Leadership is one of the most important components of a contracting business, setting the tone and culture of an entire organization from the top down.

Many of today’s business books talk about the importance of establishing core values in your company. In fact, many business consultants and authors strongly believe that establishing core values is one of the first steps in starting and managing a business.

I am certainly one of those people. I believe that your company’s purpose statement and core values are the foundation on which everything else is built.

Core values may be defined as a person’s or company’s fundamental beliefs. They are the foundation on which we conduct ourselves. We use core values to hire, manage, and fire employees. We use core values to guide how we handle people. You can think of them as your non-negotiable, do not cross boundaries of behavior.

Core Values are Deeply Personal

It is the job of the founder or president to establish core values. Core values should not be created by consensus. It could take a person an entire month or more to create a short list of core values. Typically, you will want to create four or five values. Core values are generally one to five words but there is no firm rule.

The important thing about core values is this: they are deeply personal to you. They should reflect your own personal beliefs about what is important regarding personal and corporate behavior. It is never too late to implement core values in your company. Once implemented, core values should rarely, if ever, change.

Test Your Core Values

When you build your core values, test them against these points:

1. A good set of core values is not industry specific. They could be transferred to any business you own.
2. Your core values should be just as valid in twenty-five years as they are today.
3. If you woke up tomorrow super wealthy, your core values should still apply.
4. You would not hire or keep an employee if they did not adhere to each core value.
5. Your core values should reflect those of your best employees and best friends. They should be dissimilar to those people who you would not be close friends with and have previously fired.

As an example, here are the core values of one of my companies. They also happen to be my personal core values as well:

Aptora’s Core Values

They influence who we hire, who we promote, and who we fire.

1. Don’t lie, cheat, or steal.
2. Make commitments and keep them.
3. Be passionate, determined, and hardworking.
4. Be polite, forthright, and totally candid.
5. Seek continuous improvement.

Different than Guiding Principles

Guiding principles are sometimes made synonymous with core values. As far as I am concerned, they are different. Guiding principles are more operational than personal. Guiding principles are more related to how you work and how you make decisions.

Core values are more related to how you conduct yourself and deal with other people. “Recognize and reward employees based on their output” is a guiding principle. “Be polite, forthright and totally candid” is a core value.

When you do not follow a company’s guiding principles, you don’t get promoted. If you don’t follow the company’s core values, you will be fired.

Introduce Core Values

Have a company meeting where you introduce your core values. This meeting should be upbeat and positive. Let everyone know how you came up with your core values. Let them know what they mean to you personally and why they are important to your company.

Be sure to emphasize the fact that your core values are mandatory and that breaking them can get you fired. I recommend that you post your core values on the wall where everyone will see them throughout the day.

Using Your Core Values

If your core values are deeply personal, this part will be easy and intuitive. Be sure to reference them often so that your staff knows they are not just a fad. The idea is to demonstrate how you use your core values to make decisions on a regular basis.

Reference your core values when you are interviewing people. See if their core values line up with yours.

Reference your core values when reprimanding people. By contrast, reference your guiding principles when coaching and mentoring people.

A Double-Edged Sword

The problem with core values is that you must also abide by them to the very best of your ability. Your employees will be watching you and they will notice when you don’t.

You cannot value honesty and cheat on your taxes. You cannot value commitment and break a promise. You cannot preach kindness and not be polite to everyone.

That’s the hard part for core values — you must follow them. You might have a top performing employee who does not adhere to a core value. After a suitable warning, you must fire that employee because it is obviously not a core value.

You will need to remove that core value from your list and consider adding it to your list of guiding principles.

I have been in this double-edged sword quandary. I have had to fire long term employees, even friends, over a core value violation. That was difficult, but having great core values and not following them is much worse than having no core values at all.

Leadership is one of the most important components of a contracting business, setting the tone and culture of an entire organization from the top down.

Editor’s Note: To learn more about developing effective leadership skills, visit EGIA.org/HVACR-Leadership and download a free training package complete with online classes, core value development worksheet, industry research and much more.