The director leans forward.

“These values we’re introducing. Quality, Integrity and so on. Are they good values, do you think? In the round?”

Eight heads turn towards me.

I rummage in my pocket, and take out my house keys.

“These are my keys. My house key, car key and so on. Are they good keys? Not if they just stay in my pocket. I have to turn them.” I turn one of the keys in an imaginary lock in mid-air. “That’s when they become valuable. When I use them. It’s the same with values. If you only write them on a brass plate, or put them on a mouse mat, or name rooms after them, nothing much will happen. You have to use them.”

“And they become valuable, you say. How? How do values become valuable?”

“Mm. Great question. Let me tell you a story.”

Just before I tell you that story…

It is often said that corporate culture eats strategy for breakfast.

What is not often said is that its appetite is unsatisfied. After breakfast, culture lunches on legal obligations, snacks on professional standards, sups on social mores, and makes mincemeat of a moral compass.

All of which is a complicated way of saying: corporate culture is powerful. It’s the single most powerful influence on behaviour in the workplace.

Employees working in bad cultures will face pressures to do ‘whatever it takes’ to deliver results. The pressures can include bullying, certainly, but more insidiously: groupthink, the obedience towards authority, the bystander effect — all well known to behavioural scientists. Good people set aside their better judgment. A God-fearing middle-manager with a family and an accountancy qualification will cook the books if that’s what the culture demands.

Legislators and regulators have known this for decades. The most powerful tool against a corrupt culture is ‘tone at the top’. The UK Bribery Act is a case in point: companies can now face a charge of ‘failure to prevent bribery’, and an essential part of any defence (among other things) is to demonstrate a robust attitude against corruption, right at the top of the organisation. That’s not an accident. The regulators know that prevention is better than cure, and prevention takes leadership.

And what about good cultures? How do they work?

Following the relevant rules is important, but it’s not enough to give you a strong healthy culture.

The way to do that is to tell the cultural story of your company, using values.

It’s a little like telling creation myths using the sun, moon and stars. The storyteller uses the heavenly bodies as characters to explain the story of creation, and often — by extension — to convey the desired moral landscape.

Similarly, a leader who understands the power of values will use them to tell stories about the organisation. It gives listeners a sense of meaning and purpose amongst the confusion of working life.

The stories tell of times when a value was disregarded, and the people and organisation paid the price. Or they will tell of occasions when a value was remembered just in time, and a short-term sacrifice was made in honour of a long-term benefit.

For example, one of my values is listening. I strongly believe that good listening can transform business relationships. But it’s a rare skill. A partner at one of my clients went on a coaching skills course and learned about the power of deep listening. He decided that he would test a very different approach at his next business pitch. Instead of talking about what his firm was capable of, he simply asked questions and listened carefully to the prospect’s answers. He won the pitch, and the client even said “no-one has ever shown such an interest in our business…”

That’s one of my favourite stories about listening. And that’s how to begin developing a culture: by telling stories and explaining experiences through the lens of your values.

That’s how it starts. What happens next? How do values turn into profit?

Here’s how it works. Research into the value of values is difficult; there’s no obvious way to account for the quality of values except by assuming a link with results, which is the hypothesis being tested. Also, correlation — great values, great results — is not causation. So this is a qualitative explanation, based upon: my experiences working in a company with a great culture; working for a great boss within a difficult culture; working for a bad boss in a great culture; consulting for clients trying to create or recreate better cultures; and piecing together the various pieces of research that do seem to have some validity.

In step one, the stories people hear (and tell each other) help to create a sense of cultural identity. They tap into tribal instincts, differentiating the organisation from others and making them feel special and distinctive.

In step two, the employees sense this distinction and see themselves as part of a bigger meaningful picture. Their engagement levels rise. Hopefully other stakeholders, like the new client in the story above, see this bigger picture too. 

As a result, in step three, employees give their best efforts. Not necessarily in the shape of longer hours — although maybe those too — but they are certainly motivated to bring more care and more thought to their roles in the workplace.

In step four, their discretionary efforts turn into superior results which, incidentally, employees do not begrudge. Rather, they find them to be a satisfying proof of their attitudes and efforts.

In step five, people stay longer with their employer. Because of the better results and cultural reputation, the organisation can pick and choose the job applicants and business partners they want. Of course, they favour those that fit well with the culture.

And so the culture becomes reinforced.

A quick aside: I am writing this on a Tuesday afternoon. I have just been interrupted by a text message from giffgaff, my phone network provider here in the UK. It says:

Your goodybag [i.e. my monthly contract] expires on 29/06/2017. You may want to change your recurring goodybag as we recommend the 4G £7.50 goodybag for you

They are suggesting that I trade down to a cheaper contract. No other network provider has ever suggested this, even after the expiry of a 24-month contract. I now love giffgaff — and I love their (completely fortuitous) sense of timing. I’ve just looked at their website and it says this:

giffgaff is an ancient Scottish word that means ‘mutual giving’. That pretty much sums us up. We believe in listening to our members. Involving them. Being run by them. Rewarding them with money. The idea is that if we all work together, we can really go places…

I promise this isn’t some sort of hidden advert. It literally just happened… And it’s a wonderful example of what I’ve been writing about. It gives me a story to tell about giffgaff and how they really live their value of ‘mutual giving’.

The shadow side of the virtuous circle is a depressing one. “Values? What values?” scoffs the boss. “Just do your job.” The cycle unfolds: a me-first culture, then disengagement, which leads to low effort; hence poor results, pressure to bend the rules, and in consequence a poor reputation when it comes to hiring. All this may be at the other extreme, but unfortunately it’s not rare.

Here’s the story I tell the director and his team that afternoon.

Winter and Summer were twins. You couldn’t tell them apart. And they had always been close, growing up together, attending the same school and university. They looked at the world in the same way. Now they were interviewing for their first real jobs.

Winter had prepared well for her interview with Janus Limited. The interviewer was the Sales Director. She asked him a question: “what are your corporate values?” He answered “yes, we have some written on this coffee mug, but mostly we care about results. What about you — would you be prepared to do whatever it takes to close a deal and hit your targets?” Winter of course said yes, of course — after all, what other answer was there? The Sales Director nodded; she had got the job.

Janus put Winter — and all its salespeople — under extraordinary pressure. “Get the signature, whatever it takes. There are no medals for second place. Win the business, hit your targets or you’re out.” Within months, Winter was jaded and unhappy. But she needed the job. She pestered every prospect she could, whether they would be profitable or not, whether they needed Janus’s products or not.

Summer had also prepared well, and the Sales Director at Augustus Partners asked his final question. “What motivates you? Would you be prepared to do what it takes to impress and please a customer?” Summer nodded and gave an example of a time when she’d helped an elderly lady home from the coffee shop where she worked in the holidays.

She joined Augustus Partners and was quickly immersed into its culture. “Our reputation with customers is more valuable than any individual sale” she was told. She loved her work. It became second nature to spend time getting to understand what the customer really wanted, needed and valued. In one case, she directed a prospect towards a competitor product. Her manager used it as a case study about integrity and told the story widely.

And now it’s two years later. Janus is enmeshed in a reputational scandal and fires many of its staff, including Winter. She had found ways to hit every sales target she was set, but it doesn’t save her. Summer tries to hire her to join Augustus, which is growing and recruiting. After the first interview, the HR manager comes to see Summer. “I’m sorry” says the HR manager. “I asked Winter about her experiences at Janus, and she talked about all sorts of unethical business practices. She was almost boasting. She’s really not for us. It’s a question of values.”

Actually, that’s not true. I didn’t tell that story, I only made it up just now. I showed them the diagram from further up. But I bet you’ll remember the story longer than specifics of the diagram.

There’s no power in a list of exhortations, or in a static list of desirable qualities. Those may be advertised as values — but they’re not real. They have no mythic power. Less attractive behaviours will spring up in their place.

The way to bring values to life is through stories we tell about ourselves. And we can write new stories, by recalling our values when hiring, appraising, promoting, buying, selling, leading, teaching, living, learning.

In this way, the values create a clear sense of who we are and what we stand for. They’re easy to sense but hard to measure, although the benefits that follow — engagement, discretionary effort, results — are much easier to measure.

They are like a flywheel, and every story adds a bit of push. The wheel may be slow to start, but gradually it spins with more and more power. The wheel turns. Values, engagement, discretionary effort, superior results, great people: as they follow one another, they gather momentum until eventually they blur into a vivid, vibrant — and valuable — culture.