• Business planning and strategy
  • Entrepreneurship

How to Establish Company Values

Guest Blogger | March 10, 2015

Written By: Tim Rudkins, Small Business Coach & Solopreneur

They talk a good game but large businesses rarely have a vision and they certainly don’t have any values.  In most cases their vision statement and any values they mention are simply marketing blather for their customers or employees. Making profits is often their vision and if history is any indication then that is also what they value. For publicly held companies they are legally bound to act in the fiduciary interests of their shareholders. That’s fancy talk for making them money. If you need a good example there is none better than Anita Roddick and The Body Shop, one of the original “ethical consumer” workplaces. The Body Shop was ultimately sold to L’Oréal and from then on, any pretense of caring about the environment was dropped. Perhaps not in the marketing but in practice as L’Oréal now had to respond to shareholder demands.

How does a small business create and stick to its vision and values? Remain small! As you grow, the demands to bow at the altar of money become greater with every new employee. People need to be paid, assets need to be bought, the machine needs to be fed and the only thing that will do that is increasing revenue and fewer morals on how to achieve that revenue.

Other ways to adhere to a vision and have company values are to write them down and put them where you see them each and every day. If you have a retail business, put them on the wall for customers to see. They will be the first people to tell you that your values are starting to slip!  If you want a company where people are treated like humans than get out there and talk to your staff and do just that. Which reminds me of a visit I once made to Krug furniture in Kitchener in the 1980’s when I was in the middle of business school.

In those days, the chic thing for any business to do was “leverage” which meant taking out a bunch of loans to expand and then using the revenues to pay off the loans. The idea was that your revenue growth percentage would always be more than the interest rate on your loans. Krug furniture was a family owned business (funded in the 1880’s) that prided itself on quality furniture and employees being involved in the process. The last name of the boss was Krug and when someone asked him why his firm was not taking out loans to expand the business, he mentioned that he worried about his employees and the issues that the loans might cause. Then someone quickly informed him about leveraging and how that wasn’t a problem if they sold more. The owner paused for a moment and then replied – “Perhaps, but what happens if we don’t make those sales or if the interest rate rises. What becomes of the company and the employees?”

In other words, the values of the company also involved keeping the workers happy and employed. No one with the last name “Krug” wanted to be the person who let the company fail. Leveraging might make the owners more money but the risk was failure and job losses. That risk was too great to take. As we walked around the factory a bit more you could see these values everywhere. Most people were paid a piece rate which allowed them to take their breaks when they wanted to and work hard when they had to. When the boss came by they all called each other by their first name, usually exchanged a funny remark and at no point did I notice your standard, large company attitude of obedience. These people were all in it together.

I just checked out the Krug website and what they are up to today. A lot of it concerns environmental stewardship and while I haven’t visited it since the 1980’s I wouldn’t be surprised that the employees still call the boss by his/her first name. Those are values that any company can be proud of.

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