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Values-based leadership is a theory of management where the behavior of employees and the business is based on the stated values of the company. Values may be different for every company, but tend to revolve around the company's relationship with its customers, its workforce, and with society and the planet. Many companies use values-based leadership as a means of inspiring the workforce and creating a more efficient, effective, and productive business.
In a sense, values-based leadership is an emotional and psychological method of business management. The logical point of a business is to generate profit for its owners and shareholders, but this concept may not infuse the workforce with a great deal of drive and motivation. Meeting problems or challenges with the maxim “we need to make more profit” can quickly make employees and customers feel like cogs in a machine, rather than valuable contributors to an enterprise. Values-based leadership seeks to attract workers that agree with the mission and goals of the business, while improving morale by focusing on core issues that are important to workers.
Creating the values on which a leadership program will be based is an important step in the process. Leadership experts stress that the core values of a company need to be timeless ideas that will not wax and wane with fashion. Integrity is a very commonly used core value, meaning that the company and employees will act according to an ethical business code. Superior service and customer relationships is another common and timeless goal. Other core values may include a mission to be a good corporate citizen, support research and innovation, and create professional trust within the workplace and with other companies.
While values-based based leadership is quite common in the business world, it is frequently criticized as disingenuous and even deliberately misleading. This cynicism is not always unwarranted, as a system of core values will become worthless if it is not scrupulously maintained by all levels of the company. Integrity is often a critical part of a values statement because it is so easily abused. Everyone from the CEO down to the janitorial staff must be equally involved in the maintenance of a values system; uneven management of values-based leadership can quickly erode employee morale and respect.
Some experts suggest that the defining quality of a successful values-based leadership program is that drive for profit and wealth is never put ahead of the well-being and dignity of employees. Values-based leaders tend to want their workers to be independently inspired to contribute their best efforts, and seek to bring about this effect by letting the workers know they are valued and respected. By creating a mission statement of values that employees agree is productive, noble, and valuable, leaders focusing on values can help clear the way for employees to reach their full potential.