How Can Core Values Drive Innovation in Startups?

By Dr. Bilal Ahmad Bhat
Thought Leader | Founder, BAB Group of Companies | Author, 28COE Core Values – Edition 1

Innovation is the heartbeat of every successful startup. But while many focus on technology, product development, and funding, few realize that the real foundation of sustainable innovation lies in core values. As someone who has mentored hundreds of startups across the globe, led global chambers, and coached founders through the 90 Day Master of Business Entrepreneurship (90 DAY MBE) program, I’ve seen firsthand how clearly defined core values can ignite innovation and drive transformation in early-stage businesses.

Why Core Values Are the Innovation Engine of Startups

Startups exist in a volatile, uncertain, complex, and ambiguous (VUCA) environment. In such conditions, agility and creativity are non-negotiable. But what keeps a startup grounded while pushing boundaries? The answer is: Core Values.

Core values are not just statements on a wall. They are guiding principles that influence every decision, behavior, strategy, and risk a startup undertakes. When startups define and practice these values from day one, they create a culture that empowers innovation.

“It’s a basic foundation for each leader. It should be defined and practiced at first hand,”
— Dr. Bilal Ahmad Bhat

1. Core Values Build a Culture of Psychological Safety

Startups that prioritize honesty, transparency, and respect encourage team members to voice their ideas without fear of judgment. This openness is critical to innovation. Google’s research on high-performing teams (Project Aristotle) found psychological safety to be the top determinant of innovative output. When your core values celebrate openness and inclusivity, creativity flows naturally.

2. Core Values Shape Decision-Making Under Pressure

Startups often make tough choices: pivot or persist, scale or pause, hire or delay. Without values, decisions become reactive. With values like integrity, courage, and customer-centricity, decisions are made with long-term vision and team alignment. This speeds up innovation cycles because it eliminates indecision and misalignment.

“I have witnessed driven innovation in startups while they define their core values,”
— Dr. Bilal Ahmad Bhat

3. Values Empower Autonomous Teams

In the early days, startup teams wear many hats. With clearly communicated values like ownership, accountability, and excellence, team members feel empowered to take initiative without waiting for micromanagement. This autonomy is a catalyst for rapid problem-solving and bold experimentation.

4. Values Create Stronger Brand Identity & Customer Trust

Innovation isn’t limited to internal operations. It also shows up in how a brand communicates, markets, and serves its audience. Values like empathy, community, and authenticity shape how startups connect with customers and adapt to market feedback. The stronger the alignment with audience values, the faster a product evolves and stays relevant.

5. Values Reduce Friction and Enhance Focus

Startups often struggle with focus due to endless opportunities. Core values like discipline, impact, or simplicity act as filters. They help founders and teams prioritize what matters most, eliminating distractions and aligning all innovation efforts to a unified mission.

Real-World Case: Startups in the 90 DAY MBE Program

Through the 90 DAY MBE – Master of Business Entrepreneurship framework, I have mentored startups across various domains—from healthtech in Africa to SaaS in Southeast Asia. One of the first things I ask founders to do is define and live their core values. Startups that follow this approach show:

• Faster product-market fit
• Greater retention of top talent
• Stronger investor trust and market positioning
• Improved resilience during crises

These aren’t just outcomes of smart strategy; they are manifestations of a values-led culture.

The Global Perspective

In my leadership role across global chambers, I’ve interacted with innovation-driven ecosystems in over 30 countries. The most resilient and impactful startups—whether in Berlin, Bangalore, or Baku—are those that view core values not as HR jargon, but as strategic assets.

In this age of AI, rapid disruption, and decentralized teams, core values are your most human, most reliable compass for innovation.

Start with These Innovation-Focused Core Values:

If you’re wondering where to start, consider integrating these into your startup DNA:

• Curiosity – Explore the unknown without fear
• Collaboration – Innovate together, not in silos
• Agility – Adapt quickly without losing integrity
• Courage – Take bold risks with purpose
• Resilience – Bounce back with learning, not ego

Each of these is not only a word—it’s a way of working, thinking, and innovating.

Final Thought

Startups that neglect defining their core values will eventually struggle to scale. But those who embed them early create a magnetic culture that fuels creativity, clarity, and competitive advantage.

Innovation is not just about ideas. It’s about values that give direction to those ideas, empower people to act on them, and build legacies that last.

“The impact with core values is great and amazing. As I witness, my own organizations are always shaping and deeply impactful.”
— Dr. Bilal Ahmad Bhat