Developing guiding principles is one of the more important pieces of work done by an organization designing itself for high performance.
Values and Principles are used to drive decision-making in your business, and in consequence they shape your culture. Your culture drives business performance. If you doubt that statement - ever wondered why some organizations are better than others?
It's because of the culture.
What creates a culture? The way people behave! Having the best technology in the world doesn't necessarily drive high performance.
Lets take a quick look at why you should take the time to develop principles and then move on to how to develop them.
Guiding Principles are critical for long-term consistency.
You may not refer to your guiding principles daily, but they are useful to ensure that the long-term culture of the business is not eroded by decisions made for short-term expediency.
As well, as time goes by people come and go from the organization, and the original vision for how the business would conduct itself can often get lost.
Example of how Guiding Principles can stop poor Organizational Choices that have a negative impact on Culture
When I was working at Colgate as People & Culture Leader, we once had a team leader join us, some years after start-up. He was finding it very frustrating because of the amount of time he needed to spend involving his team members in making decisions.
One day he jokingly (but 1/2 seriously) said to me: "Let's stop all this employee involvement. It takes too long. It's far quicker just to tell people what to do".
Even though I empathized with him, I was able to have a discussion with him that went something like this:
As you know, we believe our Business Results are driven by our Values, and one of our Values is Flexibility. We chose this Value because we know that it powers the behaviors, that enable us to more rapidly and easily achieve our goals. Some of the guiding principles around Flexibility that we identified were:
People are Flexible when they:
- Are involved in decision-making that impacts on them
- Understand and appreciate the reason for change
- Are involved in planning and organizing change
If we were to stop involving people in the decision-making process, and keeping information up to them, we may risk losing the value of Flexibility. In the short term we may not notice a difference, other than decisions get made faster, but over the long term we'll definitely have team members who are less engaged, committed and involved with the business.
I probably wasn't quite as articulate or formal as that -- but that was the intent of the conversation!
But also took heat out of the conversation, because we traced it back to something that was solid ... our organizational design choices ... not just my opinion!
With the ability to refer back to guiding principles, when a significant design choice is proposed - such as stopping employee involvement - you are able to ensure that short-term and convenient choices, don't have a long-term negative impact on the outcomes the business wants to achieve.
And the interesting aside to the story above is that this Team Leader went on to become a very senior Leader within the Colgate world -- and if he hadn't fully 'got' the importance of thinking through design choices and understanding the power of principles in the effective running of the business, he may well have, unwittingly, changed the culture for entire divisions.
Here's an example, from history, of how managers didn't think through the consequences of a design choice:
When industrial organizations first came into being, specialization was the name of the game. A person was expected to do only one task and get very good at that task.
This design choice lead to one-man-one-job thinking that was the hallmark of organizations throughout the latter half of last century. And which meant we ended up with demarcation and inflexibility in the workplace.
(I recall working in an organization in the late 1980's that had 37 unions on site - all bickering with each other over who had rights to do what. In fact we lost 25% of available workdays to strike action because of the unions fighting amongst themselves over who had the rights to perform particular tasks!).
If instead, people had stopped to think about the long-term implications of the choices they were making and used Values and Guiding Principles... we may well have avoided 50+ years of union bickering over who could do what job!
The point is, that before members of your organization make any organizational design choices, they must recognize the principles behind those choices. That way, months or years later, the design choices people are making will be based on carefully articulated principles, or guidelines that fit the business strategy and long-term outcomes desired by the organization - not just meet short-term expediency.
So let's go to part two of this article and get the four steps for developing guiding principles.
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