REI’s announcement that it would close and give employees a paid holiday on Black Friday was a dramatic example of why knowing your company’s core values and sticking to them are essential today. President and CEO Jerry Stritzke, who encouraged employees at the outdoor equipment retailer to get outside that day instead, understood that there’s no better way to build a cohesive company than practicing what you preach.
Following are some insights from Scott Ford, CEO of Cornerstone Wealth Management Group and co-author of The sustainable Edge.
As leaders like Stritzke realize, crystalizing your company’s values and making them known publicly will help you attract your ideal employees and customers. It will make it easy for your team to make the right decisions even when you are not there.
However, simply putting your core values into a poster on the wall, as many companies do, won’t work. You’ve got to be willing to act on your core values, even when it will cost you money. Stritzke, for instance, didn’t hesitate to close REI’s doors on what would have been one of the company’s busiest sale days of the year.
So how do you identify your company’s core values? It isn’t an overnight process. Start by writing down what you stand for. It can take time for your list to germinate, so look back it periodically over a three to 12 month period until the list you have rings true. The number of core values you list will be unique to your firm. We have four at Cornerstone. At Zappos, Tony Hsieh has 10.
Your core values will undoubtedly reflect your personal values if you own the company. One of my company’s core values at Cornerstone Wealth Management is “Work hard.” The roots of this value go back to my childhood. My late father was a preacher. He would wake me up every day of the week—including Saturday—at 6am, so I could tackle a project for him. In seventh grade, I shingled the entire roof of his church. Although I hated waking up at 6am, it’s not surprising that I thrive on working hard today—or like to hire other people who do, too.
Another core value I’ve adopted from my father is “Fight for what is right.” As a preacher, he felt he did that through his work every day. I strive to do this at Cornerstone by helping people in a transparent way with their wealth management and fighting against big Wall Street, which is pushing products they don’t need.
When you’ve completed a list of core values you want to embrace, incorporate them into your hiring process. Share them with interviewees and ask them to tell you stories about how they have demonstrated these values in the past. Ask for more than one example. This will help you find new hires who naturally embrace your core values and fit your firm’s culture.
Refer to your core values when you have to make tough decisions, such as firing someone. At my firm, if employees cannot live our core values on a day-to-day basis, I have learned it is best to let them go.
Make no mistake. Embracing your core values isn’t going to be painless. It can lead to added costs and inconveniences at times. But in the long run, it will help you attract and keep more of your ideal employees and customers.
Ritz Carlton Hotels understand this. I stayed at the Ritz-Carlton Toronto years ago to attend a business meeting, I forgot to bring a black belt. When I called the front desk to ask where to buy one, the maître d said, “No problem, Mr. Ford. We’ll take care of it.” His team delivered a black belt to my room before I was ready to go to the meeting.
It would have been easier for the front desk staff to give me the name of a store down the road where I could buy a belt. But that approach, while still helpful, would not have been true to the company’s core value of “Ladies and Gentlemen serving Ladies and Gentlemen.” To truly embrace this value, the company gives employees the discretion to spend up to $2,000 without approval to make a customer happy.
I think of that experience every time I book a hotel. Even though it costs a bit more to stay at the Ritz-Carlton, I stay there when I can as a result. As REI and the Ritz-Carlton both correctly understood, standing for something goes a long way in todays’ business environment.
