Rachel Ruttan, an assistant professor of organizational behaviour at the Rotman School of Management, has seen companies commit this faux pas time and time again: when their stated company values don’t match up to reality.

“It’s a classic case of keeping up with the Joneses,” Ruttan says. “Companies see their peers claiming how much they care about their employees, sustainability or innovation, and they think: ‘We should definitely say that.’”

But adopting new company values isn’t as easy as copying and pasting a message from your competitors. “It's easy to latch on to these socially desirable values that are popular among other companies,” Ruttan says. “But the reality is that maybe you're not there yet. Or maybe those values aren’t true to you.”

The risks of adopting inauthentic company values

If there’s a gap between the values that your company states and how it actually practices them, there can be consequences. “People are hypersensitive to hypocrisy,” Ruttan says. “The minute that you’re not living up to the values you're claiming, it really engenders negative moral evaluations.” Her research shows that if your company doesn’t walk the talk, you’ll be perceived as inauthentic and hypocritical — not only to your own employees but also to your customers, peers and competitors. In fact, Ruttan says it’s better not to have any company values listed at all than to showcase values that are inauthentic.

What’s more, a disconnect between a company’s stated versus lived values can result in employee attrition. “There is a bottom-line component in that it’s costly to lose talent,” she says. And, in this age of social media, jaded ex-employees are free to spread the word, making it more difficult to recruit talent.      

Bring your employees and customers into the conversation

Regardless of whether you’re a company leader looking to create new values or you’re re-evaluating existing ones, Ruttan suggests engaging your employees as a first step. Whether that’s through anonymous surveys, focus groups or casual conversations, she suggests asking questions, such as:

— What do you think is unique about working here?
— If you had to describe to somebody what it's like to have a job here, what would you say?
— What do you think might be surprising to people outside the company about what it's like to work here?

Platforms like Glassdoor are also a great resource to see what resonates among current and former employees. And don’t forget to poll your customers, clients or partners in this research stage too. “Collect as much data as possible,” Ruttan suggests. “See what sorts of themes emerge.”

Be specific, honest and a little funky (if it suits you)

Broader is not better when it comes to company values. “People don’t like broad, aspirational value statements like ‘We want to become more diverse,’” Ruttan’s research shows. “Be very specific and concrete in what you're saying.”

For example, instead of, “We value the environment,” Ruttan recommends, “We’ve reduced our emissions by X per cent over the last five years. This underscores our commitment to it.”

Ditch, "We put customers first," in favour of, "We actively seek customer feedback and use it to continuously improve our products and services, ensuring a satisfaction rate of 95 per cent or higher."

Instead of, "We care about people,” consider, "We prioritize the well-being of our employees by providing comprehensive health benefits, mental health support and fostering a culture of work-life balance by allowing remote work and personal days."

"We energize others," could be, "We cultivate a positive and motivating work environment by recognizing and rewarding team contributions and encouraging innovative ideas through quarterly innovation challenges."

And finally, rather than the generic “We help teams succeed,” Ruttan suggests, "We support team success by providing clear objectives, necessary resources and continuous mentorship, ensuring all teams meet or exceed their goals with a X per cent specific project completion rate on time and within budget."

If you have an aspirational value that your company hasn’t quite reached but is committed to achieving, Ruttan says to be honest and reflective, which shows integrity. For example, if your team isn’t as diverse as you’d like, but you say concretely how you plan to achieve that, it can still be effective. For example: “We want to achieve gender parity in our C-suite within three years, and to do that we’re offering mentorship programs and are reviewing our hiring practices.” Ruttan adds: “Make the pathway really clear from desiring these values to how you’re actually going to do it.”

Lastly, if your company operates untraditionally, use it to your advantage. “From an authenticity perspective, you get an extra boost for stating something that might not be as unambiguously positive,” Ruttan explains. “For example, ‘We’re a little bit funky’, or ‘We do things a little bit strangely around here’ are the sorts of things that are unique to you and can actually be a benefit.”

One final note: Ruttan reminds leaders that values shouldn’t be set in stone. “They can evolve as a company grows and changes, and it's okay to regularly revisit and reflect on these with your team.”