Establishing your Core Values/ Shared Principles ⦨ Fostering Unity: Defining and Embedding Core Values in Your Startup ⦨ Midstage Institute

Establishing your Core Values/ Shared Principles

Have you found yourself disagreeing with your co-founders about what is proper behavior in your startup company? Or how to manage employees?

This is probably a sign that you need to think through your core values and shared principles.

Core Values

Core values and shared principles seem like a very touchy-feely thing to focus on in a startup. It doesn’t seem like a hard management tool. But I find it is one of the most important foundations to keep people accountable.

To what works in your startup, especially before the processes and the learning and all the rules are in place. That our startup typically doesn’t have. And does not want to have to start with.

Collecting Stories about the Core Values

The core values are a very important component of your company’s culture. And not just core values as they are written on paper. But core values as they are “lived” by your people.

That’s why it’s important to find the values you agree on as co-founders. Make these part of the culture. And then start collecting lots of stories about these core values and shared principles. How have they made your startup different from other startups or other companies out there.

Here’s the tool we’ve developed for this purpose.

Establishing your Core Values/Shared Principles

The first is to work on an individual basis. Identify exemplary employees in your company. If your company is still very small, you can also think of people you’ve worked with in a previous life. Or in a former job. But if the company has already grown, you probably have a few exemplary employees. Everyone can individually list them in the left column.

The second question for each of these employees is: what makes them so exemplary? What is the right thing that they do that makes you feel like they truly fit in the startup that you want to create? List those behaviors. Ideally in a one word phrase, for example, Johnny is a very trusting person or Beth is very diligent.

Duct Method

Now, bring all your results together. Typically you do that on a big flip chart using sticky notes. The important thing is not just to say what was mentioned most. But also to understand what kind of a value this is. And for this we use the DUCT method, the DUCT method that I have derived from Patrick Lencioni’s “The Advantage”.

Patrick Lencioni differentiates between four different kinds of values.

  1. The desired values are the ones you would like to have but they are mostly inexistent.

  2. The undesirable values are those that you once had, but they are no longer useful.

  3. The core values are the ones that do exist. They make this organization and its DNA truly special.

  4. Table Stakes values, those are values like professionalism or integrity that you really you cannot imagine a company not having. The ones that are normal in every organization.

So classify the group’s values according to this DUCT method. Are they desired? Undesirable? Core? Or Table stakes? Then only take in the next step, the Core values that come out of that.

The top three to five C values, the ones you have classified as Core. You put these in the last column. Now it is time to start testing whether these values are really, truly yours for your company. So find examples, find stories that you can relate to each other and maybe even to other employees.

  1. Where have you upheld these core values, even if it was financially painful or it calls a certain last year business results.

  2. Where have you chosen to only hire people that exhibited this core value that had this in their DNA?

  3. Or have you ever parted ways with an employee or a partner or even an investor because they did not exhibit that same core value that you folks as a founding team found that important?

Values You Don't Compromise

And this is the key criterion we ultimately want to use for core values and shared principles. It is those values that you find so important that you’d rather incur a loss. Or lose an important employee or a partner. Rather than compromise on these core values. That is the kind of principles we are looking for.

I hope that this tool, our Core Values/Shared Principles tool can help you get to a good conclusion. And share that with all your employees.

Establishing Your Core Values/ Shared Principles

The “Establishing your Core Values/ Shared Principles” tool is available for download below: