The difference between Values and Ethics.

When you hear someone talk about their Values, what comes to mind? Likely descriptive words such as honesty, integrity, courage, respect. Maybe you even included such words such as creativity, loyalty, commitment, and freedom.

Interestingly, these tend to be the same kind of words listed as an organization’s Core Values. For example, consider some of the words used by these three companies:

• IBM – dedication, innovation, trust, and responsibility.
• Microsoft – integrity, honesty, openness, mutual respect, and commitment.
• FedEx – innovation, integrity, responsibility, and loyalty.

Do you see a trend here?

These Core Values are designed to identify expected behavior – or rules of conduct. They could also be defined as moral principles or ethics.

According to Dictionary.com ethics can be defined as “a system of moral principles; rules of conduct; and the branch of philosophy dealing with values relating to human conduct, with respect to the rightness and wrongness of certain actions and to the goodness and badness of the motives and ends of such actions.”

Thus defined ethical behavior tends to be made clear in an organization’s stated Core Values, though  there are indications to serious violations (e.g. IBM paying $10 Million to settle bribery charges).

So…. do Values and Ethics mean the same thing?

The terms Values and Ethics are often used interchangeably, which regrettably can cause an organization to miss a golden opportunity to focus on what is truly unique, define a meaningful purpose, and thereby increase brand value.

On the one hand, it’s important to have a set of Core Values that provide moral clarity for an organization’s stakeholders to know what is considered acceptable versus not acceptable.  Establishing a set of principles provides clear direction for everyone. These alone can provide the boundaries that help an organization achieve its objectives.

On the other hand, to build competitive differentiation it’s also important to have a set of Differentiating Values that clearly articulate the unique positioning and key differentiators for an organization’s products and services. Establishing a well-defined set of Differentiating Values provides clear direction to all stakeholders around what is produced or provided, how it gets done, who is involved, where it belongs, and why it matters.

Observations vs. Statements

Unfortunately, few organizations provide the same level of clarity to their Differentiating Values as they do to their Core Values.  Instead they have to be observed through both behavior and communications. For example:

• IBM – they’re still known as big blue, who continually must prove they are smarter than everyone else (now they have the Watson computer who is the top Jeopardy winner). They continue to demonstrate a smart combination of intelligence, adaptability, and mastery.
• Microsoft – a big brute who tends to beat up and/or buy their competition (as long as they have money). With a savvy combination of shrewdness and durability, they continue to be a significant force in the marketplace.
• FedEx – a pervasive brand, who still portray an ‘absolutely, positively, must get it there’ attitude. Providing their reward and recognition systems are maintained, their stated values of loyalty, responsibility and integrity truly represent their differentiating value proposition.

These three companies have big and successful brands. Only one (FedEx) has clearly incorporated their Differentiating Values into their Core Values, though it continues to foster the confusion between Values and Ethics.

Could the value of these brands be even greater if they formally articulated their Differentiating Values, separate from their Ethical/Core Value statements?