How to Define Core Values That Actually Matter
Most companies have core values.
Very few have values that matter.
The difference shows up when pressure arrives. A bad quarter. A difficult client. A top performer who cuts corners. A strategic decision where two good options conflict.
If your values don't help you make that decision, they're decoration.
This article will show you how to define core values that actually govern behavior, guide decisions, and shape culture. Not the values you wish you had. The values you'll defend when it costs you something.
If you want to skip the manual work, I built the Core Value Forge™—a tool that walks you and your team through this process and generates your core values in under an hour. But whether you use the tool or do it manually, the principles here are what make values real.
The Problem: Most Values Are Fake
Walk through ten company websites. You'll see the same words repeated:
Excellence. Innovation. Service. Teamwork. Customer-First. Respect.
These aren't values. They're permission-to-play. Every serious company should have them. Listing them tells us nothing about how you actually operate or what makes you different.
The test is simple: could your competitor post the same value on their wall and have it be equally true?
If yes, it's not a core value. It's a baseline expectation dressed up as identity.
Real values are specific. They create tradeoffs. They explain why you do things that confuse outsiders.
Here's an example:
A founder tells me, "One of our core values is excellence."
I ask: "What did excellence cost you last quarter?"
Silence.
"What client did you turn down because their definition of excellent didn't match yours?"
More silence.
"What person did you coach out because they consistently delivered 'good enough'?"
He admits he hasn't done any of those things.
That's not a value. That's a wish.
The Cost: What Happens When Values Aren't Real
Fake values don't just waste wall space. They create three expensive problems:
1. Decision Paralysis
When your stated values don't reflect how you actually decide, leaders freeze. They know what the poster says. They also know what the founder rewards. When those two things conflict, they wait for permission instead of acting.
A leadership team lists "speed" as a core value. But the founder regularly delays decisions to gather more data, revisits closed conversations, and changes direction after implementation starts.
The team doesn't move fast. They move carefully, watching for signals. Speed isn't the value. Certainty is. But because no one has named that, every decision becomes a negotiation.
2. Talent Misalignment
You hire for the values you list. You promote based on the values you actually have. When those don't match, your best people leave confused.
A company says they value "ownership." In practice, they reward people who check in frequently, get approval before acting, and defer to the founder on judgment calls.
The person who takes initiative and moves without permission gets called "reckless." The person who waits for a green light on everything gets called "dependable."
Ownership isn't the value. Alignment is. But the job posting said ownership, so they hired someone who wanted autonomy. That person is now updating their resume.
3. Cultural Drift
Without real values embedded in systems, culture becomes whatever the loudest or most senior person models. When that person leaves, the culture shifts. When you scale, it fragments.
A 12-person agency has a strong culture. Everyone knows "how we do things here." They double to 24 people in 18 months.
The new hires don't absorb the culture because no one can articulate what it is. It's just "vibe." Some new people guess right. Others guess wrong. Conflicts increase. The founders feel like they're losing something but can't name what.
The culture was never codified. It was just the behavior of the first 12 people. Now it's 24 different interpretations of what seemed to work before.
The Truth: Your Values Already Exist
Here's the good news: you don't need to invent values. You need to observe them.
Your values are already present in how you operate. They show up in:
Who you promote, protect, and fire
What you tolerate when you're overwhelmed
Where you spend money when margins tighten
What you refuse to do, even for a large client
Which mistakes you forgive and which ones you don't
The work isn't aspiration. It's articulation.
Most founders skip this step. They write down what they want to be true instead of what is already true under pressure. Then they're confused when the team doesn't live it.
You can't embed a value you don't already practice.
The process I use with founders is called the CORE Method: Collect → Observe → Rank → Embed.
It's designed to pull real values out of behavior, test them against reality, and build them into operations so they survive scale.
You can work through this manually using the steps below, or you can use the Core Value Forge™, which walks you and your leadership team through the entire process and generates a complete values framework in about an hour.
Let's walk through each step.
Step 1: Collect the Raw Material (Truth, Not Aspiration)
Values don't live in your head. They live in your decisions.
Start by gathering evidence of what you actually do when stakes are high.
Exercise: Proud / Pain / Price
Have your leadership team answer these three questions individually, then compare answers:
Proud: What moments are you most proud of in the last 12–24 months? What did you do?
Not what you felt. Not what you wanted. What you did.
Example answers:
"We told a client their strategy wouldn't work, even though it risked the renewal."
"We fired a top biller who was toxic to the team."
"We turned down a six-figure project because the deliverable didn't match our standards."
Pain: What situations made you angry or disappointed? What got violated?
Example answers:
"A team member blamed the client for a miss we caused."
"Someone shipped work they knew wasn't right because we were behind."
"A senior person made a commitment without checking capacity."
Price: What have you sacrificed—revenue, speed, comfort, people—to do it "the right way"?
Example answers:
"We walked away from $200K in revenue because the client wanted us to cut corners."
"We took three months longer to launch because we wouldn't release it broken."
"We let a senior person go even though it hurt our capacity for two quarters."
The goal is to generate 20–40 behavior statements. Not values yet. Just evidence.
This is what separates real work from a branding exercise. You're not choosing words that sound good. You're naming patterns that already cost you something.
Step 2: Observe the Patterns (What Repeats Under Pressure)
Now you sort your behavior statements into five categories:
1. Non-Negotiables
These are behaviors you repeat even when it costs you. You do them under pressure, under budget, under deadline.
These are your only candidates for core values.
2. Aspirations
These are behaviors you want, but you're not consistent yet. You do them when it's easy. You skip them when it's hard.
Important to name. Not ready to be core.
3. Permission-to-Play
These are table stakes: honesty, basic respect, showing up on time. Every serious company has them. They don't differentiate you.
4. Cultural Artifacts
These are quirks, traditions, or stylistic preferences. They matter to your people, but they're not values.
Example: "We always do a team lunch on Fridays." That's culture. It's not a decision-making principle.
5. Anti-Values
These are things you refuse to become. They're often as defining as your positive values.
Example: "We will not operate with opacity." That might reveal that transparency is a core value, but it's worth naming what you're allergic to.
Why This Step Matters
Most companies skip straight to naming values. They pick words that sound good without checking if the behavior is consistent.
This step forces honesty. If a behavior only shows up in "aspirations" or "cultural artifacts," it's not core yet. Don't pretend it is.
A founder lists 15 behavior statements. Only 4 consistently show up as non-negotiables. The other 11 are aspirations or artifacts.
That's normal. Most companies can truly sustain 3–5 core values. Everything else is noise.
Step 3: Rank Into "Core" (Only What You'll Defend With a Consequence)
Now you test each candidate value against three filters:
The Three Tests
Cost Test: Would we pay a real price to keep this? (Time, money, reputation, opportunity)
If the answer is "yes, but only if it doesn't cost too much," it's not core.
Tradeoff Test: Does this help us choose between two good options?
Values exist to break ties. If it doesn't clarify a hard decision, it's not useful.
Consequence Test: Will we actually coach or fire based on this?
If you won't hold people accountable to it, you don't actually believe it.
Example: Testing "Speed"
A leadership team says "speed" is a core value.
Cost Test: Did we ever ship something incomplete because moving fast mattered more than perfection?
Yes. Last quarter we launched a feature with known bugs because waiting another month would have missed the window.
Tradeoff Test: Does "speed" help us decide between two good options?
Yes. When we're torn between a thorough discovery process and getting a pilot in market, speed tells us to run the pilot.
Consequence Test: Would we coach someone who consistently delays decisions to gather more input?
Yes. We'd tell them they're slowing the team down, and if it didn't improve, we'd move them out of a decision-making role.
Speed passes all three tests. It's core.
Example: Testing "Innovation"
Another team says "innovation" is a core value.
Cost Test: Did we ever turn down safe revenue to try something new?
Not really. We talk about innovation, but we mostly do what's proven.
Tradeoff Test: Does "innovation" help us decide between two good options?
No. We usually pick the lower-risk path.
Consequence Test: Would we coach someone who never suggests new ideas?
Probably not, as long as they execute well on existing work.
Innovation fails all three tests. It's an aspiration, not a core value.
This is where most values exercises break down. Teams list values they want to have instead of values they will defend. Then they wonder why the team doesn't live them.
If it fails any of the three tests, it's not ready to be core.
The Rule: 3–5 Core Values Maximum
Most companies can sustain 3–5 core values. More than that becomes decoration.
If you have seven values, at least three of them are either redundant, aspirational, or just cultural style preferences.
Narrow it down. Real values are expensive to maintain. You can only defend a few.
Step 4: Embed the Values Into Operations (Or They're Fake)
This is where most companies stop. They name the values, put them on the website, maybe print a poster.
Then nothing changes.
Values don't live in documents. They live in systems.
For each core value, you must define:
Definition (one sentence, plain English)
Behaviors (what it looks like in meetings, client work, delivery, conflict)
Boundaries (what violates it)
Proof (how you'll measure or observe it)
Ritual (where it shows up repeatedly)
The Embedding Map
Here's the minimum set of systems every value must touch:
Hiring: What interview questions reveal this value? What signals do you score for?
Onboarding: How do you teach new hires what this value means here?
Performance: What behaviors earn trust and promotion? What behaviors trigger coaching or removal?
Client Work: What will you do or not do because of this value?
Decision-Making: How do leaders use this value to break ties?
Accountability: What happens when someone violates this value?
If a value doesn't have a system home, it won't survive the next busy quarter.
Example: Embedding "Ownership"
Let's say "ownership" is a core value. Here's what embedding looks like:
Definition: We act like we own the outcome, not just the task.
Behaviors we praise:
Spotting a problem no one assigned you and fixing it
Saying "I missed this" instead of "they didn't tell me"
Bringing solutions, not just problems
Boundaries (what violates it):
Waiting for permission when you have the context to act
Blaming others when the outcome was in your control
Saying "that's not my job" when the client or team needs help
Proof: We track how often people escalate decisions vs. make them.
Ritual: Every weekly team meeting includes an "ownership spotlight"—one example of someone acting like an owner that week.
Hiring: We ask: "Tell me about a time you took responsibility for something that wasn't technically your job. What did you do and why?"
Performance: Ownership is one of three scorecard dimensions. You can't get promoted without demonstrated ownership behaviors.
Client work: We don't say "the client didn't give us what we needed." We say "we didn't get what we needed from the client"—and we figure out how to get it.
Now ownership is real. It's in the interview. It's in performance reviews. It's in how we describe misses. It governs daily behavior.
That's embedding.
The Core Values Sheet (Your Final Deliverable)
For each core value, create a document that looks like this:
VALUE NAME
Definition: [One sentence]
Behaviors we praise: [3–5 specific examples]
Behaviors we correct: [3–5 specific examples]
Hard line: "We will not [specific action]."
Decision rule: "When forced to choose, we [specific priority]."
How we embed it: [Hiring / Onboarding / Performance / Client Standards / Decision-Making]
This document becomes your operational guide. It's what you give new hires. It's what managers reference in performance conversations. It's how you make consistent decisions under pressure.
If you don't have this document, your values are still just words.
The Core Value Forge™ generates this entire framework for you, including the embedding strategies and behavior definitions. It's built specifically to help you move from "we have values on the wall" to "we operate by these principles."
Common Mistakes to Avoid
Mistake 1: Listing Aspirations as Core Values
You want to be innovative. You're not yet. Don't list innovation.
Name where you are, not where you wish you were. Build toward aspirations separately.
Mistake 2: Too Many Values
Seven core values means you have four real ones and three decorative ones.
If everything is important, nothing is important. Narrow it down.
Mistake 3: Vague Language
"We value excellence."
What does that mean? Excellent compared to what? Excellent at what cost?
Make it specific enough that someone could violate it and you'd both know.
Mistake 4: Values That Don't Create Tradeoffs
"We value both speed and quality."
Okay. A project is late. Do you ship it incomplete or delay the launch?
If the value doesn't help you choose, it's not a value. It's a wish for a world without tradeoffs.
Mistake 5: Not Embedding Into Systems
You defined the values. You wrote them down. You posted them.
Then you hired someone without checking for value alignment. You promoted someone who violated a core value because they hit their numbers.
The values aren't real until they govern decisions. That means systems.
Why This Matters More Than You Think
Core values aren't a branding exercise. They're a leadership tool.
When your values are real and embedded, three things happen:
1. Decisions get faster. Leaders don't need to escalate every tradeoff. The values tell them how to choose.
2. Culture scales. New hires learn "how we do things here" through systems, not osmosis.
3. You attract the right people and repel the wrong ones. Clear values are a filter. Some people will read them and self-select out. That's the point.
A company with real values can make hard decisions quickly, maintain culture through growth, and build a team that operates with aligned judgment even when the founder isn't in the room.
A company with fake values does none of that.
How to Get Started
You have two paths:
Path 1: Do it manually. Use the CORE Method above. Gather your leadership team. Work through Collect, Observe, Rank, Embed. It will take 4–6 hours of focused work, plus follow-up sessions to finalize the embedding strategy.
Path 2: Use the Core Value Forge. I built this tool to compress the process into about an hour. You and your team answer a structured set of questions. The tool identifies your real values, tests them, and generates a complete Core Values Sheet with embedding strategies.
It's fast. It's thorough. And it ensures you don't skip the hard parts.
You can access it here:
Either way, the goal is the same: move from values you wish you had to values you will defend.
Most companies never do this work. They copy-paste generic values and wonder why culture feels weak or decisions feel slow.
You're capable of better.
Your values are already there. Name them. Test them. Embed them.
Then make decisions accordingly.
