How to define the Enterprise Value
Highlighting the values of your company has become something very classic. We find them on most websites and especially in the career area.
However, we are forced to note that it is often the same ones that come back: “Human,” Benevolence, Team spirit, and Collaborative. By force, these portmanteau words lose meaning, since indeed, what company would say that it is not "human"?
If you are one of those who have established values in their business, then let's do a little test:
- Can you tell us, head-on and without cheating, what are these values?
- Can you argue why you chose them and not others?
- How do you make them live on a daily basis?
- How do they materialize in concrete terms?
If you are having difficulty answering these questions, then this article may interest you.
The values of a company forge its identity.
The company's values bring together all the principles (moral, societal, ethical, and marketing) that guide the operation of the company as well as the behavior of each of the men and women who make it up on a daily basis. Values are much more than words; they are key axes to follow in order to give internal and external consistency to your brand. These are real benchmarks on which companies rely to evolve and take right strategic directions. Values guide the company like the rails of a locomotive. Contrary to what one might think, they are not frozen in time and can evolve over the years according to the changes, of course, decided by the company to adapt to its market.
Family of values
Did you know that there are eight major families of values? While the precise identification of corporate values proves to be a powerful guarantee of success, it is not an easy task to do. While some entities advocate authenticity, others affirm that innovation is one of their founding values. So no need to copy onto anyone, together we will clarify your values in this article. For Thierry Wellhoff, author of the book “Values,” they have both an identity dimension and a marketing and communication dimension.
According to him, we can classify all the values in 8 large families:
- Competence (customer satisfaction, know-how, team spirit, service, excellence, quality)
- Conquest (innovation, performance, success, ambition, etc.)
- Conduct (responsibility, tradition, staff involvement, passion, etc.)
- Societal (sustainability, environment, health, social responsibility, etc.)
- Relational (respect, trust)
- Moral (integrity, loyalty)
- Development (humanism, well-being, personal development)
- Social (equality, equity, improvement of the quality of life, etc.)
We will distinguish values according to the environment in which they are expressed. Certain values will support the company's posture on its market (External) and then build its brand territory; others will further illustrate its corporate culture (Internal) and then define the actions and behaviors expected in a company.
Company values to serve its brand territory
Do you know one of the great secrets of the leaders of men and the leaders of this World? They are all driven by the strength of their "Why." Simon Sinek, a famous British speaker, states, "People don't buy what you do; people buy why you do it." In that sentence, he perfectly sums up the idea that people don't buy what you do, but what you do. They subconsciously buy the values of your brand and not the technical characteristics or even a price. Today, at an equivalent price and product, your customer chooses you because he adheres to your values first and then to your product second. Let's take an example: why do you choose Apple rather than Samsung when the two giants manufacture products with almost identical technical characteristics? Because you adhere to the values of one or the other, even if you feel like you are making a personal and thoughtful choice. This notion may seem abstract, but it is perfectly real.
Company values to serve its culture
Suppose we take up the idea that a company's values contribute to defining the actions and behaviors expected in a company. They can become a very effective growth accelerator in a context of creation or transformation by replacing the business processes, companies, for example, or by naturally creating behavioral charters. Do you know the common point between the three companies? On their website, a section called “our DNA,” “our values,” or “our know-how” is dedicated to highlighting their corporate values. It is often the manager of the company who holds the pen to share his vision of the company by taking care to explain what differentiates it from its competitors. We can find words like “quality,” “know-how,” or even “responsibility,” which reflect the soul of the company and its brand positioning. Imagine a company specializing in the field of tourism, hotels, or restaurants. It will easily evoke values relating to customer satisfaction. Those specializing in new technologies will more easily advocate innovation or even quality.
How to define the values of your company
We share with you three essential questions to ask yourself to identify your values:
- As a person, what principles do you advocate? Your business necessarily reflects the way you operate, your beliefs, etc. They must be in line with you.
- As a business leader, what are your priorities? Here, you have to think about your goals and the means you are going to deploy to achieve them.
- What image do you want to convey to your employees, your customers, and more broadly to the entire market? By answering this question, you will be able to express your values in terms of management and communication.
Be careful not to fall into the trap of perfectionism when defining your values. Remember that your values may change over the years. You can choose five founding values beyond that can be confusing, and it is not always easy to retain them over the long term for you and your employees.
How to bring values to life in your company?
Identifying the values of your business is a great start. But keep in mind that these values are not only words that “resonate,” but it is also necessary to put them into practice and make them live on a daily basis. When we note a discrepancy between the stated values of a company and the reality of its functioning, the consequences of this double talk prove to be disastrous for a company: loss of credibility with customers, the declining motivation of employees, etc. is the entire culture of the company which must embody its values to translate them into observable and measurable behaviors. Corporate values define the personality and corporate culture; they ensure cohesion at two levels; those of internal teams and branding externally.
- Internally: we repeat it often; your employees are the first ambassadors of your brand. Your team must bring your company's values to life. To achieve this, it is important to define them well and, above all, to communicate them regularly. For example, you can display them in a corridor or recall them when a new recruit is made.
- Externally: your achievements, your actions, and your overall communication must promote the values of your brand identity in your market. As we have seen, defining the company's values makes it possible to give meaning to your actions, both for those involved in the company and for your prospects and customers. In a context where everything is evolving at high speed, it will be important for your employees to adopt a line of conduct shared by all employees. On the other hand, your values take on all their importance in the context of recruitments. Attracting talents who share similar values will have a positive impact on your business.
Just as a company's values are an important management lever, they are also a formidable guide for structuring your communication. By clearly revealing the DNA of your business, you will be able to reach prospects who share the same vision as you. Finally, taking the time to define your values clearly also means taking care of your brand image. If you can be consistent between what you say and what you do, your reputation will only improve.
The 5 conditions to perfectly define the values of a company:
- Co-created values: Born from the founders' conviction, the values are the product of a collective approach that allows teams to appropriate them quickly.
- Embodied values: They must find a concrete application in tools and processes and thus help the teams in their daily work.
- Formalized values: The definition of values involves communication teams more than HR because their assimilation by employees depends on impactful formalization and effective dissemination.
- Values for all: Everyone must be able to find resonance in the company's values, whatever their profession or profile.
- Living values: The values are lasting because they correspond to the company's DNA, but they evolve to support its development
We have just defined together with the values of a company by recalling the interest of the vision and the corporate mission. Let's move on to the second part of this article, corporate values as a lever for growth in the context of digital transformation.
Company values as a growth accelerator
Today, achieving a successful digital transformation is the new priority of our economy. While some companies are still in an experimental mode, their commitment to digital transformation is increasingly remarkable. If you would like to know where SMEs and mid-cap companies stand in their digital transformation, we invite you to consult this detailed article on the subject. But reinventing yourself in a digital market has consequences for the company on several levels. Your values can play a major role in the success of your new model, whether it modifies your value chain directly or indirectly.
In terms of recruitment:
- The values make it possible to check the candidate's compatibility with the corporate culture and the type of clients with which they work
- They also serve to differentiate yourself enough to attract candidates who already live the same values as those present in your company.
At the level of company framing:
- It is a tool to motivate internally so that employees know precisely why they carry out such a mission. They make it possible to give meaning to actions,
- They are a way of retaining current customers who adhere to the values of your company; a link is woven over the years.
At the decision-making level:
- These are pillars to ensure the alignment of actions with the corporate vision. You know why you are making, or you should not make this decision. It is a way of checking if your actions are still by the stated values.
The digital transformation has impacted at several levels of the company. It obviously modifies the technological aspect by orienting the company towards new tools, but it can also modify the commercial objectives, the business processes, the governance, or the management methods. It will intervene more broadly throughout the company; the technology was chosen to carry the innovation underlying its transformation, the necessarily growing place of the customer within the company, and the organization of the data to win in performance.
How to ensure the consistency of your values in this new digital world?
Strategic coherence is above all human coherence. As we have seen, the successful reinvention of companies around digital goes above all through a new organization and new governance of its human resources, from General Management to employees. It is, therefore, easy to understand that all your employees must carry your company's values. It is they who will make them live or, on the contrary, will abandon them. Therefore, your employees must understand what common sense of their action is (the “why” of the company). For this, you have an important role to play as a business leader. You must encourage and involve your teams around these values, especially when they are shaken up by a digital transformation process.
Cultivate your employer brand and make it shine in your communication. Your company's values are the keystone of your identity because they characterize your differentiating factors in your market. By cultivating your employer brand, you will be able to recruit the skills essential for successful digitalization. Promoting your employer brand will go through well-established communication. It is essential to structure your corporate communication to gain readability and consistency properly. A good match between the DNA of the company and the values of a candidate is synonymous with successful recruitment. Large brands like Sephora have understood this well and do not hesitate to communicate on their corporate promise to recruit the right people.
How to formulate and demonstrate the values of your company?
“Even if they sound like a boat, you have to show that they are unique to you. "
Once determined, the second exercise consists of finding the formulation of these values that best suits your digital communication. By adapting to your digital communication, you ensure consistency by keeping its state of mind (rather extravagant and offbeat or rather classic).
Here are some of our recommendations:
· Make them memorable: Easy-to-remember values don't have to be single or single-word keywords. A value can also be a sentence containing a few words. Know that the formulation of value is done both in its name as in the text that composes it. Thus, a value presented by rather simple, one-word naming can be memorable by defining or presenting it. Example: a small video around this word presents it.
· Avoid long lists of values: Because no one will remember them. From an outside point of view, we will get the impression that you have tried to list all the values that came to you in brainstorming. If you can't "sort" the potential values, remember that the potential values are abstract notions with fuzzy boundaries. So you can advertise three values, presented more as categories, which will indirectly contain the other values in their definition and explanation.
· To demonstrate them is to support them with concrete: whether your value is very classical or original in the choice of its words, it is always more relevant accompanied by concrete to illustrate it. The value “At the service of people” can have a very different definition from one company to another. For a company, this can be initiated to guarantee the good work / personal life balance of its employees. It may be actions in charitable associations. Thus, we suggest that you list the existing evidence that can support each value.
How to maintain them on a daily basis?
Communicating your values is good, applying them is better! Your values should not be reduced to a list displayed in the break room. This is why we advise you to bring them to life on a daily basis. How? 'Or' What?
Applying those starts with the candidate experience: is your value "availability"? So it goes without saying that you will be responsive to the applications you receive. Does your value happen to be "transparency"? Your candidates will, therefore, expect to obtain constructive and transparent feedback following their interviews.
To gain height on the consistency between your values conveyed and your employees' experience and candidates, you can, for example, carry out an audit. The audit is resulting in an action plan applicable to the happiness of all. The opportunity is to work on your internal and external employer brand and pamper your current and future employees.
Author: Vicki Lezama