Today’s leaders face increasingly complex decisions and moral puzzles, often without a clear compass to navigate them. Many are weighing painful cost-cutting measures due to economic uncertainty and are experiencing increasing pressure to comment on social or political issues entirely unrelated to their businesses. At the same time, they are grappling with dramatic disruptions from artificial intelligence and destabilizing global tensions.

In high-stakes situations where there’s no clear playbook, leaders regularly face tough choices with steep trade-offs. In these moments, personal core values can be a powerful, underutilized guide for making decisions and executing them.

What Are Core Values?

Core values are your closely held, non-negotiable principles. They form the backbone of your authentic leadership. These values are distinct from company values, as each leader has their own personal principles even if they cannot clearly articulate them today.

When the topic of core values comes up, many people default to short, one-word virtues such as “family,” “honesty,” and “integrity.” However, one-word values lack the specificity to serve their most important function: guiding decision-making across different facets of life and work. For example, the common core value of “family” would not offer much help to a leader making a business decision.

However, someone with a stated core value of “family” likely has a more universal underlying principle that guides how they show up for family, friends, and colleagues. For example, one person may care deeply about always being present for their family, never missing a dinner, recital, or game, and has the value “Always Show Up.” Another person may care deeply about building trust with their partner and family, and has a value called “Build Trusting Relationships.” These short, action-oriented phrases point to specific behaviors that can be displayed in all areas of life.

Personal core values can profoundly shape a leader’s behavior and decisions, creating ripple effects throughout entire teams and organizations. Research reveals that an authentic leadership style, rooted in core values, drives better performance, trust, and decision-making. Authentic, values-rooted leadership is significantly correlated with superior workplace performance and a stronger bond between employees and the organization. Leaders who reflected on core values during a stressful situation, such as making a major decision about workforce reductions, or delivering an important speech or message to an organization, showed a significant reduction in neuroendocrine and psychological stress responses. And in an MIT Sloan Management Review article, two academics show how leaders make better decisions when they’re grounded in their values.

Effective core values are action-oriented, unique to you, and applicable in all areas of life. They also serve as part of a vital decision-making rubric in leadership.

Making Values-Based Leadership Decisions

Values are most effective in justifying decisions that are arduous in the short term but strategically sound in the long term. Consider this example: In 2018, Ed Stack, former CEO of Dick’s Sporting Goods (DSG) and son of DSG founder Richard “Dick” Stack, learned that DSG had sold a shotgun to Nikolas Cruz, who later killed 17 students and staff at Marjory Stoneman Douglas High School in Parkland, Florida. (The gun Cruz purchased from DSG was not the one used in the shooting, though the company noted ”it could have been.”) In response, DSG stopped selling firearms to people under the age of 21 and removed assault weapons and high-capacity magazines from its stores. DSG also destroyed $5 million worth of firearms in its inventory.

In an interview with Business Insider, Stack explained the decision not with a company value, but with a personal value from his father: “You have to do right by and be involved in the community.”

This was hardly a risk-free decision, especially given the financial fallout: a Harvard Business School case study reported that DSG’s internal modeling warned Stack’s choice could trigger a financial loss of up to $250 million. But Stack stood by his personal values, and DSG weathered the fallout. In fact, the company’s stock price rose 9.4% in the month following the announcement and, at the time of this writing, has grown by nearly 600% since 2018. While this growth isn’t solely due to Stack’s values-driven decision, it illustrates that leaders can prioritize values over short-term profits and still position companies for strong long-term outcomes.

Core values are also crucial to the “how” of difficult decisions. In 2020, when travel bans during the Covid-19 pandemic posed an existential threat to Airbnb, co-founder and CEO Brian Chesky decided to cut 25% of Airbnb’s workforce.

In discussing the decision in an interview with Adam Grant, Chesky talked about his own values of treating others with empathy and communicating with honesty and transparency. While many CEOs execute layoffs messily and impersonally, Chesky wrote an open-hearted letter to his company, explaining why the layoff occurred, how it was executed, and what benefits departing employees would receive. Chesky even went a step further, articulating the guiding principles that Airbnb’s leadership would use to manage the pandemic’s dire threat to the business.

Leaders rarely inspire confidence when they justify tough decisions, especially job cuts, by citing strategy or the bottom line alone. But when they clearly connect decisions to their values, they build trust, even with those who may disagree with the decision.

Finding Your Core Values

If you believe that core values could be the missing piece to your leadership effectiveness, but aren’t certain what yours are, start the discovery process with these six questions:

• In what non-work environments are you highly engaged? Think of when you are most energized in life and barely notice time passing. It might be during certain activities such as volunteering to run a food drive or participating in disaster relief. Or you could think more generally, remembering how much you love situations where you bring people together to solve a problem.
• In what professional roles or jobs did you do your best work? Recall the circumstances when you felt most engaged professionally. What were you working on at the time, and how would you describe the work environment, culture, or leadership? For example, you might think back to a customer success role that required you to build strong relationships with incoming clients and recall how much you enjoy building trust with people.
• What help, advice, or qualities do others come to you for? For example, you might note that people come to you for help navigating sensitive situations that require discretion and trust.
• What would you want said about you in your eulogy? What impact do you want to make in the lives of people closest to you? For example, you might hope for people to remember that you were always ready to help, or that you were an outstanding confidant who never betrayed people’s trust.
• When were you disengaged in a personal or professional setting? Reflecting on the qualities or behaviors you find frustrating and hurtful can offer clues to your core values, which are often the opposite of those things. For this question, you might think back to a boss who micromanaged you, or having to work in low-trust environments.
• What qualities in other people do you struggle with the most? Likewise, imagining a person with qualities you simply cannot stand clarifies what your non-negotiable values may be. You might imagine a person who is extremely selfish or regularly talks behind other people’s backs. These are qualities that should be painful for you to imagine.

Answer these six questions on six separate sheets of paper—one answer per sheet. Then search your responses for common themes. For example, a person whose responses look like the examples above could quickly identify themes of generosity, helping others, and building trust. These themes are the foundation of your core values.

Once you have grouped together three to five themes like these, label each one with a short phrase, such as “Show Up for Others,” “Be Kind to Others,” or “Build Trusting Relationships.” Then, for each these themes and phrases, ask these four key questions, which I collectively refer to as “The Core Validator.” The first two questions help you evaluate whether the theme is a non-negotiable principle that you hold dear, and the third and fourth questions validate whether the phrase is specific and actionable enough to guide your behavior.

Core Validator Questions

• Could you use it to make a decision, past or present? For example, a leader with the core value of Build Trusting Relationships would best handle a layoff announcement by being fully transparent with the team about how many people were affected and why, in order to build trust with their team.
• When you think of the inverse, does it strike a nerve? For example, someone whose value is Build Trusting Relationships probably cannot stand to be around someone who can’t keep a secret and regularly breaks people’s trust.
• Is it a phrase, rather than just one word? Someone with the example responses above might gravitate toward a one-word value of “trust” or “relationships”. But as noted in the family example in the beginning, there is likely a deeper root of what this means.
• Can you objectively rate yourself on whether you’ve followed the value? For example, a person whose value is Build Trusting Relationships can objectively evaluate whether they have been building trust in their relationships by considering whether they have been honest with friends, family, and colleagues, following through on their commitments, or protecting sensitive information.

If you have a phrase and theme that prompts an affirmative answer to all four of these questions, you have an actionable core value that can inform your leadership style.

To use the example of Building Trusting Relationships one last time: if a leader with this value is trying to decide how to communicate subpar financial results to their company, they might be choosing between being upbeat and hiding the bad news from their team, or communicating honestly about the results and explaining what leadership is doing to turn things around. This leader would want to choose the latter course, as it will feel authentic to them.

Few things are more painful for a leader than making tough decisions without a clear moral compass. You can’t rely on values if you have not defined them or if they are expressed as one-word terms with unclear meanings. In the long run, values deliver better returns than shortcuts, spin, virtue signaling, and corporate platitudes ever could. Most importantly, they foster trust that compounds over time, strengthening both your own conviction and the confidence others have in you.