Misa Myong, outdoor survivalist, aspiring DJ, french fry foodie.
Technology and start-ups are at the forefront of redefining workplace environments and culture. As other industries attempt to emulate these innovative workplaces, there’s been increasing emphasis on values. Corporate values, whether understated or not, play a critical role on an organization’s culture and strategy.
Values form a foundation that create a workspace to cultivate a shared goal and understanding throughout the company. These values inherently influence behavior and decision-making amongst individuals. Great Places to Work identified 1,000 firms that reveal a strong correlation between financial performance and employees’ belief on their company’s values. Companies with employees that best understand where the organization is headed, how it’s going to get there and know that everyone’s in it together are those that are most profitable.
How corporate values impact profitability:
Companies who adopt strong corporate values have higher returns.
Value-driven companies deliver shareholder returns five percent higher on average than their valueless peers. Further, according to Harvard Business Review, these companies observe revenue growth by fourfold compared to firms with disengaged employees.
In Corporate Culture and Performance, Harvard Business School professors John P. Kotter and James L. Keskett’s study indicate that shared organizational values and performance are highly correlated. Over an eleven-year period, the study collected data on over 200 blue-chip companies in 22 different industries. Companies that valued all stakeholders grew four times faster, had job creation rates seven times higher, had stock prices that grew twelve times faster, and a profit performance ratio 750 times higher than value-less companies.
Corporate values decrease organizational costs.
Organizations who incorporate strong values are 67 percent less likely to experience corporate misconduct incidences, while companies with weak or no organizational values experience ten times more incidences.
Corporate values reinforce job performance.
According to the Association for Talend Development, For every ten percent increase in employee commitment, there is a six percent increase in effort that results in a two percent performance increase. Additionally, a ten percent increase in employee commitment results in a nine percent decrease in probability that an employee leaves4. Value-driven companies observe 54 percent higher employee retention and 89 percent better customer satisfaction.
Harvard Business Review states that only 23% of employees within the United States truly “believe in” their organization’s values and strongly feel their implications on a daily basis. By tapping into this unleashed potential, your organization will gain a competitive edge that will set your performance and profitability ahead of your competitors.