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Building A Values Driven Company

August 10, 20239 min read

"We're not serving any damn chicken salad!"

Herb Kelleher, the founder and long-time CEO of Southwest Airlines, was trying to make a point.

As described in the book, “Made To Stick,” Kelleher once told a new member of his team:

"The secret to running this airline is simple: We are THE low-cost airline. Once you understand that, you can make any decision about this company that I can.”

“For example,” he continued, “if Tracy from marketing comes into your office and says that her survey data indicates that the passengers might enjoy a light entree on [a flight]. We offer peanuts, and she thinks a nice chicken Caesar salad would be popular. What do you say?”

The person hesitated, so Kelleher responded: "You say, 'Tracy, will adding that chicken Caesar salad make us THE low-fare airline? Because if it doesn't help us become the unchallenged low-fare airline, we're not serving any damn chicken salad!"

I love this story and often reference it as a great example of how a values-driven leader and company work.

This approach, what the organization now calls "The Southwest Way," has helped the airline outperform not only every other company in its industry but nearly every other company in the world over the last few decades.

It can be similarly impactful to you and your organization.

What Is A "Values-Driven" Company?

Southwest is not the only company that takes its values seriously, just one of the most well-known.

Values-driven decision-making is a characteristic of many of the most successful organizations in the world — from Patagonia to the Navy SEALs to the global hedge fund Bridgewater.

A Values-Driven Company ("VDC") consistently and predictably makes decisions that align with a small set of values and guiding principles that are most important to the organization's long-term success.

In a world of opportunity and uncertainty, VDCs create a unique advantage: speed. 

They can make choices (on people, operations, strategy) with greater clarity and confidence than those companies prefer circumstantial evidence, or gut instinct, to guide their decision-making.

To be clear, decisions made by VDCs aren't always successful or right (who knows how much money Southwest left on the table because they wouldn't offer chicken salads?). 

That said, they rarely experience the second-guessing, regret, and anxiety that plague less well-aligned organizations.

As a leader, the more clarity you have about the values and behaviors most important to your success and that of your team/organization, the more likely you will be able to navigate these conditions of uncertainty and get where you want to go.

What Is A "Value"?

Your values act as a compass in a world full of uncertainty.

My favorite definition is the most straightforward: A "value" is something you value.

"Core" values are the small (3-5) subset of values you prioritize above all others.

Practically speaking, our core values are made manifest through our behavior.

As the CEO of Netflix, Reed Hastings puts it: "[At Netflix] our values are shown by who gets rewarded, promoted and let go."

In many ways, when describing a value, you describe a "recipe" — a combination of expected behaviors resulting in the feeling we associate with each value.

Take "trust," for example.

Do you value trust? (Of course, you do.)

But what, specifically, does that word (trust) mean to you? What has to happen for you to trust someone else or feel trusted by them?

Perhaps, at work, you trust a team member who quickly admits mistakes ("I know I can trust her to admit when she's wrong").

Or maybe, you only trust those on your team who never make mistakes ("He's an expert on this stuff, I trust he'll make the right decision").

While there's no right or wrong answer, if you aspire to create a Values-Driven Company, then you must know what your company's core values are and what they mean in practice.

Why "Values-Driven" Matters

Every organization has values, but very few are "driven" by them; very few have defined and clarified their values at a level where they can effectively inform decision-making.

Used well, your values are your "safety net," preventing leaders at all levels from making choices that threaten the business' long-term success.

A great example of a values-driven company: Netflix.

For each of their nine core values, the leadership team has explicitly articulated what each means regarding employee behavior, performance, and attitude.

For example, here's how Netflix defines "Curiosity": 

"You learn rapidly and eagerly."

"You seek to understand our strategy, market, customers, and suppliers."

"You are broadly knowledgeable about business, technology, and entertainment."

"You contribute effectively outside of your specialty."

These are not "nice-to-have" characteristics. At Netflix, it's clear: hiring and promotion decisions hinge on one's ability to exhibit these behaviors.

With some notable exceptions (e.g., Wikipedia), companies that link their values and behavior outperform their less disciplined peers over time.

In my experience, a lack of clear and compelling values also takes an emotional toll on leaders. 

Regret, second-guessing, and other forms of anxiety are common in businesses that lack value clarity. Have you ever felt "stuck" or "paralyzed" by a tough decision? If so, you know the feeling that these executives experience regularly.

Values Are Personal

In "Good To Great," author Jim Collins writes that company core values "require no external justification; they have intrinsic value and importance to those inside the organization."

In other words, values are personal.

Values require no justification because they form through experience.

I value courage because, in my experience, when I am "courageous," good things happen.

On the other hand, my friend values "security" more than courage because he is responsible for a large (and growing) family.

When it comes to values, there is no "right" or "wrong" there is only true. Values are a choice, but we value what we believe (based on experience) is in our best interest.

Too often, leaders make the mistake of trying to pull values from a long list of nice-sounding words (integrity, trust, honor, etc.), failing to recognize that if they don't personally value these things, they will struggle to act accordingly.

Therefore, if you hope to create and lead a values-driven organization, you must first identify your core values and go from there.


To make this as easy as possible, we have created a simple assessment to help you and every team member identify the values that are showing up most in your life today. 

It also allows you to identify gaps between what you 'say' you value and how you behave.

Click here to take the Sands Values Assessment [Free]!

From Personal Values To A Values-Driven Company

Once you've taken the assessment and identified the core values of everyone on the team, you're ready to begin creating a compelling set of company values.

The process: find the overlap. 

What principles and behaviors are most commonly valued by your leadership team? What are the most consistent themes or trends?

For most teams, 6-8 common values or themes will emerge after the initial sorting process.

I like to use the following list of questions, also by Jim Collins, to help you narrow the list down to items that are "core":

  • If you were to start a new organization, would you build it around this core value regardless of the industry?

  • Would you want your organization to continue to stand for this core value    00 years into the future, no matter what changes occur in the outside world?

  • Would you want your organization to hold this core value, even if, at some point, it became a competitive disadvantage—even if, in some instances, the environment penalized the organization for living this core value?

  • Do you believe those who do not share this core value—those who breach it consistently—do not belong in your organization?

  • Would you continue to hold this core value even if it cost you?

  • Would you change jobs before giving up this core value?

  • Suppose you awoke tomorrow with more than enough money to retire comfortably for the rest of your life. Would you continue to apply this core value to your productive activities?

Your company's core values are those to which most of your leadership team can answer "yes" to all the questions above.

Of course, there will be instances where your "core" value won't be as important to others in the organization. That's OK (and is to be expected).

The good news is that you can better anticipate and manage any tension from this value misalignment.

Work Made Easier, Life Made Better

Discovering, sharing, and discussing values is one of the most important steps to building a more engaged, high-performing team.

Absent a values-based decision-making framework, the options, strategies, and choices you face as a leader every day threaten to overwhelm both you and your team.

Without values, it's hard to say "Heck yeah!" to a great idea and just as hard to say "hell no!" to a bad one.

  • The secret to high performance: alignment

  • The secret to long-term success: values-based decision-making.

Values-driven companies don't always "win" in their industry or market (there will always be some circumstances or factors outside our control). Still, they do give themselves the best chance to win.

As with Southwest Airlines, among others, values enable leaders to more easily identify the trade-offs in any given decision and move forward confidently and clearly.

Furthermore, in my experience, knowing your values makes life easier.

Our values act as an intelligent filter — allowing us to differentiate between a variety of compelling personal and professional options to find the path forward that is best for us.

In my early twenties, a mentor told me that values "are our only safety net." 

No doubt about it. 

What I didn't fully appreciate then, but do now, is that our values are not just a source of security; they are also a catalyst — a wellspring of energy, engagement, and enthusiasm that can change the world.

This article will guide you to discover your core values, make better decisions and turn your team, company, or family into a values-driven organization.

Would You Like Our Help With This?

A Team Values Workshop is great for an executive retreat, strategic planning off-site, and/or other team-building events. 

Click here to email Ben to discuss creating a workshop for your team.

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Ben Sands is an executive coach and founder of Sands Leadership.

Ben Sands is the perfect mix of coach and consultant and he has been coaching me to higher levels of clarity and meaning for almost 10 years! In leadership and life, we all have a lot of big decisions to make and Ben has taught me is how to make those big decisions confidently, and in a values-aligned way. His coaching is an investment that has paid off exponentially.

Alex Budak

Professional Faculty,

UC Berkeley Haas School of Business & Author,

Becoming A Changemaker