What are values?

Organizational values define the acceptable standards which govern the behaviour of
individuals within the organization. Without such values, individuals will pursue behaviours
that are in line with their own individual value systems, which may lead to behaviours that
the organization doesn't wish to encourage.

Core values are the organization’s essential and enduring tenets: timeless, guiding principles
requiring no external justification, with intrinsic value to the organization’s members.

Importance of values

Values underpin the culture of an organization, so are critical to an organization achieving its
strategic goals. And the culture has such an impact it can make or break any organization’s
success. Organizations can differentiate themselves from others values in the way they
demonstrate their values.

They are the “SOUL” of the organization.

Southwest Airlines

Southwest Airlines is the textbook example of a company that takes its core values dead
seriously. From day one of operations, co-founder Herb Kelleher let it be known that
Southwest was committed first and foremost to the customer experience. To that end, the
company took great pains to hire only enthusiastic, outgoing and friendly employees who
took pride in their job and bought into the corporate culture Kelleher & Co. had established.

Applicants deemed to be lacking in these traits are reflexively turned away, regardless of
how impressive their résumés might otherwise be. Of the 100,000 applications that
Southwest receive each year, only 2,000-3,000 individuals are hired.

As BusinessWeek explains, Southwest’s corporate culture has been a major driving force

behind its continued success. Southwest was the only airline to remain profitable after the
9/11 terrorist attacks, due in large part to its workforce (and its fuel buying strategies.)
Google

Google co-founders Larry Page and Sergey Brin expressed Google’s core values early on in
the phrase “Don’t Be Evil.” And despite criticism of what some believe to be intrusive
advertising in Gmail and other services, Google has largely kept its word. In addition to
challenging government requests for user data, Google recently made headlines by refusing
to continue censoring its Chinese search results.

Google has also prized raw intelligence throughout its history, preferring to hire PhDs and
academic superstars for positions throughout the organization. Innovation, too, is a long-
standing priority at Google. All programmers, for example, are permitted to use up to 20%
of their work time on projects they believe the company would benefit form. Instead of
merely encouraging innovation, Google took the rare step of making it a mandated part of
every workday.

PayPal

Security has been core value number one at PayPal since its early days, when rampant fraud
threatened to bankrupt the company even as it was turning substantial profits. Today,
PayPal continues to place supreme importance on providing a safe service for its users and
their transactions. Credit card holders, for instance, receive prompt phone calls from PayPal
if their cards are charged an abnormally high number of times (or used at a high number of
places) within a single day.

Those wishing to transfer more than $500 per month from PayPal to outside bank accounts
are subjected to rigorous screening, including mailing photocopies of their driver’s license,
Social Security card and pay stubs to PayPal’s fraud division in Nebraska. These and other
security measures have their origins in PayPal’s beginnings, which remain an ever-present
reminder to prioritize security above all else.

Craigslist

In 2006, ZDNet described how Craigslist CEO Jim Buckmaster, a self-proclaimed “socialist

anarchist and communist” runs his company in the image of his personal values. In many
ways, Craigslist is as anti-corporate as any startup that comes to mind. Speaking about
eBay’s 25% stake in the company, Buckmaster revealed that he only agreed to it on the
condition that eBay had no interest in running the business end of things. He also defended
Craigslist’s long-standing policy of not running text ads on the grounds that “users haven’t
asked for them yet.”

Indeed, Buckmaster went so far as to explicitly declare that Craigslist “is not trying to
maximize revenue.” While many would scoff at the notion of a business not committed to
growth, there is no denying that Craigslist (at Buckmaster’s behest) has in word and deed
embodied the core values set forth at the time of its creation to up to the present day.
Johnson & Johnson

A staple of management and business ethics curriculums, Johnson & Johnson has a long and
proud tradition of adhering to its core values. As the brands website states: “We believe our
first responsibility is to the doctors, nurses and patients, to mothers and fathers and all
others who use our products and services.”

It was an unprecedented act of loyalty to core values when Johnson & Johnson ordered a
massive, $100 million recall of Tylenol following reports of cyanide poisonings in 1982.
While it would arguably have been easier (and cheaper) to deal with lawsuits from the
poisoning deaths on a case-by-case basis, Johnson & Johnson wasted no time pulling its top-
selling product off of store shelves across the country – even though the contaminations
were later found to have occurred only in Chicago.

Volvo

Most car companies are known for something specific – luxury (Mercedes), speed (Ferrari),
or reliability (Honda), to name just a few. But throughout its history, Volvo has subjugated
each of these things to its primary core value of safety. While Volvo has admittedly not
always produced the flashiest vehicles, they have consistently come out on top in safety
tests and rankings for decades – which is reflected in the notoriously low cost of insuring a
Volvo.
The company’s engineers obsess endlessly about how to reduce the impact of collisions,
make brakes more responsive and in innumerable other ways ensure that drivers are
protected from threats on the road. And despite Volvo’s recent emphasis on producing
better-looking vehicles, safety is and has always been their first priority.

Walmart

Since Sam Walton founded the company in 1962, Walmart has been driven by one core
value: everyday low prices. As the eye-opening book The Wal-Mart Effect explains, Walmart
has managed to offer a breathtaking variety of products and services for sale at historically
low prices through a number of methods, including innovative inventory technology and
outsourced labor. And despite frequent criticism from journalists, academics and politicians,
Walmart’s low prices appear to be a net benefit to the overall economy.

A 2005 Washington Post article, for instance, cites New York University’s Jason Furman, who
calls Walmart a “progressive success story” due to the fact that its low prices “on food alone
boosts the welfare of American shoppers by at least $50 billion a year.” While other retailers
have strayed from the low-price path, Walmart has remained true to its core values and
continues to turn substantial profits, even during the current recession.