Recognise This! – A values-based company culture requires far more than hanging a plaque on a wall.

Do CEOs – other than Tony Hsieh of Zappos, of course – actually think about the company’s culture and core values to the extent of using the values as means to hire, fire, promote and reward employees?

Yes, they do. Christine Fruechte, president and chief executive of Colle + McVoy, was recently featured discussing just that in the New York Times “Corner Office” column. Ms. Fruechte draws three clear lessons we should all learn when considering core values for our own organisations.

Are your values realistic?

“[To develop our core values] there was a core group of about 12 individuals, but we vetted the ideas with the people who would be living them every day as well. It’s not just about the words, but it’s also about defining what the words mean, because if you say ‘creativity’ or if you say ‘collaboration,’ you can define them a lot of different ways.”

Your core values are useless unless every employee understands what they mean. But it’s not enough to be able to define what the word “creativity” means. Your employees must know what creativity looks like in their daily work. The best way to make that clear is through strategic recognition in which employees are explicitly (and frequently in a timely way) recognised for demonstrating a value, along with a detailed message explaining precisely how they did so.

Are your values universal to all?

“‘Creative’ is not a department at our agency. We expect it from everyone within the organisation.… We’re all defined by really trying to create standout ideas. And we also expect insightful thinking. And that means always having a point of view. I don’t care if you’re the receptionist, or if you are a new copywriter, you have to have a point of view about anything.

Not only should your values be clearly understood by everyone, they should be applicable to everyone as well. Of course, some companies have “risk taking” as a core value, which is important indeed in R&D departments – but perhaps not as much in Accounting. There is always a balance, but if your core values aren’t broadly applicable to all employees, how can they be core to your organisation?

Do you (and all employees) truly live by your values?

“An effective culture is grounded in having a collective purpose. And a culture also is deeply rooted in core values.… You have to live by the core values, and reinforce them constantly. We remind people what the core values are anytime we have agency meetings, and they’re built into our performance reviews. If you’re not living by the core values of the organisation, you’re not going to be allowed to advance.

“One [value] is integrity. I have a very short fuse for anyone who is not going to operate with high integrity. …  And yes, I have terminated people very, very quickly, and it’s a very easy decision to make for me because I’m not willing to compromise when it comes to that.”

You cannot claim to live by your values as an organisation if you are unwilling to hire, fire, evaluate performance, and promote based on your values. It’s far too easy, for example, to sweep bullying behaviour by high-performers under the rug. But if such behaviour violates your values for “integrity” and “respect,” then you must be willing to take appropriate action, even by removing the person from your organisation. Otherwise, you clearly communicate to employees the opposite of what you intend – that, in fact, integrity and respect are not important as important to you as results.

Does your organisation have realistic, universal values that all employees live by and are held accountable to?