What are the most valuable things in your life?

You might say your partner or children, family members or friends, and that’s great. Some people remember an old watch their grandfather passed down. There’s also your home and car.

Now: What are your values?

This question is different. Values are not tangible, and it may have been a while since you last thought about what’s important to you.

Decide your values before they are tested in a crisis

David Gergen was a speechwriter for Richard Nixon when the Watergate scandal broke. At first he was assured of the president’s innocence – and he wanted to believe in his leader. After all, Gergen was young and, as he describes himself, attracted to the power and prestige of a White House job. But the president was not innocent and, eventually, the story inside the administration changed. As Watergate swept the nation, Gergen considered resigning but worried about looking like “a rat leaving a sinking ship.” Since he wanted another White House job in the future, he accepted the responsibility when Nixon tasked him with writing a resignation speech.[1]

Gergen watched his first White House job come to an end when his boss flew away on Marine One, disgraced. For a long time the phone did not ring. Only a few close friends stayed in touch. Through this challenging time, Gergen learned a valuable lesson.

“When you’re in trouble and all your defenses get stripped away, you realize what matters and who matters,” he said.

What matters? If everything else falls away, all you are left with are the people who care about you and who you are – the values that define you.

Gergen may have been too young in the early 1970s to know when to leave a faltering leader, but his experience proves that a person should know what to stand for long before a crisis begins. It’s critical that you think about your values, write them down and review them often, so the right course of action is clear when two paths conflict and you are forced to choose.

As I like to say, you have to decide before it’s time to decide. That way, when it’s time to decide, you’ll have already decided.

Your values establish your principles and boundaries

In addition to your values, you have leadership principles (actionable expression of your values) and ethical boundaries (how your values limit your behavior). Both leadership principles and ethical boundaries govern how you interact with people. They define what you will and will not do on a daily basis. You can see how it’s impossible to set leadership principles and ethical boundaries until you understand your values.

Narayana Murthy founded Infosys Technologies in 1982 in India. The information technology outsourcing company came of age in a time of corruption. Bribes were a business-as-usual. But Murthy refused to pay bribes. He founded his company on his values and the values of his colleagues, and he believed that paying bribes at the beginning of the company’s existence would set a precedent for years to come. Murthy wanted his growth as a leader and as a businessman to be authentic. Eventually the corrupt individuals stopped asking him to pay. But what makes people like Murthy stand by their ethical boundaries?

Murthy’s father was an ethical man and the teachings of Mahatma Gandhi were important to his family. These core values permeated his life and eventually his business. As you pursue your True North, you will learn that translating your ethical boundaries into daily practice is the duty of a great leader.

Best Buy’s Kathleen Edmond created a blog where employees could review company policy about standards of ethics. In a review of this practice, the Harvard Business Review points out how much social norms influence behavior. A negative standard can spread if you allow it to become the norm, but if you set a firm, positive standard, if you begin in a positive place as Murthy did, people may follow for fear of breaking rank.

The Harvard Business Review also points out some nuances involved in setting ethical standards. Are you pushing employees to perform or are you pushing employees to perform in the correct way? Do you stress economic success or ethical practices? It seems when people focus on the way they do business rather than how much business they do, good things happen.

A great leader establishes a company’s values early on as a matter of proactive prevention. Once something negative happens, it is difficult to break the cycle and reestablish value-based principles. For example, when the Watergate scandal broke it was far too late for the president to go back and define appropriate ethical boundaries for his administration.

When all else falls away, your values remain

In life, you have people and possessions you value, and you have your values: the pillars of your character that define who you are and what you believe. While you grow as an authentic leader and pursue your True North, any number of forces will try to pull you off course. Pressure can cause people to forget what they believe. However, if you are able to draw on your values when times get tough, you will have the courage and discipline to stay on course. You must decide before it’s time to decide. That way, when it’s time to decide, you’ll have already decided.

Practice exercise: Values

One a sheet of paper, write down your values. Think about what adjectives define your character. After you write down ten or twenty values that guide you as a leader, rank them in order of importance. Use this definitive list to make decisions about your future and the wellbeing of those you lead.

Learn more about this topic in Chapter 5: Values

[1] Discover Your True North, Chapter 5: Values, p. 104