Corporate Values Are Not Enough: Why Virtue Is The Missing Ingredient

Forbes

03-05-2025

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What is wrong with having corporate values? Nothing, according to Nate Smith, President of Brindlee Mountain Fire Apparatus — except that they are useless unless they are lived.
Brindlee is the largest buyer and seller of used firetrucks in the Western Hemisphere. A new firetruck costs well over a million dollars, and the time from order to delivery is currently four years, so Brindlee plays an essential role in keeping America's fire departments equipped. In order to ensure that their company values of excellence, service, integrity, and gratitude are lived, they have developed a strong culture of storytelling. The stories they tell and retell illustrate and reinforce each of their values, so that they become habits.
There are three fundamental challenges to companies living their values: values are ideals, not actions, and can all too easily stay at a conceptual level; values are not easy to internalize (which is why companies are constantly reminding their employees of their values); and values are subjective. All three of these challenges can be addressed by supplementing corporate values with the relevant virtues.
A virtue is a specific habit of excellence, like courage, self-discipline, gratitude, or honesty. While the word 'virtue' had in recent years fallen into disfavor, more associated with 'virtue signaling' than with excellence, it is experiencing a comeback thanks to popular writers like Ryan Holiday and his series on the Stoic Virtues.
Virtues are different from values in three important ways, each of which addresses one of the challenges of living corporate values. First, while values are ideals, not behaviors – they are only 'valuable' when they are lived out — virtues are habits of action, thought, and feeling. They are not just ideals to be aimed at, they are cognitive, behavioral, and emotional patterns that are already established through regular practice. One might say that values are 'talking the talk,' while virtues are 'walking the walk.'
Second, research has shown consistently that while it possible to get people to adopt new values, it is nevertheless very difficult. Virtues, however, are habits — and habits, it turns out, are relatively simple to develop. As popular books like Atomic Habits have argued, regular, deliberate repetition of the same action creates a new habit. While companies seem to need to festoon their workplaces with posters and plaques listing their values, to remind their employees, habits just stick. Indeed, a recent meta-analytic review of numerous studies showed that habits are the most effective driver of behavior change.
A third important difference between values and virtues is that while values are subjective, virtues are not. Fascists, communists, terrorists, and human traffickers all have values, but most of us would not consider their values valuable. Multiple studies have shown, however, that across nations and cultures, virtues like honesty, respect, and kindness have universal appeal.
The problem is not that a company is going to mistakenly adopt the values of human traffickers, it's that it may adopt a set of values that are good in themselves, but incomplete. As a former McKinsey and Company consultant myself, I still find it very difficult to understand how some of its consultants could have gone so far wrong, helping Purdue Pharma accelerate their sales of opioids. I can't help wondering whether the issue was not so much a betrayal of values, as having, at the time, an incomplete set of values. Dedication to its core value of client service led to a dangerously myopic focus on the financial interests of Purdue to the exclusion of all else. (McKinsey's Code of Professional Conduct now includes 'to actively debate the impact of our recommendations on shareholder, customer, and societal interests.')
By contrast, in addition to having universal appeal, the four cardinal virtues of practical wisdom, justice, courage, and self-discipline, along with their associated virtues, cover the full range of excellence in human endeavors: they promote excellence in our cognitive (practical wisdom), behavioral (justice) and emotional (courage and self-discipline, addressing fears and desires, respectively) lives.
Practical wisdom is the habit of making wise decisions, and it has eight associated virtues. Four of these are for gathering the information needed to make a decision: memory and judgement for recalling the relevant facts and principles, respectively, and teachability and creativity for learning or discovering new information. One virtue, reasoning, is for analyzing the information and drawing conclusions. The final three are for ensuring successful implementation of the decision: foresight, which is the habit of setting goals; alertness, the habit of having situational awareness; and preparedness, the habit of anticipating and avoiding obstacles to implementation.
The other three cardinal virtues also have their own associated virtues. Those of justice, the habit of treating others fairly and with respect, include honesty, gratitude, and what is called commutative justice, which is the habit of fairness in exchange. Courage is the habit of moving forward despite fear, and its associated virtues include perseverance, resilience, and magnanimity. Self-discipline is the habit of only following your desires when it makes sense to do so. The virtues associated with self-discipline include restraint, diligence, humility, and a dozen others.
To help employees live the company's values, firms should identify the relevant virtues and provide opportunities to practice them. For Brindlee Mountain, the relevant virtues are:
Each value has a corresponding virtue. The difference is not just semantics. Virtues are habits, and they are more concrete, durable, and objective than values. Once values have become virtues, then the likelihood of their being lived increases dramatically. Which makes all the difference.