336: How to Define Your Company Values
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In today’s episode of The Startup Chat, Steli and Hiten talk about how to define your company values as a startup.
All companies have core values. They are the rules of for how your startup is going to achieve your mission and vision. A startup’s core values set expectations for the company and tells your employees how to behave appropriately in every situation.
Tune in to this week’s episode to hear Steli and Hiten thoughts on what core values mean, the importance of having them, how to define your core values and much more.
Time Stamped Show Notes:
00:00 About today’s topic.
00:43 Why this topic was chosen.
01:53 Why it’s important to define what your company’s values are.
02:43 How to define your company values.
03:00 Why you should hire people that value the same things as you.
03:32 What happens when you hire people with different values.
04:15 Why self-awareness is important.
05:30 Why your core values need to be defined.
05:39 How to approach this the very first time.
08:50 The most important value at Close.
3 Key Points:
- If you’re a founder or a CEO of a company, there are values that exist.
- The values of an organization are the beliefs employees have about work and in working at the company for the customer that you’re working for.
- Your behavior is communicating to everybody what you value.
Steli Efti: Hey everybody, this is Steli Efti.
Hiten Shah: And this is Hiten Shah.
Steli Efti: And in today’s episode of The Startup Chat, we’re going to talk about how to define your company values as a start up and we’re going to do that in a very short period of time, because one of the core values of this podcast is that we don’t like wasting time, right?
Hiten Shah: Yeah, brevity . I like that.
Steli Efti: So we’ve been emailed a few times this week from different people on this specific topic, the one on like, “How do I write down the values? How do I define them? How do I communicate them? How do we do this in the best way possible?” So we thought it would be fun to quickly chat about this and give people a little bit of guidance.
Hiten Shah: Absolutely. This one’s a really important one and I’m going to start by saying a problem that happens is when you don’t define your values. If you’re a founder, CEO, or even a manager of a company, or you started it and you have more than you involved, even if it’s just a co-founder, there are values that exist already. Even as an individual, values exist, but in an organization, the values are essentially the beliefs that people have about work and working at the company, for the customer that you’re working for. What I see commonly is this one thing that really resonates with me and I bug people about when I hear it, “These people on my team are not doing what would do. These people on my team are not doing the right thing.” Well, have you defined what the right thing is? “No, but they should know.” What do mean they should know? How are they going to be in your head and know what you should do? Basically, most of the time, 99% of the time, those people have not defined values and essentially made the company understand them, had people involved in the creation of those values, and those values permeate once they’re created. That’s all it takes, but if they don’t exist, then they’re all implicit, they’re all sitting there in everyone’s heads and people probably don’t have the exact words to think about them. I’ll say one more thing before … I’m sure you’ve got a lot of thoughts on this, is you know the values are working when people are repeating them inside the company.
Steli Efti: I love it. Yes. See one of the reasons why … I think the question that was sent to us was phrased in, “How do we create our company values?” And the reason why I didn’t use the word “create” when I introduced the topic, but I used “defining it,” is because you have company values if you’ve defined them or not. If you spelled them out or not. Your behavior is communicating to everybody what you value and if you are the founder or if you are the co-founders, then people will orient and try to observe what is truly valued in this team, in this company, and that’s how they’re going to try to make their decisions. If you now hire people that value personally completely different things than you valued as a team, one of the big reasons why you would ever hire somebody like that is that you’re lacking the team or organizational self-awareness to know what your values are so that when you interview a candidate that has conflicting values, you would not even bother hiring this person because you know this person is going to be unhappy here, we’re going to be unhappy with this person. So I think that self-awareness is really the key and foundational step to being able to define your values and I think that people are uncomfortable with that level of self-awareness and self-reflection and that we all have problems with being self-accepting with the reality of who we are, or who we are as a team and what we truly value. So it’s a topic that a lot of times is uncomfortable for people to look at, because it’s a very introspective topic. But doesn’t matter if you want to avoid it or not, your company core values and if they are fuzzy and if they’re not well-defined, if they’re not agreed on, it will lead to problems, it will only lead to misalignments and you will not know why because you’ve never really designed those values and defined them. So let’s talk about defining them. So let’s say I hear this and I go, “Shit, we don’t have our core values written down anywhere, or defined anywhere, as a team we’re five, six, seven people, we’re small team.” How do I do this? Do I just write down the things I’d like us to do? Or do I sit down and have everybody suggest what our values are and we vote on them? How do I create the version one of this? How do I approach this the very first time around?
Hiten Shah: Yeah, there’s so many ways to approach this. I literally will like to get either … And even remote companies do this, but on a retreat or something, or in an office if everyone’s in an office. I like to get everyone in front of white board and literally just jam through it and do an exercise of what do we believe as a company? What do our customers need to believe? What embodies our business? Some of the times, it’s just about stories, sometimes. If you get stuck, all you have to do is tell stories about how you interacted with each other as a company during hardship, or during some traumatic moment or what people’s expectations are. So to me, it’s like this meandering conversation at first where it’s like, “What do we believe?” And coming up with stories of how the company behaves. Whether it’s with a customer, with each other internally, with investors, whatever it may be and that can start making people really have strong opinions about what they believe. Because what you’re looking for is not what you believe as a founder. It’s what you collectively are creating as a company in terms of the ethos and value system, the way other people are going to feel about you and the company, and that’s really important. So I think values being defined based on behaviors and interactions is really the key because otherwise they’re disingenuous and they’re just made up. So I don’t like looking at other company’s values.
Steli Efti: I fully agree. I also don’t think that … Values is not a wishlist, it’s not like, “I’d like to be really much taller, I’d like to be blonde. I’d like to be really rich, I’d like to be an athlete and …” it’s not a wishlist of everything you think would be cool if your company would have these attributes, or your teams, it is quite literally asking the question, what do we value? Usually the implied question is what do we value over other things? So what is the most important for thing for us? Or what is more important to us than something else? So as an example, I think for a long time, people would compare back in the day, Google and Facebook’s engineering cultures and one valued speed over quality, over making mistakes and over being buggy at time and the other culture valued quality over speed. I think it’s … In most company values around the world, what you see is you see a compony that writes down, “The most important for us is speed.” Or, “Speed over everything.” Then the next little value is, “Always highest quality standards,” or something. It’s like these two things don’t go really well together. If you want to be always the fastest but never make any mistake, that will paralyze everybody, because they can’t follow both of these things. You have to value one thing over the other thing. We really value speed that means that sometimes we’ll take a hit on quality and we believe that through speed of iteration, improvement will get to even better excellence in quality eventually, but we’re okay with failing or breaking things on the way there. Or, quality’s the most important thing and we’re totally okay being a little slower than others because our stuff will always be hyper-polished and perfect, but you can’t just want everything. “We want to be the fastest, the biggest, the most nimble … ” You can’t want everything and I think the important thing is really to ask what do we value most and do we have examples how we make a decision as a team in terms of how to treat a customer? Or how we prioritize what we build and how we build things? Where are the examples in terms of our behaviors and our decision making when it was a tough spot? When we had to decide between one death or the other, or one negative versus the other? How did we choose and why? I think that that’s a good line of questioning to really figure out what do you value as a company and as a team and are there stories and are there examples that demonstrate that you’re living those values? That those values are not a wishlist of what you wish you be’ed like, but are a reflection of the reality of what you’re living today and how you are making decision today in the company. As I said before, if your values are really well-defined, and if you have great alignment with the company on values, then people know how to make decisions when they have to choose between speed and quality, if it’s clearly defined. They know how to make their choices and so everybody in the company knows how to make choices, because they’re all aligned on and in agreement and in awareness of what the company values are and how we make decisions in this company and what we value in this company more than other things, because you can’t value everything, because then you value nothing.
Hiten Shah: I love that, I think that’s really key. It’s not aspirational stuff. This is stuff that’s like, at your best, the company operates like this. I think it’s that simple and really figuring out what that looks like. I got to say one thing, this thing is actually about people and there’s a quick story here from me. We were doing values at KISSmetrics when we were about 12 or 13 people, probably like a year too late or a little bit longer, but that’s fine. We were in a room, we were 95% done, the values were there but then somebody had a problem with one specific value and it was a couple of somebodies but it was really one person who was really vocal about it. So then what we had to do is, we literally created a culture committee, we had three people on it and none of the founders. We told them to really spend the time to talk to people and figure out how to get the values so that everyone’s happy with those values. So sometimes, values can get really touchy, especially because these are words that you’re going to put in places. These are sometimes posters you’re going to put on the wall if you have an office. Or these the things you might put on your website. So I just want to be clear that it’s not about everyone agreeing in the moment on the first shot. This is very personal to people because this is also about their personal values and they want to work in a company that actually they believe has values like they do. That’s super important and there’s no 100% of my values, even as a founder, are not going to be the same as the company values 100%. It’s a collective thing, it’s something that’s about a organization and how it treats customers, how it treats partners, how it treats investors, how people treat each other inside a company, it’s all of that. So I can’t stress the point that if there’s disagreement, find a solution, but sometimes you might need to go to something more extreme like that, in case there’s some things you just can’t get past then you make it more of a democratic thing. Only if you have to. It is honestly a democratic thing, based on the people that are in the company right now, doesn’t matter who they are.
Steli Efti: I love that. The last thing I’ll say to wrap up the episode in terms of tips, again this goes with almost everything that we say, don’t overthink this, don’t try to be perfect in version one. Think of this as versions, the company might grow just as you are growing as a human being and the values that you had when you were 12, or 16, or 20 years old might not be the same that you have in your 40s, or 50s, or 60s. Some might, some might have changed. The same things happens as a company grows, so think of this as a living, breathing thing and if you don’t have any company values written down, just set up a meeting, sit down with the team, do a version one. If you can’t write it or say it as perfectly … If some things don’t feel like perfect, that’s fine. Just say, “Hey, this is going to be version one.” We still have a few values that we have written down and for years we’re looking at it and we know this is close to capturing what we really mean but we still don’t feel it’s set in the perfect way and we’re still tinkering around the wording around some of these things. Then, some values we realized … Because we do a value meeting, session with the entire company, every six months at every team retreat and sometimes we realize we’ve outgrown this value, this needs to die, or we need to completely change how we think about this. Don’t try to be perfect, don’t try to spend a week or a month on something like this. Have one meeting, have a version one and then maybe frequently, once a month, once a quarter, once a year, whatever it is, sit down and just look at it again, talk about it and reword, change, adopt and create new versions of this. But if you try for perfection, it’s going to be way too hard, and it’s impossible to do anyway. So just start small.
Hiten Shah: Start small, just like everything else.
Steli Efti: All right, that’s it from us for this episode.
Hiten Shah: Bye.