Enron had “Respect, Integrity, Communication, and Excellence” posted across their headquarters while several of their leaders went to prison for fraud. Walk through most Fortune 500 offices and you’ll see values painted on walls and stairwells, as if employees are going to absorb them by osmosis. Corporate Disneyland. It’s hard to take a company seriously that talks about excellence when the bathrooms have that shitty pink soap in them.

The bad reputation is earned. Most people reading this have worked at a company where the stated values were a joke, and the natural reaction is to write off the concept entirely. But the people who’ve actually built something and had to start over tend to reach the opposite conclusion.

Second-time founders don’t skip this

In 2017, I went to a dinner hosted by Michael Siebel at Y Combinator. Every person at the table was a repeat founder, and Siebel asked them what they were doing differently this time. Everyone arrived at the same answer independently: be more deliberate about who comes in the door, and make sure those people share your values.See: Competency Layers Values fit into a three-layer competency model; Competency Layers is where I break that model down.

That’s not a soft preference. You can have a great product, clean infrastructure, and efficient processes, but if you don’t have people who share your values, you regret it enough to start over. When you’re going from one founder to your first hundred employees, values are the difference between a group of people who trust each other, argue productively, and try new things without fear, and a company that turns on itself and becomes something like Lord of the Flies. So the question isn’t whether to do this. It’s who owns it.

This has to come from the CEO and the founders

Values aren’t decided by committee. They’re not an HR project. The CEO has to look at the finished product and say “hell yeah,” because if the CEO doesn’t feel it in their bones, nobody else will either.

But you don’t want to rule by decree. Involve broadly, decide narrowly: do the exercise with the full team, collect their input, but keep the final call with the founders. If you’re doing this later, at scale, the founding team drafts first, then shares with executives for feedback. The process will surface misalignments you didn’t know were there.

As you define your values, you’re going to discover that some people on the team don’t share them, and you’ll have to decide what to do about that. It’s more important to get the values right than to get everyone in the company to fit the values you come up with. But before you can get them right, you need to get the format right.

One format. Do it this way first

Most founders, when they sit down to write values, invent their own format from scratch. I’ve watched enough teams waste months on alternatives to be direct about it: there’s one format that works, and you should try it before you try anything else.

A noun as the heading. Three to four bullets underneath, written in “you” or “we” sentence structure, describing specific, testable behaviors.

Fig. 1. Netflix Culture Deck Value Format Example

Netflix Culture Deck, 2009

Netflix’s 2009 “Culture” deck slides (see an example above) are the gold standard for this format.¹¹ Netflix Culture Deck (original, slides 5-22) It’s the clearest example I’ve found of the noun-plus-behavioral-bullets format working at scale. Look at the behavioral bullets under “Communication”: each one describes something you can actually observe. You can interview for those behaviors, score a candidate on them, and reference them in a performance review. The camera test: could you catch this behavior on film if you followed them around all day? If yes, it’s concrete enough. If not, it’s too vague.

A noun on a poster without behavioral bullets is wallpaper. The bullets are the whole game.

Aim for three to seven values. Five or fewer is better. A generic noun with sharp behavioral bullets beats a clever label with fuzzy behaviors.

The creation process

Get the founders in a room. The first session has two exercises:

1. First, the clone exercise (from EOS).²² Traction Wickman’s EOS clone exercise is the best brainstorming tool I’ve found for surfacing values from the people you’d actually want to work with. Each founder names three people they’d clone if they could fill the company with copies of that person. List what makes them great.

2. Second, the aversive flip. An aversive is the opposite of a value: the thing that repels you rather than attracts you. Name your worst hires, the people who didn’t work out, the colleagues who drove you crazy. People are better at naming what they hate than what they love, and once you’ve named the aversive, the flip into a positive value statement is easy. “They were impossibly verbose” becomes “Concise and articulate in speech and writing.”

The goal of this first session is a bank of positive traits. Don’t consolidate yet. Let it simmer for two to four weeks, because starting the process changes what you notice. You’ll catch behavior in interviews and one-on-ones that you would have missed before.

Reconvene with your fresh observations and consolidate the bank into a concise set, formatted as noun plus behavioral bullets.

Then roll it out. Tell the company why you created values, what they are, and how you’re going to use them. Not a poster, but a deliberate communication. Use them everywhere: in your hiring process, your performance reviews, your all-hands, your daily work. Repeat them until people are making fun of you for talking about them. Before that point, they haven’t landed.

Kill “culture fit”

“Culture fit” is the laziest phrase in hiring. It’s abstract, it’s subjective, and it can tank a great candidate because one interviewer had a bad vibe they couldn’t articulate.

Values with behavioral bullets cure this. When someone says “I don’t know if they’re a culture fit,” you can now ask: on which value? Which specific behavior? “They’re not concise and articulate in their speech.” That’s a real data point, and now the team can decide whether that’s an acceptable weakness or a dealbreaker.

From there, values go into the interview guide as an actual scorecard, candidates get ranked on each value, and the vaguest conversation in hiring becomes the most specific one.See: The MOC Values go into every MOC as company-wide competencies; that’s where I show you how to score candidates on them.

Keep it alive

You’ll hire someone, realize it was a miss, and trace it back to a value you hadn’t articulated yet. That gap needs to get filled. Keep asking one question: are the values you’ve written helping you build the culture you actually want? If not, update them.

Define values. Use them to hire. Discover what’s missing. Refine. Use them again. The companies that treat values as a one-time exercise end up right back where they started, with words on a wall that nobody uses.

The founders who get values right don’t just build better teams. They build a room of people who are wildly different in skills, backgrounds, and perspectives, but who share something underneath all that difference. Values are what make that diversity productive instead of chaotic. Do this well and you end up surrounded by people you’ll remember for the rest of your life.See: The Other Product The people you build with are a product offering too; The Other Product is where I connect that idea. Not a corporate outcome. A human one.