Over the past two years, I’ve had occasion to present a talk about the increasing share of consumers who are choosing products and brands based on shared values. The general premise of this talk seems to resonate in nearly every market. But in Japan, it has invited a very different kind of conversation and turned my little American brain to a bigger, more expansive view of how values can contribute to business.
When Japanese clients learn about APCO’s ability to target consumers with tailored messages that resonate with their values, their first question tends to be not “how can I use this strategy to sell more widgets?” but rather “how could we adapt this approach to help recruit and retain the best employees?”
This pivot is explained, in part, by the fierce competition for talent in Japan. With more openings than applicants, Japanese firms have to make an effort to differentiate themselves. (As I’ve noted before, many developed economies are or will soon experience this pressure).
But the real insight for me was that Japanese business leaders view their corporate values as a priority ingredient in their employee value proposition. And to understand why requires a fundamental shift in thinking about the role of values in business:
- To consider the possibility of anchoring every decision on alignment to those values,
- To imagine what it would mean to intentionally integrate them into the design and evaluation of every facet of your operations, and
- To recognize how consistent alignment to defined values promotes group identity orientation and thus higher performance.
Consider the case of Honda, a top-20 global brand and APCO client whose founder, Soichiro Honda, established a clear set of values to guide both how the company should be run and the qualities that team members should possess to produce the best products possible. To this very day, every new associate receives a thorough and inspiring training on Honda’s values—what they are, how they drove decisions and results at critical moments, and why they still weigh heavily into individual and team performance evaluations.
Then contrast that with the average non-Japanese brand of comparable value and longevity. Many of them are playing catch up, trying to establish activities and an external narrative that aligns with the increasing pressures towards sustainability, inclusivity, and social impact. The trouble is that they often segregate this work into CSR and foundation efforts, instead of being built into a company’s strategy, culture, and operations. As a result, the majority of employees do not understand or do not experience their company’s purported purpose directly. In the worst case, they observe—and become disempowered by—a gap between what the business says externally and how it operates internally. As that gap widens, overall performance suffers, employee loyalty is tested, and the risk to reputation creeps upward.
In light of this, I would challenge the executives of today’s most valuable companies and brands to take a page from the Honda playbook. If you are truly committed to maximizing business performance, attracting and retaining the best talent, and contributing to a broader societal mission, then you also must do the work to define (or more ideally, co-create) your company’s core values, to establish internal programs and processes that reinforce them, and to integrate them into every aspect of the business, every expression of the brand.
Honda has an advantage that its founder did this work early, when the company was smaller. But there’s time yet for those leaders who recognize the opportunity.