The Two Giants: Core Values and Business Strategies

A few months back, we all were sitting in a room, having a discussion regarding the structure of an organization, during the session few questions tickled our intellect. What makes a great company actually great, is how few companies like P&G which was started in 1837, almost about 200 years ago are still functioning incredibly well today. So we started researching and went through a lot of resources, we will talk about them later in the article. We also went through the history of many great companies. However, one particular company caught our eye. A company that was started in a workshop situated in a war-damaged department store in Tokyo in 1945, just after the Second World War. The name of that company was Totsuko but we all know it by its latter name, Sony. In the end, we came across the two giants that run the organization, no it's not founders or funding or anything like that. The two giants are — Core Values and Business Strategies. Let’s try and understand these two in the context of the effect they had on an organization like Sony in earlier days.

Core Values

Core values, as the name suggests, are a set of values that construct the core of the company. Just as we humans have a set of values, companies also have a similar set in order to move in the direction they have planned. These values are independent of time, that is, they do not change with time, and if they are changing with time, then they were never part of the core values, to begin with. They are what you can call a “North Star” for the company guiding them throughout the life-span of a company. They are essentially the “why”. To understand what they look like, below are the core values of Sony:

Ever since the beginning of Sony (Originally Totsuko), these core values served as the guiding post for Masaru Ibuka. They never copied or followed anyone else. Sony failed constantly with rice cookers, bean paste, and heating pads but never left innovating even when it meant the sacrifice of profits, even if it meant the risk of survival. It was not the products that made Sony great. It was the company itself. What Masaru created using these core values as the “North Star”. For a long time, Sony was the leader in electronic devices and innovation in the field, be it pocket transistor radios or PlayStation that changed the face of the gaming industry forever.

Business Strategies

Business Strategies or Strategies are the “how” and “what” of the company. How are we going to get those next hundred or next thousand customers? How are we going to market our product and expand its reach? So on and so forth. They keep changing with time, we keep trying and testing different strategies to move forward with our companies and our lives alike. They are what compromise the execution part of the company. We keep testing and keep pivoting from different strategies, we keep what works and learn from what does not work.

One example of this is when Sony started building pocket-size transistor radios TR-63. Sony always had trouble reaching the American Market and so they were trying to make the size so small that people could carry them in their pockets, this was an innovative approach and no one had ever tried this, however, the size was still bigger for the chest pockets. Masaru Ibuka and Akio Morita came up with a strategy to tackle this issue. Everyone on the sales team started wearing customized shirts with bigger pockets to accommodate the radio. Soon after that orders for the radio started flooding in not only from Japan but also from America.

A complementary duo or adversaries

Now that we have a brief idea of what both of these things are, let’s see how they relate to each other, do they complement each other or they are adversaries? Let’s see that using the two analogies.

The Yin and Yang

We know that yin and yang represent the two parts that might be different yet complementary to each other. We know that core values and strategies are part of an organization and they, in fact, can be demonstrated as parts of the yin and yang.

As illustrated, both are complementary and co-exist with each other. We cannot have an organization with just either of them. If there are no core values, the strategies will be directionless and will eventually result in the collapse of the organization, individuals in the organization might know what they are doing but they will never understand the true purpose of the organization. However, if there is an absence of business strategies, there is simply no execution and the organization will not move even an inch.

The Soul and Body

This analogy can best identify the importance or rather priority of core values and strategies.

Here, the core values can be defined as the soul that drives the body and strategies are basically the functions and tasks done by the body. Without core values or the “soul”, the body cannot do anything and your body is as good as dead. However, that does not mean that strategies are not essential, strategies are what provide energy in order to move your body further. The soul or core values of the company decide why we are doing things as well as the body decides how and what we do in order to keep moving.

What comes first?

On the first day of Sony, sitting in that workshop, Masaru Ibuka didn’t think about profits or the right product, or even strategies. “Before he even knew what Sony will do, he knew what Sony will stand for”, so he wrote down the core values, the same ones we saw earlier. After that came, weeks of excruciating brainstorming sessions to decide what to build and how to build it.

Core values and strategies, both are equally important. However, if an edge needs to be given to one of them, we would say core values are more important. Why so? We cannot move without strategies, so why core values are more important? Well, guess what, though we may not have written them down, all the time we have been doing things based on some set of core values subconsciously. We just do not realize it consciously and now that we have come this far, we’d suggest you think carefully about this. Aren’t most of our actions based on some sort of values and beliefs that we follow?

Through The Maze…

If we think of moving our organization forward as analogous to moving through a maze, then the core values act as a guidepost that guides you through the maze and strategies are actually the actions you take to get out of the maze. We sometimes might take the wrong path but our guidepost will always bring us back to the correct one. We have tried our best to clear the two concepts or at least create a spark that would motivate you to dig deep and read about them. What to take away from this article? Core values are the “why” and “north star” of an organization. Strategies are the “how” and “what”. They are different from each other yet they both need to be in sync in order to make a lasting organization.