Bob Dabic remembers that in the old days, it wasn't much fun to manage his workforce. "I got frustrated with all the little fires and personality problems," recalls the president of Dabico, a 50-employee airport equipment manufacturer.

Today, Dabic says, his job as company president is much easier, because his company, which is based in Costa Mesa, Calif., has articulated its values and outlined the type of behavior it exemplifies. With clearly defined corporate values, Dabic finds that conflicts within the company occur less frequently and are more easily resolved. "It prevents problems, and when problems occur, you get an understanding much more quickly," he says. "We now all kind of know what the agenda is."

One of the company's stated values, for example, is "teamwork." If one team refuses to help another team, someone might point out that such behavior doesn't fit the company's values. "The beauty of it is the accountability to which everyone is held," Dabic says. "It has revolutionized the management of people."

That revolution didn't come easily, however. Dabic says he began the transition to value-based leadership in the early 1990s. The whole management team developed a company vision statement, and then Dabic himself articulated the company's five overarching "Vision Values" -- making customers happy, satisfying employees, helping others, growing net profits, and exhibiting teamwork.

While Dabic came up with those values for his company, he left it to the staff to develop detailed plans for implementing them. As he explains it, each general value also includes three bullet points detailing how the value will be put into practice -- and the staff creates those bullet points. For example, to implement the Dabico value of helping others, the company has started allowing employees two hours a week to volunteer in the community on company time.

In addition to its overall Vision Values, the company also has what Dabic calls operational or cultural values, which the management team developed or adapted from existing company policy. Operational values include things such as the company's quality policy and its emphasis on rapid responsiveness to customer needs.

Dabic credits the emphasis on company values with helping to double sales between 1993 and 1998 -- and more than doubling profits. He admits the process was very difficult, but he believes it was well worth the struggle. "It's a three- to five-year plan that's a very painful transition," Dabic says. But once that transition is over, "you'll never go back." Dabic compares his management-by-values system to something "approaching cruise control" for a business. "It guides people in helping them to do more of the right things more of the time," Dabic observes.