Values-based leadership refers to the idea that company leaders must draw upon their own values, including their organization’s, for motivation and direction. At its core, a values-based leadership asserts that people should be motivated by their values and work together towards identifying values for the entire organization, then use them as motivation to lead the company towards their desired vision.
Leaders should lean on the organization’s values to drive performance, especially in times of change. The organization’s values must serve as the bedrock of why the company exists, how leaders make decisions, and the organization’s real purpose. But for these values to resonate with the team, they must be authentic and relatively specific.
Here are some ways value-based leadership is changing companies.
1. Companies Becoming More Diverse with Strong Diversity Policies
Diversity is more than just a policy or program. Companies adopting strong diversity policies are more likely to drive innovative results. Yet several companies still struggle with diversity and inclusion, often failing to attract diverse talents because of inclusivity issues in the workplace.
If you’re looking to shape your diversity and inclusion programs and policies, keep in mind that the change can be challenging, albeit rewarding. Companies are now looking to value-based recruitment experts such as Lightning Travel Recruitment who help luxury travel and lifestyle companies recruit diverse candidates for luxury lifestyle jobs, leading to better candidate satisfaction and retention.
The reason why most companies enact change is to deliver business value. Research shows that companies with a more diverse team outperform those with a homogenous workforce. Even the mere presence of physical diversity can lead to better performance.
It’s also a fact that companies that lack diversity are often being called out publicly and could lose business, not to mention falling behind with recruiting the right talents.
2018 research done by McKinsey shows that having greater diversity in the workplace has led to greater value creation and profitability. The same applies at the executive level, where studies found a statistically significant correlation between better financial performance and diverse leadership.
While financial performance is a significant driver for Diversity Policies, some companies launch diversity initiatives for government compliance regulations and address shareholders’ pressures.
Hiring the right talents is also one of the main reasons companies adopt diversity. During interviews, more and more candidates are asking about diversity and inclusion. That’s because people are aware that companies with a diverse workforce are generally more inclusive when it comes to each employee’s individual perspectives and characteristics.
When employees feel valued and accepted, they are happy and will choose to stay longer, leading to lower turnover rates.
2. Recruitment Leads to Better Candidate Retention when Based on Values
More and more companies are applying values-based recruitment. It means prioritizing the potential candidates’ values over skills and experiences during recruitment and hiring people whose values match the organization’s values. Studies show that values-based recruitment can result in better candidate retention.
Because of this, some companies in the North of England, such as Manchester are employing HR staff to devise principles and values and create effective values-based recruitment strategies. This is starting to trickle down throughout the rest of the UK.
When it comes to values-based recruitment, employers must be clear of their core company values and make sure that they are embedded in everything they do as a company. For instance, you may pride yourself on being an organization that always goes above and beyond.
Or perhaps, you value honesty and open communication, which drives how your organization functions. Your core values will guide you in choosing people who are values fit for your company, and this is how values-based recruitment works.
You can assess a candidate’s values by asking questions that will require them to explore how they will respond in different situations instead of focusing on previous qualifications and experiences.
For instance, you can ask interviewees to share a particular situation where they must make their own decisions. Their answers should give you an idea of their values and whether they are a perfect fit for the company.
3. Environmental Impact
From high-tech corporations to financial companies, more and more companies are reaping the plentiful financial rewards of taking their company in an eco-friendly direction. Having eco values means going carbon neutral and planting trees, which can positively impact the environment.
When going eco-friendly, companies can benefit from government subsidies and tax breaks, not to mention the savings that come with going green. So, whether you are offering financial or technology services, or running a small restaurant or dry-cleaning business, going eco-friendly is cost-effective for your business.
With people becoming more aware of environmental issues, many customers are now choosing natural and eco-friendly products. More importantly, many of them are willing to pay the premium price for these products. Thus, several companies have been forced to implement sustainability and green practices in their products, services, and overall operations.
While every company has a different level of impact on the planet, as a whole, everyone contributes to pollution, waste crisis, and climate change. Every company’s journey to becoming environment-friendly is unique, but it’s more important than ever to start now and get it right.
Remember, everyone has a part to play, regardless of the size of your company. By taking account of your carbon footprints and taking the necessary steps to minimize them, you are doing your share in reversing the effects of climate change.
4. Happy Employee
When employees agree with the company’s values, they are happier at work. Numerous studies show that happy employees are way more productive than unhappy ones. Happier employees are more engaged and can perform better with less absenteeism from work.
Happy employees are less stressed. As you know, stress can result in several physiological and emotional problems, which can lead to a higher rate of absenteeism. If employees are less stressed, a healthy work environment will be developed.
A healthy work environment is when employees agree with company values. It is the kind of environment that fosters a positive work culture, encourages friendships among employees, and improves personal wellbeing.
When it comes to creating a happy and healthy work environment, leaders should lead by example. Managers who take joy in their jobs and encourage staff to enjoy their work more inspire confidence, dedication, and loyalty. By setting a positive example, leaders will play a critical role in fostering a positive work environment leading to the company’s overall success.
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