This post is about the way we are and the way we are going to be. It’s the fourth part of the Values to Vision to Reality process and speaks to just exactly HOW we do things in our business now and in the future. These are your Operating Principles, Breakthrough Strategies, Pivotal Strategies–there are many terms. They are long-term and serve as guard rails to guide the way you actually go about achieving your Vision and fulfilling your Purpose?
In some ways your Operating Principles are like your Core Values. Both are aspirational and both are idealistic. In other ways they are quite different. The key differences are that Operating Principles are much more concrete. They are much more an expression of your actual business. They are long-term but not unchanging. Operating Principles can be updated based on real-time business factors and market conditions.
Think of it this way. You can be very clear on your values, vision and purpose and still have no clue how you are going to operate your company. Here are the kinds of questions that Operating Principles answer:
- Are you going to be internet based? Product or Service?
- Are you going to be the price leader? The innovation leader? The quality or service leader?
- Are you going to build a highly accountable but empowered organization or limit decision making to senior management?
- How are you going to go to market? Acquire customers?
- How will you sell your product/service? Feet on the street? Point of Sale advertising?
- Where will you operate? Domestic? International? Both?
- In what ways will you differentiate? What is your competitive advantage?
- What role will technology play in your company? Are you a technology company or a company accelerated by technology?
- What is your service philosophy?
- What will the work environment be? Formal? Casual? Structured? Loose? Centralized? Highly distributed?
There a dozens of questions to think through as you develop your unique combination of Operating Principles. It will take a while to figure out the definition of how your company will run compared to another. It’s worth it, though. Having a clear Operating Philosophy will make many decisions easy and it will help your team understand more of who they are, what they do and how they do it!
Let me give you a few real life examples. One company I’ve known refused to let their teams see the company P&L on the premise that if folks knew how much money they actually made the people leave and go start competitive companies. Another company is quite the opposite; they want everyone in the organization to know the numbers and the results so that they are equipped to make good business decisions at the most local level possible. Or take a well known shoe distributor. Their service philosophy is such that if you don’t like the shoes they ship or they don’t fit well then they, not you, will pay the shipping both ways. Contrast that with companies that make returns a nightmare and act as if you are trying to cheat them. All of these “policies” are actually the fruit of Operating Principles–some articulated and some not but all, nonetheless, real.
So the exercise is to make a list of all the questions that you need to answer regarding your business. Think internally. Think externally. Think financially. Think customer. Think employees. Once the list is made then set about answering each question; some may not be able to be answered right now. From your answers distill 4-6 fundamental statements that make you say, “Yeah! That’s how I want my company to run.” Then capture them as Operating Principles and share with your teammates.