Guiding Principles reflect the vision, mission, brand promise, and core values, along with the firm’s capabilities. Developing and adopting Guiding Principles that all team members can live and embrace is critical to enforcing them.
As entrepreneurs first begin to develop their ideas and set their organizations in motion, very few take the time to define the foundational elements of the brand. These items allow you, as an organization to make decisions faster, to ensure that company initiatives, new products, or new directions fit the values, beliefs, and principles of the organization.
Do Companies Need Guiding Principles Anymore?
Some would argue that just as you do not need a business plan, you do not need guiding principles, a brand promise, or core values. Heck, you may not even need a vision or mission statement according to these people.
My question to you is, what are you creating? The foundational elements shape the brand; its’ beliefs, values, and principles. Companies that forgo them often scramble to find a strategy, struggle to keep consistent revenue and are not sure of their direction beyond next quarter, let alone next year.
To answer the question above, I’d say a resounding “yes!” No matter how large of an organization you have, creating and adhering to a set of guiding principles will allow you to focus and put you on a clear path towards achieving your goals.
When you perfect a small scale model of what you are working to achieve, scaling it becomes much easier and faster.
The One Question You Need to Answer
When an organization has practical guiding principles, they need only answer one question when it comes to new initiatives, direction, products, or services. The one question to be answered is:
“Does it fit our firm’s guiding principles?”
Without a clear set of principles, this question is impossible to answer. Having a set of clear principles reflect your vision, mission, strategic interests, and core values. They are the law that serves as a basis for reasoning and action, a personal code of conduct that leads and shows the way forward. Guiding Principles are a broad philosophy that guides an organization throughout in all circumstances, irrespective of changes in its strategies, goals, type of work, or top level management. In other words, by setting your organization’s guiding principles, you are ensuring that they will remain intact beyond your tenure. They become part of the brand, what it stands for, and is what helps attract top talent.
Establishing these foundational elements in the early stages of the organization will set it up for the long term.
Examples of Guiding Principles
We have discussed what guiding principles are, why they are critical to your entrepreneurial success, and how few organizations use them to their advantage. Let’s look at a few examples of guiding principles. The examples include a global industrial company and a social network to show the breadth and function guidelines have.
Mark Zuckerburg has talked a lot about being inspired by technology and the revolution of how people consume and spread information. He states,
“At Facebook, we’re inspired by technologies that have revolutionized how people spread and consume information. We often talk about inventions like the printing press and the television – by simply making communication more efficient, they led to a complete transformation of many important parts of society. They gave more people a voice. They encouraged progress. They changed the way society was organized. They brought us closer together.”
In alignment with this statement, Facebook has ten guiding principles that they live and embrace in everything it does.
- Create a Better World
- Build a Good Team
- Cultivate Fearlessness
- Take Risks
- Excite and Amaze Users
- Commit to Simplicity
- Move Fast and Break Things
- Do not Let a Competitor Get Ahead of You
- Adhere to the Process
- Create an Exciting Workplace
ITW Global Automotive
ITW Global Automotive is a global industrial organization that develops engineered products and specialty systems. Through a direct partnership with their customers, the products, and systems continuously improve. The automotive group has a guiding principle statement:
We believe the future of good business is deeply rooted in the past. By following our guiding principles designed to enhance customer focus, productivity, innovation and profitability, we are able to make continual process and product improvements for customers, while producing solid results for our shareholders. Our ability to produce commercial innovations on a continual basis for our customers is the foundation of our success.
The firm has three main guiding principles, including:
- Decentralization: placing the businesses close to the people who buy company’s products
- 80/20 Process: focusing on the most profitable products and customers
- Innovation: developing commercial innovations.
Let us help you write effective guiding principles
We’ll take an hour or two and strategize with you to develop effective principles that you can start living, embracing, and enforcing in your organization. Whether we enhance and refine your existing principles or brainstorming from scratch, this strategy session will give you immediate focus and clarity on your organization, why it exists, and how it will move forward into the future. Contact us today.
Over to You
How has your guiding principles helped you in matters where you needed to make decisions quickly?