The values exercise is one of the most frequently commissioned and least consequential activities in organisational development. This is not a criticism of the people who commission it. Most leaders who invest in values work are genuinely trying to build the cultural alignment they believe their organisations need. The gap between intention and outcome is structural rather than motivational, and understanding it is more useful than simply cataloguing the failures of values processes.
The structural gap is this: the values exercise produces a document describing the values the organisation aspires to embody. The document then needs to produce changes in how thousands of people make decisions in thousands of situations across the full complexity of the organisation’s daily operation. The mechanism through which a document produces these behavioural changes is not specified in the design of most values exercises, because specifying it honestly would require acknowledging that the document alone is insufficient and that the real work begins where most values processes end.
Edgar Schein’s distinction between espoused values and values in use is the most important analytical tool available for understanding why values exercises so frequently produce aspiration without operational change. Espoused values are the values that the organisation articulates: what it says it believes and what it aspires to be. Values in use are the values that the organisation’s actual behaviour demonstrates: what it actually prioritises when resources are scarce, what it actually rewards when performance is assessed, what it actually tolerates when stated values and operational convenience come into conflict. Most values exercises produce improvements in the articulation of espoused values without making any change to the conditions that determine values in use, which means they improve the gap between aspiration and reality rather than closing it.
The five things that values exercises almost never do
Understanding what values exercises routinely omit is more useful than cataloguing what they include, because the omissions are more consequential than the inclusions for whether the exercise produces genuine cultural change.
The first omission is the honest assessment of the gap between espoused and operational values before the exercise begins. Most values processes start from a position of aspirational design: what are the values we want to have? The more productive starting point is diagnostic: what are the values our behaviour actually demonstrates? This diagnostic requires the kind of honest organisational self-assessment that is both more uncomfortable and more useful than the aspirational design, because it identifies the specific behavioural patterns and incentive structures that produce the current values in use, which is where genuine change work needs to begin.
The second omission is the explicit design of the accountability structures that will hold the new values operational. The values document that lists courage, integrity, and collaboration as core values without specifying how leaders will be assessed against those values, what specific behaviours will be measured as evidence of each, and what the consequences of consistently operating contrary to stated values will be, has produced aspiration rather than accountability. The accountability structures are the mechanism through which values become operational, and they are the part of values implementation that requires the most difficult conversations, the most senior courage, and the most sustained organisational commitment.
The third omission is the explicit examination of the incentive architecture for its alignment with the stated values. In most large organisations, the formal incentive architecture, the performance management criteria, the compensation structures, the promotion criteria, and the resource allocation processes, was designed before the current values exercise and reflects the values of a prior organisational design. The organisation that produces a new set of values without examining whether its incentive architecture rewards the behaviours those values describe is asking its people to operate from values that the organisation is not actually rewarding. The values that the incentive architecture rewards will always outcompete the values on the wall when the two are in conflict, because rational people respond to the incentives they actually face rather than to the aspirations they are asked to endorse.
The fourth omission is the modelling gap: the failure to attend specifically to whether the most senior leaders are behaving consistently with the values in the specific high-stakes moments when consistency is most difficult and most visible. The values that senior leaders model in difficult moments are the values the organisation will actually operate from, regardless of what the values document says. This is so consistently documented in organisational culture research that it requires no elaborate argument. It is the primary mechanism through which stated values become operational values or remain aspirational. Most values processes acknowledge this principle without creating the specific developmental and accountability conditions that would produce the consistent senior modelling that genuine values implementation requires.
The fifth omission is the honest communication about the gap between where the organisation currently is and where the values exercise aspires to take it. Most values launches communicate the values as if the organisation already embodies them, or as if the aspiration is so nearly achieved that the values represent a description of current reality rather than a developmental target. Employees who know the current reality experience this communication as inauthentic, which damages their trust in both the values and the leadership that is communicating them. The honest communication that says “these are the values we aspire to operate from, here specifically is where we fall short of them currently, and here specifically is what we are committing to do differently to close the gap” is both more credible and more likely to produce genuine engagement with the values than the aspirational presentation that most values launches adopt.
What genuinely changes values in organisations
The evidence on what actually produces genuine values change in organisations, as distinct from improvements in values articulation, is both consistent and demanding. The mechanisms that produce genuine values change are not primarily communicative. They are structural, relational, and experiential.
Structural change that aligns the incentive architecture with the stated values is the most powerful available lever. When the performance management system explicitly assesses and rewards the specific behaviours that the stated values describe, when promotion decisions visibly favour people who demonstrate the values in the difficult moments when doing so carries personal cost, and when leaders who consistently behave contrary to the stated values face consequences rather than accommodation, the values become operational in ways that communication and aspiration cannot produce.
Relational change in the quality of the conversations that allow honest engagement with the gap between stated and actual values is the second most powerful lever. The organisation whose cultural norms allow the honest conversation about the specific ways in which a specific decision was inconsistent with the stated values, and whose senior leaders model the willingness to engage with that conversation without defensiveness, is building the relational infrastructure through which values become genuinely operational rather than aspirationally stated.
Experiential learning through specific, structured encounters with the behavioural implications of each stated value is the third lever, and the one most directly within the scope of leadership development design. The leader who has been placed in a simulation that genuinely tests their courage, their integrity, or their collaborative instinct under conditions of real pressure, and who has processed that experience in a facilitated conversation that connects it to the specific organisational context in which those values need to operate, has engaged with the values at a level of depth that workshop discussion and values communication cannot produce.
The measurement that accountability requires
The values accountability that most consistently produces genuine values change is the accountability that is specific, observed, and consequential. Specific means that the behaviour expected in service of the value is described precisely enough that it can be observed: not “demonstrate integrity” but “when you disagree with a direction that has senior support, name the disagreement directly rather than expressing it through qualifications or omissions.” Observed means that the specific behaviour is genuinely monitored, not through surveillance but through the honest attention of the leader’s direct relationships and the performance management conversations that draw on that observation. Consequential means that consistent failure to demonstrate the specific behaviour has specific and visible effects on the assessment of the leader’s performance, their development trajectory, and their organisational standing.
The specific accountability mechanism that most reliably produces this combination is the structured stakeholder feedback process: the regular, honest collection of specific observational data from the people who work most closely with each leader, focused explicitly on the specific behavioural indicators of the stated values. This mechanism makes the accountability visible, makes the evidence specific and attributed, and creates the condition for the honest developmental conversation that values accountability requires. It is more demanding than the annual values survey and considerably more likely to produce the genuine behavioural change that the values exercise was designed to motivate.
The values exercise that produces a document and a communication campaign has done the easy part. The hard part is the structural, relational, and experiential work that follows it, the work that actually changes behaviour rather than articulating aspiration. Most organisations commission the first and underinvest in the second, which is why most values exercises change nothing that matters.