03.
Operating Values vs Core Values

Behaviors, Not Words

Core values are verbs or nouns you claim are adjectives, that describe your behavior. They're worth having, worth publishing on your website, and worth instilling in your people. They're good but operating values are more useful.

"No volume of words will offset your actions."

— Simple_Complexity by William Donaldson

Life would be easier if we could measure behaviors, not words. Doing so would reveal our actual values, how we act when things go wrong, how we act when things go our way. Daily decisions reveal our operating values, and if we don't like the optics we should change to leave a better taste in mouths. Introspection is an asset, but when we dwell only in the theoretical — the core values — we obsess over appearance and neglect what we embody in the everyday. What use is a compass if we always prefer to avoid true north because we just feel like we know a shortcut?

"Managers often try to shape or limit the feedback the employees see. This is usually a futile effort since participants in the system often see, or sense, the real feedback. Additionally, systems often hide critical feedback with delays, which mask real results and consequences."

— Simple_Complexity by William Donaldson

Core values are philosophical ideals; operating values define what we stand for when things do not go to plan. Experience teaches you that being useful is preferable to being perfect. Operating values determine everything from hiring (and firing) to saying no to revenue that does not add value. Behaviors compound over time to shape the culture (good or ugly) of your firm. We plan for success by facing reality and setting deliberate standards for our behavior up-front.