Company values vs culture – how do they differ (and why does it matter)

By now, we all know about the importance of core values and organisational culture

The problem is that people often use these terms interchangeably when they’re actually completely different concepts.

While they work closely together, it’s important to remember that core values and culture affect a company’s operations in different ways – from attracting talent and retaining employees to its overall productivity and decision-making process.

To help differentiate the two, we’ll delve into what sets core values and culture apart, explore how they work together and share tips on building a strong culture that aligns with your principles.

Values and culture: what’s the difference?

Core values and company culture are equally important to running a successful business but understanding how they differ in essence and application is key to making the most of them.

Core values defined

Core values are the crucial beliefs and guiding principles that define what is important to an organisation. They represent what the company stands for and help to shape its organisational culture, influence its strategic direction and ensure consistency in how it operates.

Once defined, you must practice your core values and integrate them effectively into every aspect of your business – from leadership and decision-making to employee interactions, customer service and even product development. This consistency ensures that your values aren’t just words on paper, but are lived out daily to build trust and accountability for both customers and employees.

Company culture defined

A company’s organisational culture is the shared values, beliefs, behaviours and practices that characterise and are reflected in its day-to-day work environment. It embodies the environment, traditions and norms that influence how employees communicate, make decisions and approach their tasks.

Company culture is generally formed by leadership, policies and the attitudes of employees and is reflected in the workplace atmosphere, the way problems are solved and how successes are celebrated. A strong, positive culture can lead to higher employee satisfaction, increased productivity and better engagement and effort towards achieving the organisation’s goals.

The difference between values and culture

While core values and culture are closely related, they serve different purposes within an organisation. Here are the key differences.

1. Implementation

Establishing new core values is a simpler process for a company to define the key principles that reflect its mission statement and aspirations. Embedding these values can be carried out immediately, and organisations can use them to set work priorities and guide team action.

On the other hand, culture takes longer to implement and change compared to company values. This is because changing a company culture requires steps like evaluating what’s going well and what needs to be improved, defining the desired culture and engaging leadership to champion this change. Good communication of the new culture is also needed to ensure that all employees understand and align with these changes.

2. Impact

Strong core values have a positive impact on an organisation’s long term strategy, brand identity and how the company is perceived by customers and external stakeholders. They provide a foundational framework for decision-making, influence organisational priorities and guide ethical behaviour.

Meanwhile, a good company culture directly influences employee engagement, satisfaction, productivity and organisational morale. It shapes the daily work environment, impacts interpersonal relationships and affects how employee adapts to change. Companies with a positive work culture have a 65% lower turnover rate, while organisations with a highly engaged workforce are 21% more profitable.

3. Expression

Core values are often formally documented and communicated through mission statements, value statements and company policies. Companies use them as a guide for making decisions and defining their strategic direction, providing clarity and consistency in what the organisation stands for. Core values are also integrated into onboarding materials, employee handbooks and leadership communications to ensure understanding and alignment across all levels.

Culture is expressed informally through the behaviours and everyday practices of employees. It emerges organically from interactions among workers and the “unwritten norms” that develop over time. A company’s culture is reflected in its work environment, communication styles and the way teams work together to solve problems.

4. Consistency

While core values can evolve, they’re often eternal and provide a consistent foundation for the organisation’s identity and direction. They represent the enduring principles that guide long term decision-making and maintain continuity during a period of change. In other words, they keep the company’s mission and vision at the forefront, providing stability and clarity even as strategies and market conditions shift.

Culture is more adaptable in comparison as it evolves in response to changes within the organisation, such as new leadership, growth or external market conditions. While it can shift over time, culture provides the practical context where core values are practised, ensuring they are embedded into the everyday operations of the company. Culture helps employees understand and engage with the values, fostering a sense of belonging and consistency with the company’s missions and goals.

How do values and culture work together?

Core values and culture often come hand-in-hand, and when used together effectively, they can both create a cohesive and motivating environment that drives organisational success.

Moreover, 54% of employees consider a company’s mission or values statement as a key aspect that defines organisational culture. Meanwhile, 97% of decision-makers and strategic leaders agree that a collective mindset directly improves company culture.

Values and culture work together in many ways, including:

1. Guiding decision-making

Core values guide strategic decision-making and problem-solving processes, while culture affects how these decisions are implemented and perceived by employees.

Example: “Innovation” is a company’s core value. This means it might prioritise investments in research and development or encourage creative thinking in its strategy. The culture, however, will determine whether employees feel they can take risks, share new ideas and experiment without repercussions for failure.

2. Shaping behavioural norms

Values provide a foundation for expected behaviour, but culture is what influences these behaviours in action and how they manifest in daily operations.

Example: If “collaboration” is part of a company’s core values, the culture should encourage teamwork, open communication and supportive interactions. This could involve creating spaces that facilitate group work, implementing regular team meetings or cross-departmental projects and creating an environment that embraces diverse perspectives.

3. Boosting employee engagement

Strong core values can help to attract and retain employees who share similar beliefs. Therefore, the company should practice what it preaches through its culture, where those values are actively lived out.

Example: If a company lists “Integrity” as a core value, it can attract employees who prioritise honesty and ethical behaviour. When joining the team, it’s important that new hires can see that these ethical practices are the norm in everyday operations, such as recognising employees who demonstrate integrity, encouraging ethical decision-making and maintaining a no-tolerance policy for dishonesty.

When employees feel that their personal beliefs align with the company’s values and see those values consistently in their culture, they’re more likely to be motivated and take pride in their work. After all, 84% of employees say that believing in a company’s core values is important to them when working for an organisation.

4. Aligning teams and departments

Shared values and a strong culture can help align teams and departments within an organisation. Collaboration is more effective when everyone is working towards the same set of values and goals and can lead to greater performance. Teams that work well together are 50% more productive, according to research by Stanford University.

Example: If “customer focus” is a core value, teams across different departments (eg customer service, marketing and sales) will all prioritise and understand meeting customer needs. This shared commitment encourages easy collaboration, where each department works together smoothly to enhance the customer experience.

Can values and culture crash?

The short answer is yes.

This can happen when there is a misalignment between what a company claims to prioritise and the actual behaviours and practices within its workplace culture. This can lead to a lack of trust, confusion and the organisation’s vision becoming skewed.

For example, if a company emphasizes “integrity” as a core value yet its culture encourages a “win at all costs” mentality, employees may feel pressured to compromise ethical standards to achieve results. Similarly, if leadership promotes “collaboration” but the culture is competitive, it can create confusion and prevent effective teamwork.

How to build a culture aligned with your values

To avoid misalignment and ensure that your core values are genuinely reflected in the workplace, it’s important to actively integrate them into your culture. You can do this through:

1. Reflecting and communicating your values

First, you’ll need to ensure that your core values are stated in a simple, yet engaging manner.

For example, music streaming giant Spotify regularly revisits its current processes and values, considering the ways past values were upheld, particularly those that weren’t successful in engaging employees.

You should also ensure your values are prominently communicated through internal communications, such as newsletters, team meetings and employee handbooks.

2. Assessing your current culture

At this stage, you’ll need to evaluate your company culture and determine if employees are engaged with these values and their work and if they understand the company’s goals. Look into what’s going well, and what needs improvement and identify any gaps between the stated values and actual practices. You could also hire a culture consultant if a major culture change is needed.

3. Recognising your employees

Make sure to recognise and reward employees who demonstrate behaviours that align with your company’s core values. This can be through formal recognition, programs, bonuses or just simple public acknowledgement. More than 80% of employees say that recognition improves their engagement, and feel more motivated when their efforts are acknowledged.

For example, Google uses a spot program where managers can reward employees with cash or non-monetary gifts (eg a dinner for two) for one-time achievement. It also has a peer-to-peer bonus program where employees can recognise others with personalised messages and cash bonuses.

4. Aligning policies and practices

You should ensure that organisational policies and performance evaluations reflect and reinforce your core values. For example, update your code of conduct to include core values and guide employee behaviour accordingly. In performance reviews, make sure to incorporate criteria that assess how well employees embody these values in their role, such as customer focus or teamwork.

5. Providing training and development

This involves offering training programs that emphasize the importance of core values and how employees can embody them in their roles. This can include workshops, seminars and ongoing education that focus on practical applications of core values in everyday tasks and decision-making. Role-playing scenarios and group discussions can be effective in helping employees explore real-world situations where core values come into play. You can also provide resources like guides and e-learning that employees can refer to if needed.

6. Fostering open communication

Strong internal and external communication is a critical component of effective leadership as it can lead to better clarity, efficiency and results. You can encourage open communication by creating channels where employees can discuss or address cultural issues or any discrepancies between values and practices.

7. Regularly assessing and adjusting

Unfortunately, it can be easy for values and culture to stray away from each other. That’s why it’s important to regularly evaluate this alignment through surveys, feedback sessions and performance reviews. You should also be willing to make any adjustments as needed to address any gaps or challenges.

Conclusion

Core values and company culture are equally essential to an organisation’s identity and success. While core values provide the guiding principles and ethical foundation of a business, culture represents how they are applied in daily operations and interactions. By understanding and integrating both into your organisation, you can create a cohesive and strong work environment.

When you define and communicate your core values and align them with your organisational culture, you set the stage for high employee engagement, effective teamwork and organisational success. Moreover, regular reflection and adjustment can help to ensure that core values and culture remain aligned and relevant, thus driving the organisation towards its long term goals while maintaining a positive and productive workplace.