The notion of values being core to business success is not restricted to the profit-for-purpose sector, impact investing or philanthropic work.
Brand strategy approaches like Simon Senik’s Why, the Business Model Canvas, or the currently fashionable disrupt to succeed approach are all based on identifying the value that you offer to your customer and placing that value at the core of your business. All refer to Apple as a leading example of this thinking.
Even traditional sales and branding approaches, though, depended on the identification of your Unique Value Proposition (UVP)
We do not have to assert any new world view to assign an important role to your values as a business owner or director of an organization.
The importance of value to a brand is that it overcomes price, convenience and other considerations that undermine profit. If we appeal to the values that we have in common with our customers they will reward us with their dollars.
Values, then are the core of a brand and the basis of your message, raison d’etre and brand.
But wait, there’s more.
At the heart of the logic about brand value is the recognition that our values tie us together. It is our values that make us feel to be part of something.
In his best-selling book Good Profit, Charles G Koch – yes he is one of those Koch brothers – writes “What I consider to be good profit comes from creating superior value for our customers while consuming fewer resources and acting lawfully and with integrity. Good profit comes from making a contribution in society.”
We can complement our drive for profit, then, with a drive for values. In fact, we can release our profit to harness our values to create that network of stakeholders with common values that in turn will future proof our business by creating a community of values that supports our business.
It seems like heresy to put something other than profit at the heart of our business strategy.
After all, business cannot survive without profit. If you are running an organization that is not balancing its books, that is losing money, then you will have to close the doors and you will lose everything you have built.
Profit is absolutely essential to success in business.
The key, though, is that profit is necessary, but it is not sufficient.
I can make a profit by bullying people to give me money, I can make a profit by stealing, I can make a profit by selling the river running through my city, the clouds above or the trees in the local park, but none of these business models are sustainable. Eventually, the stakeholders whose resources I am appropriating will find some-way to stop me from profiting from taking their stuff.
It is only when we contribute value to our stakeholders that they support us.
By overtly declaring that value, and working with our stakeholders to build and protect that value we can future proof our businesses.
The advantage that nearly all small business has over its larger competitors is that it is already part of a community. The fact that you work in an area where your customers know you is your secret weapon, a starting point that cannot be replicated by the world’s biggest corporations, by global trade agreements or by unsympathetic governments.
You can release your profits to invest in nurturing secret advantages like that and build the stakeholder community that will future proof your business, simply by identifying the values that you have in common.
Values and identity politics.
There is one potential danger in the focus on values and building communities with like values and that is the sense of tribal belonging that it creates.
It is this tribal urge at the heart of values that has made religion and other belief systems such a powerful tool in imperial conquest. You do not need such a huge army to force distant populations to pay taxes if they believe in the values that you offer them.
I am an unlikely person to be quoting Charles G Koch, because the values that drive the Koch brothers enormous coal business, their funding of climate denial media and the support of conservative politicians and their politics of fear are the same values that he considers to be the basis of Good Profit. I have been selective in my use of his quotes to show that the application of values to business is not a partisan view. He is selective of the philosophers that he quotes in his identification that Economic Freedom is the most important freedom of all and the moral duty of government.
We promote our values, then, at the risk of fanning the flames of tribalism. Identifying our values identifies groups of people who will support us come hell or high water. If we work together to support each other, we weave a community that is self-reinforcing and resists outside attempts to break it up.
The relationship between values and the circular economy is that those communities will then find ways to close the loop, keep value in the community and reduce the wastage of energy, resources and value from the community. But that is the topic of the next article.
Read earlier articles in this series