the more successful organizations have a very clearly defined sense of themselves through the values they embrace and incorporate in their day-to-day activities.

So....as planning groups focus on strategic issues, they eventually always need to ask themselves, what does our organization stand for?

What are the values or principles that are or should be incorporated into everything we do? But there is a distinction to be made in all this talk about values. Personal values are often captured in HR policies or documents such as employee manuals. Certainly trust, respect, nondiscrimination (and a long, long list of other values as well) are all part of the personal qualities, ethics and values that make life livable as well as help to make for a pleasant and efficient work environment. But are they strategic? Certainly no organization sees an advantage in fostering distrust, dishonesty, discrimination, etc.

So, if it is a given that all these personal values should be incorporated into every work and personal life environment, then what are the types of organizational values that distinguish one organization from another?

In effect, there are strategic considerations that enter into play that make almost every organization's set of values as unique as a fingerprint. Furthermore these organizational values are not just externally driven; they have internal implications as well, because if they are to be taken seriously then they need to be ingrained into the organization's culture from the time the first employee is hired.

One would hope that parents and schools have done a good job inculcating the personal values that your organization needs and expects of its employees; but your organization's responsibility is to help these same employees understand what makes working at your organization different from working elsewhere. This of course means knowing what these values are in the first place and why they are uniquely important to your organization.