Do Organizational Values Matter?

Summary: You know how most companies have those fancy values statements hanging on the wall that nobody really pays attention to? Well, organizational values actually do matter—but only if you use them right. Take Volkswagen's "Diesel Gate" scandal: they had "Ecological Responsibility" as a core value while secretly cheating on emissions tests. The problem isn't that values don't work; it's that most leaders treat them like decorations instead of decision-making tools. When you actually live your values—by talking about them constantly, telling stories that bring them to life, and staying committed even when it's tough—they become powerful guides that prevent scandals, improve team dynamics, and help everyone connect their work to something bigger. The key is moving from having values on paper to actually using them as your organizational compass.

When Organizational Values Fail

It's September 2015, and the Environmental Protection Agency (EPA) has just discovered that many Volkswagen cars being sold in America have been installed with a "defeat device." This was actually software in diesel engines that could detect when an engine was being tested versus actual driving, and change its performance significantly to improve its testing results.

This essentially allowed the engines to reduce emissions during testing but emit 40 times the legal limit of nitrogen oxides during normal driving. The ensuing scandal would later come to be known as the infamous "Diesel Gate." What's ironic is that during this time, one of Volkswagen's organizational values was Ecological Responsibility.

Stories like this really call into question the relevance of organizational values in today's workplace. The idea of values already seems a little "fluffy" to most people—a concept that is aspirational but doesn't really provide any actual value in day-to-day operations. Let's face it, most organizational values remain merely a plaque on a wall or buried in employee handbooks. To top it off, most people probably couldn't tell you what their company values are if they were put on the spot. So this begs the question:

Do organizational values really matter?

I believe the answer is yes, if used in the right way. To uncover what that is, we need to take a closer look at the intended purpose of values.

The Purpose of Organizational Values

The idea of values first came into public awareness through academic work from psychologists like Milton Rokeach. He described values as fundamental, abstract beliefs about ideal modes of conduct and ideal end-states that guide actions and judgments across various situations. However, this concept was really brought to the workplace by Jim Collins and Jerry Porras in their book "Built to Last".

In this book, they introduce the idea of "Core Values" as central guiding principles in successful, long-lasting companies. These principles would serve to guide organizational policy and decisions and would not be compromised for the sake of short-term gain. Their argument was that the most successful and enduring companies had strong organizational values and principles that oriented their behavior.

So at their core, organizational values are meant to act as a compass or filter for decisions. However, as is often the case, leaders don't use them this way. If organizational values mattered to Volkswagen, someone would have spoken up in that boardroom when the idea of having a "defeat device" was proposed. Someone would have asked the question: "How does this fit with our value of ecological responsibility?"

Besides hopefully protecting an organization against major scandal, there are a number of other benefits organizational values have for companies:

• Improving team dynamics by creating an etiquette or standard

• Facilitating change initiatives by helping people buy into a larger vision

• Improving accountability and conflict resolution

• Providing motivation by helping employees connect their work to the big picture

• Creating an attractive brand identity

• Making complex ideas easier to communicate

There are many more I could mention. However, the point is that organizational values have a very real and tangible benefit for companies who use them correctly. So what exactly does that look like? Here are a few practical tips for implementing organizational values.

Three Essential Organizational Principles

1. Communicate Often

I like to tell leaders that people will only remember about half of what you say. That is why it is so important for leaders to adjust their expectations and constantly communicate the things that are most important. As a leader, you will feel like a broken record and may even wonder if you are becoming annoying to your team. I can assure you that is almost never the case.

In connection to organizational values, research shows us that companies experience Vision Drift every 30 days. Vision drift occurs when an organization gradually moves away from its original vision, mission, or core purpose over time. It's essentially a slow erosion of strategic focus that happens without deliberate intention or awareness. This drift doesn't happen overnight. Rather, it's a gradual shift that occurs through small decisions, compromises, and adaptations that seem reasonable in the moment but collectively move the organization off course. This is what probably happened to Volkswagen.

Because this process can happen in as little time as a month, it's important for leaders to constantly remind their team of the larger vision, but also the organizational values that guide that mission and the way a team treats each other. If you want your team to value collaboration, tell them often, and look for opportunities to reward and highlight those behaviors.

2. Become a Great Storyteller

Stories are one of the most underutilized leadership tools. On a neurological level, facts and information only engage a small portion of our brain. Meanwhile, stories activate almost every part of the brain, leading to greater understanding, memory recall, and engagement. So rather than trying to explain the importance of a value, try finding a story that shows the value in action and the benefits people experienced from it. You will find that you have far less explaining to do, and it will be much easier for people to buy into the value.

3. Relentless Commitment

The final and most important tip is that leaders must demonstrate an unwavering commitment to organizational values if they expect their team to follow them. Furthermore, they must be willing to follow those values even if it means sacrificing short-term gain. Sounds simple enough, but if this commitment is not present, then all the other tools and tips do not matter.

While everyone likes the idea of values, as the story with Volkswagen shows us, even people with good intentions struggle with delayed gratification. Thus, there will always be the temptation to make the kind of subtle compromises that lead to vision drift. The long-term consequences are often not evident, which is why buy-in from your team can be challenging. Leaders need to set the standard to aspire to and be ready to hold people accountable who step outside that standard.

It doesn't mean leaders aren't susceptible to losing sight of the vision and values, which is why they will need their peers to hold them accountable. However, that strong base starts with a clear picture of what we as an organization are trying to achieve and a shared set of principles to guide us there that we are all committed to following together.

Making Values Count

When implemented correctly, organizational values become more than words on a wall—they become the foundation for sustainable success and authentic leadership. The difference between companies that thrive with strong values and those that fail lies not in having perfect values, but in living them consistently, especially when it's difficult.

Effective leadership coaching can help you and your organization bridge the gap between stated values and lived values. If you're ready to transform your organizational values from aspirational statements into actionable principles that drive real results, I invite you to book a discovery call with me. Together, we can explore how to make your values work for you, not against you.

Ready to align your leadership with your values? Schedule your complimentary discovery call today and let's discuss how we can bring your organizational values to life.