If you’re a regular listener of MakingChips podcast, you’ll know, we often talk about the core values of a manufacturing company as a major component of successful company culture.
But how much does it really matter that you define and document your company values? If you do, will it really make a difference in your bottom line?
The answer depends on who you ask.
To the skeptics, written core values may seem like smoke and mirrors spun from the marketing department as a promotional tactic. But ask past MakingChips guests, manufacturing leaders from companies like Tuthill, Zengers, Carr Machine & Tool, Okuma, AME + Hennig if their core values impact the bottom line and they’ll tell you it’s vital to their culture.
Core values naysayers have two reasons to be critical:
- They haven't defined their company values, or
- They have failed to activate them.
What does it mean to activate? Here’s an example we should all understand.
Say you installed machine monitoring technology on the machine tools in your shop. That’s a great step toward gathering the current state of your production efficiency, but collecting data will not improve your throughput. You have to analyze what the data is telling you and act on that information if you want to see an increase in productivity or efficiency. In the same way, defining your core values doesn’t drive your company culture forward. You must activate your core values and put action behind them if you want to see change.
Make core values part of the conversation
Before you can activate core values you have to define them and declare them to everyone in your organization. So how do you do that?
Think about what makes your company special and you’re bound to think about your people and the values they exhibit when they serve your company and your customers.
For example, if Liz has a radiant personality that makes everyone smile and enjoys working with your team, maybe “happiness is contagious” is one of the values you want to promote across your organization.
Once you’ve defined what is important and valuable, use the words as much as possible in your day-to-day conversation. Make them stick. I use the MakingChips core values so often that it’s comical to the team. While it may be funny how I weave them into conversation, the team knows how serious I am about how we must live our values to achieve our vision for the future.
Use core values to set the standard of your culture
On the MakingChips podcast we talk a lot about Entrepreneurial Operating System (EOS), and the book, Traction: Get a Grip on Your Business, which ties core values into a tool called the “People Analyzer”. The People Analyzer lists out the core values of the organization on one axis and lists team members on the other. Then there is a ranking for each team member: a plus (+), a plus-minus (+/-) or a minus (-) for each value and person.
A typical application of the People Analyzer would look like this:
Core Value: Happiness is contagious.
Employee Liz always demonstrates this value (+), sometimes demonstrates this value (+/-) or rarely demonstrates this value (-).
What it means to set the standard of your culture is that you need to decide, in a concrete way, what it would look like for employees to meet, exceed, or fall short of your expectations of living out the values of the organization. Using a tool such as the People Analyzer will help you assign specific actions and put into words what it means to live out your core values and this will allow you to set the standard.
Make your core values tangible and use them in employee reviews
When you list your core values there’s usually some wordsmithing and clever creativity involved in order to come up with values that are unique and differentiated from something common or cliché such as “We provide quality service”. However, what happens is these words and phrases can be a little too too ‘head in the clouds’ or vague for your employees to understand if there are no concrete definitions attached to them. For example, MakingChips uses “being content cultured” as one of our core values, and we put some context to it to make it a little more tangible and provide clarity. [see the chart below]
By breaking down the specific components of what it means to be “Content Cultured” in the employee reviews and providing a rating, it gives meaning and direction and helps employees understand how they are or are not meeting the expectations we have regarding company values.
Use your core values to reinforce behaviors and coach for continuous improvement
One thing we have done at Hennig and AME is create a graphic which not only defines our core values but provides application and definition for each. We made magnets with the graphic to be used for both positive reinforcement, and as a tool to help with continuous improvement (which is a nice way of saying we can use the magnet when we need to get on someone’s case for not living up to our values).
For example, if we saw employee Liz do the right thing in a hard situation, demonstrating our core value of “Unyielding Integrity”, we could go up to her and give her this magnet as a reward for recognition, similar to how a college football team gives out stickers on helmets for touchdowns or sacks.
On the other side of the coin, we can also give the magnet to someone who is not living up to the value as a means of providing coaching and correction. For example, if employee Liz decided not to show up for a training session, we could go up to her and explain that she was not living up to our core value of “Pursue Excellence”. Using the details on the graphic, we could leave the magnet with Liz for her to think more about how to live up to our expectations.
The main point is, if you attach your core values to tangible, measurable things and coach employees well, your values will become activated and you employees will begin to live by them.
We would love to hear from you!
Speaking of positive reinforcement and coaching for continuous improvement, we would love to hear your feedback on this article. Please share any thoughts you have in the comments below, including the core values of your manufacturing company any anything you’ve done to “activate” them.