“What are your core values?”
I asked that question to a room of 14 CEOs during a mastermind session. Every single one of them answered within seconds. Integrity. Excellence. Innovation. Teamwork. Family.
Then I asked the follow-up: “Tell me about the last time one of those values cost you something.”
Silence. Fourteen people staring at notebooks.
That’s the gap. Most leaders can recite core values. Almost none can prove they’ve lived them. And the root problem isn’t a lack of character. It’s a bad definition.
The standard definition of core values sounds like this: “Core values are the fundamental beliefs and guiding principles that shape an organization’s culture and decision-making.”
That definition is accurate. It’s also useless. It tells you what values are supposed to do without helping you figure out which ones are actually yours.
Here’s the definition I use with every founder and CEO I work with: Core values are the non-negotiable principles you default to under pressure.
Not during the quarterly offsite when everyone’s feeling collaborative. Not in the job posting where you list “integrity” because it sounds right. Under pressure. When the decision is hard. When it costs you money, time, comfort, or relationships.
That distinction changes everything.
Why the Standard Definition Fails Leaders
The problem with most core values definitions is they treat values like a menu. Pick five that sound good. Print them on a poster. Move on.
I made this exact mistake at Arcules. We had values on the website. I couldn’t tell you what they were without looking. And when a real decision arrived, those words on the wall were completely irrelevant.
Here’s what actually happened. We needed to cut 15% of our workforce to hit profitability targets the board wanted. The spreadsheet said cut the team in Gothenburg because their costs were 30% higher than our team in Manila.
Our website said we valued “people” and “excellence.”
The spreadsheet and the poster were in direct conflict. And the poster lost. We cut the Gothenburg team. Revenue improved. And I lost 11 people who had built the core architecture of our platform because I’d never defined what “valuing people” actually meant in terms of behavior and trade-offs.
That’s what a bad definition costs. Not an abstract leadership lesson. Real people, real consequences, real regret.
The definition that works forces you past the comfortable vocabulary and into the uncomfortable truth about what you’ll actually sacrifice for.
The Four Types of Values (Only One Type Matters)
Patrick Lencioni breaks values into four categories. I’ve adopted this framework because it exposes the confusion that kills most values exercises.
Core values. What you stand for even when it puts you at a competitive disadvantage. These are non-negotiable. They’re the ones you’d maintain even if they cost you revenue, speed, or popularity. They’re rarely more than three to five.
Aspirational values. What you want to stand for but don’t yet. Be honest about the gap. Calling something a core value when it’s actually aspirational creates a credibility problem with your team. They see the disconnect even if you don’t.
Permission-to-play values. The baseline expectations of any functioning organization. Honesty. Respect. Professionalism. These aren’t differentiators. Claiming “integrity” as a core value is like a restaurant claiming “we use clean plates.” It’s expected, not distinctive.
Accidental values. The values that emerged organically because of your early hires, your industry, or your own personality. Sometimes these are great. Sometimes they’re toxic patterns nobody questions because “that’s just how we do things.”
Most companies mix all four types into one list and call them “core values.” The result is a list of seven to ten words that includes some things you’d die for, some things you’re working toward, some things that are table stakes, and some things that are just habits.
If you want to go deep on separating these and defining your actual core values, I’ve built a complete process in the hub guide.
What Core Values Are NOT
Let me clear up five misconceptions I see constantly.
Core values are not aspirations
If you value “work-life balance” but you worked 70-hour weeks for the last three years, that’s not a core value. That’s a wish. There’s nothing wrong with aspirations. But calling them core values creates a gap your team can see and you can’t.
Be honest. Which values do you actually live? Those are core. Everything else goes on a different list.
Core values are not mission statements
Your mission describes what you’re trying to accomplish. Your values describe how you’ll behave while you do it. A company with a mission to “make healthcare accessible” could do that with radically different values. One might value speed and disruption. Another might value thoroughness and compliance. Same mission. Different values. Different culture. Different team.
Core values are not personality traits
“I’m competitive” is a personality trait. “Win by outworking and outthinking the competition” is a core value. The difference: a value is a conscious choice about behavior. A trait is just who you are. Values are actionable. Traits aren’t.
Core values are not rules
Rules tell people what they can’t do. Values tell people how to think when there is no rule. That’s the power. You can’t write a rule for every situation. But if your team understands your values deeply enough, they’ll make the right call in situations you never anticipated.
This is what makes values the ultimate delegation tool. When your team knows what you stand for, they don’t need you in the room for every decision.
Core values are not permanent posters
Values should be revisited. Not because your core values change (they rarely do) but because your language around them sharpens over time. The way I articulate my values today is more precise than how I would have described them five years ago. Same principles. Better words.
How Core Values Actually Function in a Business
Here’s what core values do when they’re defined correctly and operationalized in the workplace.
They compress decision-making
One of the founders in my CEO mastermind runs a 45-person marketing agency. Before we defined her values, every client conflict triggered a three-day internal debate. Should we fire them? Can we afford to? What if they leave us a bad review?
We built three decision filters from her values. Now her team resolves 80% of client issues without escalation. Not because they got smarter. Because they finally had criteria.
That’s the bottleneck-breaking power of clear values. I’ve written more about this connection in why core values matter in business.
They filter hiring and firing
Skills can be taught. Values alignment can’t.
At Arcules, I learned this the hard way with Peter, my Engineering Manager. Brilliant technologist. His team had 20% annual turnover. I calculated the cost: $450K per year. $1.35M over three years. The problem wasn’t his skills. It was a values mismatch. He valued individual excellence above team development. We valued building leaders.
The conversation wasn’t about performance metrics. It was about values. And that reframe made it productive instead of adversarial. Turnover dropped from 20% to 8% within six months.
Use your values as the primary filter in every hiring decision. Build interview questions that test values, not just skills. If “say the hard thing early” is your value, ask candidates: “Tell me about a time you gave someone difficult feedback they didn’t want to hear. What happened?” The specifics of their answer tell you everything.
They build trust that compounds
Brene Brown’s research on leadership and vulnerability shows trust is built through consistency between words and actions. Core values give you the structure to stay consistent even when consistency is inconvenient.
When your team sees you make a tough call and can trace it back to a known value, trust deepens. When you make an exception that contradicts what you’ve said you stand for, trust erodes fast. Your team is always watching. Core leadership values are what make your behavior predictable, and predictability is the foundation of psychological safety. For a closer look at how consistency in hard decisions builds that trust, I’ve mapped out the specific leadership values that build trust and the seven principles behind them.
They define culture at scale
You can manage culture personally when you have 10 employees. At 50, it’s harder. At 150, it’s impossible without values as the operating layer.
Culture is what your team does when you’re not in the room. If your values are clear, specific, and enforced, the culture runs without you. If they’re vague, your culture becomes whatever your loudest employees decide it is.
For specific examples of how companies translate values into culture, check out company core values examples that actually work.
Examples of Real Core Values vs. Fake Ones
Here’s the test. A real core value creates tension. A fake one doesn’t. Let me show you.
Fake: “We value innovation.” Nobody disagrees with this. No tension. No behavioral guidance. What does “innovation” look like at 9 AM on Tuesday? Nobody knows.
Real: “Ship fast, iterate faster. We’d rather fix something live than perfect something in a vacuum.” This creates tension because someone could reasonably say “We don’t ship until it’s proven.” That disagreement is what makes it a real value. It forces a choice.
Fake: “We value teamwork.” Again, who would say they don’t? This is a permission-to-play value, not a core value.
Real: “No brilliant jerks. We’ll sacrifice individual talent for team health every time.” Netflix made this famous. It’s a real value because it costs you something. It means you’ll pass on an A+ performer who poisons the culture. Most companies won’t actually do that.
Fake: “We value our people.” How? Specifically? What happens when valuing your people conflicts with hitting the quarterly number?
Real: “Protect the people who protect the mission. Even when it costs us a client.” That’s specific. It’s actionable. And it’s been tested. I fired a client who represented 15% of our revenue because they were verbally abusive to my project manager. The value told me what to do. The P&L told me not to. The value won.
For a comprehensive list of values organized by category (so you can identify which ones are actually core to you, not just the ones that sound good), explore the complete core values list with 250+ examples.
The Quick Process to Identify Your Real Core Values
I’ve written the full step-by-step definition process as its own guide. But here’s the compressed version you can start right now.
Step 1: Look at your last five hard decisions. Not easy ones. The ones that kept you awake. For each, answer: What was I protecting? What was I willing to sacrifice? What was non-negotiable? The pattern across your answers reveals your actual values.
Step 2: Name them as phrases, not words. “Say the hard thing early” beats “Honesty.” “Decide fast, correct faster” beats “Agility.” Phrases tell you what to do. Words just tell you what to feel.
Step 3: Apply the cost test. Has this value ever cost you something significant? Lost revenue? Lost relationship? Lost comfort? If you’ve never paid for it, it’s an aspiration, not a value.
Step 4: Narrow to three. Not five. Not seven. Three for your company. Your team needs to recite them, remember them, and apply them without a reference card.
If you want structured exercises to run this with your leadership team, check out core values exercises for teams.
Frequently Asked Questions About Core Values
What are core values in simple terms?
Core values are the principles that drive your behavior and decisions when nobody’s watching and the stakes are high. They’re not what you say you believe. They’re what you prove through action. The simplest test: has this value ever cost you something? If yes, it’s real. If not, it’s decoration.
What are the 5 most common core values?
The five values you’ll see most often on corporate walls are integrity, respect, innovation, teamwork, and excellence. But here’s the problem: these are so universal that they don’t differentiate anyone. They’re permission-to-play values, not true core values. Real core values are specific enough that someone could disagree with them. “Move fast and break things” is a value. “Excellence” is a vocabulary word.
What is the difference between core values and personal values?
Personal core values are principles you hold as an individual. Company core values are shared principles that guide organizational behavior. In founder-led companies, there’s significant overlap because your values imprint on your culture whether you plan for it or not. The key distinction: company values need to be shared and embraced by the team. Personal values are yours alone. Both should be defined with the same rigor and specificity.
How many core values should you have?
Three for your company. Three to five for yourself. Brene Brown recommends two. Lencioni says three to five. The research consistently points the same direction: fewer values, lived deeply, beat a long list lived poorly. Three is the number your team can remember and apply in the moment when it matters.
Can your core values change?
Your foundational values rarely change. The way you articulate and prioritize them will. A health scare might move “Protect my health” from the background to the foreground. Becoming a parent sharpens what “family” actually means in daily practice. When my son Noel was diagnosed with autism, my understanding of patience and presence transformed completely. The underlying principle stayed the same. Its expression and priority shifted.
What happens when core values conflict with each other?
This happens more than people admit. You might value both speed and quality. Both autonomy and accountability. The resolution isn’t choosing one over the other permanently. It’s knowing which value leads in which context. During a product launch, speed might take priority. During a crisis, transparency might override efficiency. The key is making that choice conscious, not reactive. I’ve written about this tension in values-based leadership.
What To Do Right Now
Grab a piece of paper. Write down your last five hard decisions. For each one, answer two questions: What was I protecting? What was I willing to sacrifice?
The pattern you see is your actual values.
Not the poster on the wall. Not the ones from the retreat. The real ones. The ones you’ve already been living, whether you named them or not.
If the pattern surprises you, good. That means you’ve been operating on autopilot. Naming the pattern is the first step toward operating with intention.
And if you want to turn those patterns into a structured leadership system that runs on five minutes a day, The 5-Minute Leader gives you the daily protocols to keep your values front and center in every decision, every meeting, and every conversation.
