fundamental and deeply held that they will change seldom, if ever. To identify the core values of your own organiza- tion, push with relentless honesty to define what values are truly central. If you articulate more than five or six, chances are that you are confusing core values (which do not change) with operating prac- tices, business strategies, or cultural norms (which should be open to change). Remember, the values must stand the test of time. After you’ve drafted a preliminary list of the core values, ask about each one, If the circumstances changed and penalized us for holding this core value, would we still keep it? If you can’t honestly answer yes, then the value is not core and should be dropped from consideration. A high-technology company wondered whether it should put quality on its list of core values. The CEO asked, “Suppose in ten years quality doesn’t make a hoot of difference in our markets. Suppose the only thing that matters is sheer speed and horsepower but not quality. Would we still want to put quality on our list of core values?” The mem- bers of the management team looked around at one another and finally said no. Quality stayed in the strategy of the company, and quality-improvement programs remained in place as a mechanism for stimulating progress; but quality did not make the list of core values. The same group of executives then wrestled with leading-edge innovation as a core value. The CEO asked, “Would we keep innovation on the list as a core value, no matter how the world around us changed?” This time, the management team gave a resounding yes. The managers’ outlook might be summarized as, “We always want to do leading- edge innovation. That’s who we are. It’s really im- portant to us and always will be. No matter what. And if our current markets don’t value it, we will find markets that do.” Leading-edge innovation went on the list and will stay there. A company should not change its core values in response to market changes; rather, it should change markets, if necessary, to remain true to its core values. Who should be involved in articulating the core values varies with the size, age, and geographic dis- persion of the company, but in many situations we have recommended what we call a Mars Group . It works like this: Imagine that you’ve been asked to re-create the very best attributes of your organiza- tion on another planet but you have seats on the rocket ship for only five to seven people. Whom should you send? Most likely, you’ll choose the people who have a gut-level understanding of your core values, the highest level of credibility with their peers, and the highest levels of competence.
Articulating a Vision
Core Ideology
M M Core purpose
Envisioned Future
M
M Vivid description
customer service programs became stylish. For Bill Hewlett and David Packard, respect for the individ- ual was first and foremost a deep personal value; they didn’t get it from a book or hear it from a man- agement guru. And Ralph S. Larsen, CEO of John- son & Johnson, puts it this way: “The core values embodied in our credo might be a competitive advantage, but that is not why we have them. We have them because they define for us what we stand for, and we would hold them even if they became a competitive dis advantage in certain situations.” The point is that a great company decides for itself what values it holds to be core, largely inde- pendent of the current environment, competitive requirements, or management fads. Clearly, then, there is no universally right set of core values. A company need not have as its core value cus- tomer service (Sony doesn’t) or respect for the indi- vidual (Disney doesn’t) or quality (Wal-Mart Stores doesn’t) or market focus (HP doesn’t) or teamwork (Nordstrom doesn’t). A company might have oper- ating practices and business strategies around those qualities without having them at the essence of its being. Furthermore, great companies need not have likable or humanistic core values, although many do. The key is not what core values an organization has but that it has core values at all. Companies tend to have only a few core values, usually between three and five. In fact, we found that none of the visionary companies we studied in our book had more than five: most had only three or four. (See the insert “Core Values Are a Company’s Essential Tenets.”) And, indeed, we should expect that. Only a few values can be truly core –that is, so
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HARVARD BUSINESS REVIEW September-October 1996
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