Would you Take a Financial hit to Uphold Your Business Values?
Would you take a financial hit to uphold your business values? It’s a daunting question isn’t it. All businesses would like to answer yes but is that really the case?
It is one thing to create your business values and hang them around your workplace for all your team to see; it is quite another to stand by them and make business decisions to uphold them, even when it may affect your bottom line.
Businesses often bend and shape their values where convenient, especially when considering the bottom line. It is not hard to understand why—businesses need to be profitable; there are employees to pay and shareholders to appease, all while trying to adapt to a changing market and industry.
However, compromising on values, even slightly, can have a significant impact.
When leadership does not stick to values, it leads to decreased trust and morale among the team. A recent study by Leadership IQ found that only 26% of employees believe their CEO holds people accountable to the company's core values, creating a perception of inequality and favouritism.
The same study found that failing to adhere to core values can directly impact a company's financial performance. Disengaged employees often result in lost productivity, which can cost businesses millions annually.
Effective value alignment, on the other hand, can significantly boost employee engagement, leading to increased productivity and profitability. While this has a significant internal impact, not upholding values also has downsides for consumers and the community.
A great example of this was in 2018 when Starbucks had a major racial dispute where two people were ejected from their establishment. This incident caused significant media upheaval and damaged Starbucks' reputation as a welcoming "third place" between work and home, compromising their core values.
Kevin Johnson, the CEO at the time, responded quickly. He visited the store the next day to understand what happened and then shut down thousands of Starbucks stores to undertake racial anti-discrimination training for all staff.
This decision came at a huge financial cost. Imagine how many coffees were not sold by being closed for that day! However, Starbucks stayed true to their values, showing employees that these were non-negotiable and demonstrating to consumers that they stand behind their beliefs and values, even if it means losing money.
How committed are you to living and breathing your company values?
Grow well!
Struggling to stay aligned with your company values? Our team of Growth Advisors work with business owners and leadership teams to help clarify, plan and execute the trajectory towards significant business growth. Get in touch with our team to learn more.