It seems the question isn't, "Do values matter?" It's: "How MUCH do they matter?"

From a marketing perspective, I'd arguing that valuing customers (and employees) matters most. By valuing them, you inherently must behave ethically, fairly, responsibly, and generously.

The minute you start taking people for granted, you begin sliding down a very slippery slope. Which doesn't benefit a company or its customers.

In sum: strong values are often built into strong companies.

FWIW, I'd love to hear some examples to the contrary. Excluding, of course, industries that are purposely built on a lack of values (pornography, gambling, etc).

Lewis, it is great you tackled the "value of values" in your post today. There is a percentage of the customer base that cares about values, and I believe that percentage is growing, however there will always be a significant % of people who don't care as long as they get the best price/performance from their vendor. Sometimes even companies with the worst reputation can pacify customers with "a good deal."

Ryan and Paul,

Great comments offering two excellent points of view.

Ryan, research tells us that values-based companies have a higher percentage of happy and productive employees than do non-values-based businesses. Those are factors that contribute directly to the bottom line and also results in an increased in loyal customers.

Paul, so true. One of the things we know about businesses that sell price is that they are vulnerable to being undercut by another company. The result: shrinking margins and an unreliable customer base. Furthermore, when the competitor vying on price is a Wal-Mart, other businesses selling price are vulnerable to going out of business.

Lewis,

For small business owners like you and me, a value system, honesty and transparency are the only way we would ever operate. Integrity and a good reputation is all. I do believe our clients come to us because they know who we are and what we stand for, and it makes a difference to them, as well as to us. In the end, it does matter when enough of us take a stand and do what is right every day. And a blog like this has value; you never know how many people you are reaching and influencing in a positive manner today, Lewis. . .and I thank you.

I think size of business and location of market also effect how much value affects customer decisions. My city is incredibly conservative and small-town minded, so many business (big and small) do rely on their honest images. The major retail chains certainly present strong competition from local business because they have the ability to offer lower prices thus resulting in the emphasis on trust and supporting local businesses.

Ted,

Thank you! When we are values-based, as many of our readers are, we sometimes make too much of those who seem to operate without values and not enough out of those who work everyday to do the right things. I, for one, need always to be reminded to focus on what is right in the business world and far less on what is wrong.

Sherry,

Excellent point! When faced with lower-priced competition, our best response is to be values-based and to sell value, not price. Trust and credibility go a long way toward longevity when battling against competitor's low prices.

Lewis, you'll be pleased to learn that the Cone Cause Evolution Study 2007 shows increasing support for values:

"Americans’ expectations of companies are at an all time high—83 percent say companies have a responsibility to help support causes, and 92 percent acknowledge they have a more positive image of a company that supports a cause they care about. In many areas, Americans are more likely than ever before to reward companies for their support of social issues. Eighty-seven percent are likely to switch from one brand to another (price and quality being about equal) if the other brand is associated with a good cause, an increase of more than 31 percent (from 66%) since 1993."

What's also important to note is the upcoming influence Millennials will have on the marketplace. The 2006 Cone Millennial Cause Study says:

"Nearly nine out of ten Millennials surveyed, ages 13 – 25, stated that they are likely or very likely to switch from one brand to another (price and quality being equal) if the second brand is associated with a good cause. Moreover, the poll finds that as Millennials begin to enter the workforce, they not only have high expectations for themselves, but also for their employers. Nearly eight out of ten want to work for a company that cares about how it contributes to society, while more than half would refuse to work for an irresponsible corporation."

Two things:

1. I think "values-based" is a hugely overused term and therefore has lost its meaning.

2. Values are subjective. Believe me - I live in the South.

Elaine,

I read that as well. Thanks for sharing with all of us.

Spike,

Values are subjective but the term values-based as used by Jim Collins, whom I regard as the foremost recorder of the effects of values on business, carry a clear meaning. Specifically, a values-based business is one built on a foundation of values wherein if any of those values went away or changed the business would be a different one than intended. Not good for the brand of for business.

Our language is centuries old: Words don't lose meaning as often as some of us claim. I'm still chuckling over those who a year ago said the word conversation had lost meaning. People may misappropriate or misuse words; doesn't mean the words have lost their meaning.

I have no idea what the "stated values" of Starbucks, IBM, HP and Merck are. Given what we know about Vioxx, for example, I'd guess that Merck's "stated values" are at odds with the way I perceive the company. At the same time, lots of people don't follow [business] news and wouldn't know about a company violating its own or its customers' values anyway, making it a moot point.

Do you see any big brands suffering backlash because they are sponsoring the Beijing Olympics? Is Chevron going out of business because environmentally conscious customers are boycotting its service stations in order to save the Amazon rainforest? Are we all walking to protest the outrageous profits and executive payouts at oil companies? I'm not even getting around to fast-food restaurants that contribute to the obesity epidemic. I'm sure I, myself, buy brands without knowing they're two degrees of separation from a huge multinational conglomerate whose values I don't support.

I could go on & on. The short answer is -- I agree with Spike's point #2.

Patricia,

You're political points are well taken but have very little to do with the purpose of creating a values-based business. Stating and living by expressed business values represent the values of the founders are the executives of a company through which business decisions are filtered. Sometimes they are called Guiding Principles.

If you are interested in a business's values and want to make purchasing decisions based on them, as I often do, they usually can be found on a business's web site.

right, but website copy can be a whole lot of lip service (I know; I write it for a living).

To wit, consider this from Merck's website:
"For more than 100 years, Merck has been placing patients first in all that we do...
George W. Merck, our founder's son, believed that placing patients before profits is not only good medicine, but also good business. The values and standards imparted by George W. Merck live on in our company today..."

And contrast with this news coverage: "The Wall Street Journal reported Monday that the e-mails seen by the paper show that Merck executives were worried in the mid-to-late 1990's that Vioxx would show greater heart risk than cheaper painkillers that were harsh on the stomach but were believed to reduce the risk of heart attacks... The paper said that several company officials discussed in e-mails how to design a study that would minimize the finding that Vioxx had a higher heart attack risk than the cheaper drugs, even though some of those writing the e-mails believed that damaging comparisons would be difficult to conceal."

This is always a tricky area. It's always easy to say a company is for certain "values," for who would claim to be against them?

But what does that mean for each individual employee in each individual company in each particular instance?

Even those whose seek the best price...etc. have their own values that may, in fact, be laudable, and I wouldn't be so quick to dismiss them. Thrift, after all, is a value worth emulation.

While reflecting on this, I am reminded of John Maxwell's book, "There's No Such Thing As 'Business' Ethics" in which he postulates two main points:
1. All true ethics can originate out of the golden rule, and
2. Companies that conform to this maxim do better, financially, than those that do not.

Your thoughts?

Cam,

I agree with everything you said, especially the Golden Rule. However, a values-based business is one that uses their stated values as an operations tool. Those values are meant to guide decision making and cultural behavior.

Businesses that are values based are those who filter decisions through their stated values. In addition, they hire and fire based on the stated values so that their culture is aligned with those values.

Stating a posting values or principles do not a values-based company make. Only those businesses who live their values can be seen and measured as a values-based business.

Hope that helps. It is hard to describe a values based business in this space. I dedicate several chapters in Lead With Your Heart to showing by example what a values based business looks like. Other authors focus their every word on defining and describing what those businesses look like.

Lewis,

You just beat me to the punch with the, "Stating and posting values or principles do not a values-based company make."

Some people will saying anything if it provides benefit to them. Standing behind it is a whole other issue.

I don't think values-based is overused. It is just sometimes, maybe many times, used by the wrong people.

To me, honesty and trust are something that should be held sacred. It is part of my company's brand promise and I will damn well back it up. The problem is that because there are so many who use "values" as a 50% off coupon and people have lost trust. If someone has been burned from several claiming to be "values-based," why should they believe anyone else?

The dishonest will always create problems for those who stand by their word.

Troy,

Not much I can add to that, except bravo! You said it well.

Lewis,

Very nice post. It's easy to understand in today's avaricious business climate, how we can become so jaded and pessimistic about what we deem to be disappearing values. It's easy to think businesses erect a facade and do whatever they damned well please. But the truth is, that makes the very real values that many other businesses express and live by all the more compelling and relevant. If business owners like you and me continue to "fight the good fight", we will reap the benefits. We will continue to attract clients who appreciate the fact that we share common values. The cream always rises to the top, doesn't it?

Claire,

I agree whole heartedly with you. Values based businesses will continue to grow. Businesses whose credibility wavers, will also likely grow if they produce great and necessary products and services. But I would argue that their customer base is not nearly as loyal, nor are their employees, as are those who commit to values based businesses who walk the talk.

Lewis,

Given the level of competition out there and the number of companies that provide "great and necessary products and services", I would amend your statement slightly. If businesses lose credibility due to some gaffe they've made, they need to do a few things: own up to what they've done wrong, declare their intention to do better, show renewed commitment to live by their credos, and lastly, remain transparent, if they want to rebound and grow. It can be done and it has been done, but a good reputation once lost is hard to regain.

Sorry to be so late to join the conversation.

I think Ryan got it right, way back there in the first comment. It's not about values mattering, but about how much they matter.
How much will vary by individuals and, to a degree, by demographic/psychographics.

But values matter and we, as individuals and as business people, should always strive to work toward the highest values possible. We all benefit -- in business and in life. It's really pretty simple.

Thanks for the good post.

Was there a time when America was *more* about values? If so, when was that time? I am curious as to what the benchmark is here.

I ask this question because I do see people driving around in Humvees while people are dying for oil and more will do so in the future. I am not just talking about Iraq but also the terrorist machine and odious regimes that everyone knows that oil funds. It may actually end up being our ultimate downfall as a functioning civilization (a nuke detonates in NY or Washington funded by oil money) yet people still buy gas guzzlers.

But haven't people a lot of people just done what feels good here in a America regardless of the consequences to others and their society? Hasn't that been going on for a while now?

Patricia makes a point about Vioxx;
What are the values of the USA that say that Merck should pay compensation to Vioxx victims in the US but not to their customers in other nations?
My 82 year old mother in law had a stroke attributable to Vioxx but is apparently a second class human being according to the values of Merck and the US legal system.

Lewis, Great food for thought. Am responding to Patricia's question "Do we see any big brands suffering backlash...?" Witness last month's outing of WalMart on Anderson 360--that resulted in WalMart changing their unethical (but strictly legal) policy to recoop benes paid to a worker who was injured and permanently disabled on the job. The case was particularly offensive because WalMart was going to leave the worker penniless. Over a million people emailed CNN in outrage and WalMart scrambled to change their policy, and control the PR meltdown, within days. I think people care and people are watching.

David, Thanks for chiming in.

Neil, I don't know the answer to your question. But there was a time when most agreed on certain values and our society reflected those values. They came from the Judaic-Christain perspective and no politicain could be elected who didn't reflect those values.

Janet, good example.

Hi Lewis,

I'm late to the conversation, so it's likely no one but you will notice, but values are a very important issue so here's my 3 cents.

First of all, you seem to denigrate the first two things that customers value, namely:
a) quality of products and services, and
b) fair-priced products and services

This strikes me as fundamentally wrong, and betrays an arrogance that "purity" of values are better than the result for the customer. In my experience, it is not possible to both consistently provide quality and a fair price unless you adhere to values from the top down. In that sense, these two things are proxies that indicate a company, or at least a division or product group in a company has and lives by their values.

Now, I didn't say their values are my values or your values, but they are a set of values that puts the customer first, and for most of us, these proxies are the only way we know for sure that a company cares minimally about making sure the customer is well-served and supported.

On the other hand, values exhibited by supporting the right charity, or by promoting "fair trade" don't necessarily mean much if the company provides poor quality products and services that are over-priced, because if they're doing this, then one must question the organizational integrity and the depth of their values.

In fact, here's a different way of looking at this list. If you go from the top to bottom, these list items are ordered by how evident and measurable they are. Clearly, I can see and feel quality, and based on that quality, and the effort and workmanship and materials, I can judge the price fairness, especially when compared to competition products and services.

It is at least one notch harder to measure the employee benefits and nearly impossible to know whether a company consistency obeys laws and regulations until I see the contrary (i.e the CEO being arrested for fraud).

By the time you get to human rights and manufacturing processes, not to mention support for social issues, it is getting very subjective and hard to measure, and moreover, anybody can contribute to a social cause or put a badge on their website, but how can I possibly know what is in their hearts and minds? I can't, but that is the essense of values.

So, I will trust the proxies I can measure. If a company exhibits all these things, then they're probably a pretty good values-based organization, whether their values are written down or not. But I certainly wouldn't presume to knock a company that is satisfying needs with good quality products for a fair price.

As to the issues at Merck or Walmart, I think it's safe to say that those companies were grounded in the bedrock values of their founders when they began and as they grew, but along the way professional managers took over whose values (and compensation) were based on stock price and profit margins.

In the short term, those things can always be pumped up by cutting corners and ignoring values, but in the long term, ignoring values creates an organizational cancer that will eventually exhibit as a poor quality product (Vioxx) and corporate cover-ups of negative data, or poorly treated and unhappy employees that create surly and uncaring services. Sam Walton would never have tried to bankrupt an employee over such an issue, and probably would have paid the bill out of his own pocket.

So, maybe comp plans are the truest indication of a company's values, because we all know you get what you pay for, but the most obvious metrics we can gather that suggest values-based governance are the products, services and fair pricing.