PART 4 – GUIDE TO A BETTER BUSINESS

PRINCIPLES:
What do you and your business stand for?

THE BIG PICTURE

WHY

VISION

PRINCIPLES

A
C
T
I
O
N

PERSONAL GROWTH

STRATEGISE

EXECUTE

Success, Pupose, Freedom, Fulfilment, Peace

Imagine these two scenarios:

Scenario 1

You’ve learned that one of your staff members, Sally, recently made a serious mistake when ordering materials for an upcoming job. The client had requested a specific grade of material but Sally ordered a much lower quality grade. She attempted to cover up her mistake by hiding the invoices and delivery dockets.

Scenario 2

You notice that one of your star performers, Jim, is treating another employee rudely and unfairly, impacting on the morale of the workplace. Jim is directly responsible for much of your revenue and profit growth but it seems his ego has grown as he has risen through the ranks. You know he would quickly find a job with your competitors if he was to leave.

Scenario 1

You’ve learned that one of your staff members, Sally, recently made a serious mistake when ordering materials for an upcoming job. The client had requested a specific grade of material but Sally ordered a much lower quality grade. She attempted to cover up her mistake by hiding the invoices and delivery dockets.

Scenario 2

You notice that one of your star performers, Jim, is treating another employee rudely and unfairly, impacting on the morale of the workplace. Jim is directly responsible for much of your revenue and profit growth but it seems his ego has grown as he has risen through the ranks. You know he would quickly find a job with your competitors if he was to leave.

What actions would you take with Sally and Jim?

It largely depends on your principles.

When faced with decisions, most people inherently rely on their own personal principles or core values to decide on the right path to take.

For example, you might believe it’s absolutely fine to make a mistake. But it’s not okay to hide it or to not learn from it.

Therefore, Sally’s actions might be enough to jeopardise her employment or, at the very least, require a formal warning and closer supervision/less independence.

In the second scenario, if workplace culture and teamwork are important to you and you believe that the team must treat one another fairly and honourably, you’d be willing to risk a fallout with Jim in order to address the situation firmly.

In both of these scenarios, your own personal principles guide you.

But your staff won’t necessarily share the same principles as you; and they will also often find themselves in these sorts of decision-making situations.

Your employees need guidelines on how you want them to act with each other and the world. That’s why you need to document your business’s principles.

Why clearly define your principles?

By clearly defining your principles, you will:

  • Create less indecision – because you and your team have guidelines to work from.
  • Have an opportunity to positively influence the workplace culture in a way that improves productivity and makes it a better place to be.
  • Help employees understand what you’re looking for from them.
  • Reduce your business risks – for instance with employment law or in dealings with the public.
  • Help ensure that your standards are achieved and quality maintained.
  • Make it easier to run your business and create a place you’re proud to own.
  • Make difficult decisions easier.
  • Document your most important organisation-wide learnings, with a view to ensure the same mistakes aren’t repeated.
  • Encourage entrepreneurial behaviours among employees that, in other less trusting organisations, could be seen as risky.

Why clearly define your principles?

By clearly defining your principles, you will:

  • Create less indecision – because you and your team have guidelines to work from.
  • Have an opportunity to positively influence the workplace culture in a way that improves productivity and makes it a better place to be.
  • Help employees understand what you’re looking for from them.
  • Reduce your business risks – for instance with employment law or in dealings with the public.
  • Help ensure that your standards are achieved and quality maintained.
  • Make it easier to run your business and create a place you’re proud to own.
  • Make difficult decisions easier.
  • Document your most important organisation-wide learnings, with a view to ensure the same mistakes aren’t repeated.
  • Encourage entrepreneurial behaviours among employees that, in other less trusting organisations, could be seen as risky.

How do you go about defining your principles?

As a business owner, you get to make the rules and that’s one of the most powerful and fulfilling parts of owning a business.

Whatever you really believe is important in life. You’re able to embed this in the basic structure of your business.

Here are some guidelines for defining your principles:

  • They should be long-term focussed and will rarely change with your business strategy or type of work. This means that it’s worth taking some time to think about them. Keep in mind, however, that your principles can be a work-in-progress: start with a handful and add to the list as your business develops.
  • Once you’ve defined your first set of principles, ask yourself the following:
    • Would these principles still be valid in 100 years’ time?
    • Would you stick to these principles even if, one day, they disadvantaged you in the short term with your competitors?
    • Would you keep these principles even if the business did a 180-degree turn and ventured into completely different activities?

If you answer “yes” to these questions, you’ve defined your principles well.

  • Your principles will evolve and should be open to challenge. This doesn’t mean that anyone can change them at will but that the principles can be debated and reshaped, if they need to be made more effective.
  • Ensure that you personally follow the principles all of the time. If you appear to have compromised, they’ll be seen as worthless by your employees and then ignored.
  • Display your principles in the most appropriate place/s for your business. This might be in staff rooms or back-of-house areas. Don’t be afraid to include them in your marketing messaging.
  • Take action against employees who violate the principles, especially if it is flagrantly. You might issue a reminder, then a warning, and finally a termination. Regardless of how good they are at their job, if they’re seen by others to get away with breaking the rules, people will expect the same applies to them.
  • Aim to hire employees who share your values from the outset.
  • Learn from your mistakes and implement principles that will help prevent the mistakes reoccurring.
  • Look for guidance from your employees. Encourage debate amongst your staff on what your principles should be – empowering them to help shape the business.

Now, what does a good set of principles look like?

Example: A real-world set of principles for a small business to follow

Following is an excerpt of a set of principles adopted by Ray Dalio of Bridgewater Capital, the most successful hedge fund in history.

We believe their use of principles is quite brilliant and implore you to review them for anything that resonates with you.

Healthy work principles:

  • Make your passion and your work one and the same and do it with people you want to be with.

Principles for developing the right workplace culture:

  • Have integrity and demand it of others.
  • Create an environment in which everyone has the right to understand what makes sense and no one has the right to hold a critical opinion without speaking up.
  • Create a culture in which it is okay to make mistakes and unacceptable not to learn from them.
  • Know what types of mistakes are acceptable and what types are unacceptable, and don’t allow the people who work for you to make the unacceptable ones.
  • Making suggestions and questioning are not the same as criticising, so don’t treat them as if they are.
  • Find the most believable people possible who disagree with you and try to understand their reasoning.
  • Don’t pay as much attention to people’s conclusions as to the reasoning that led them to their conclusions.
  • Recognise that everyone has the right and responsibility to try to make sense of important things.
  • Make sure people don’t confuse the right to complain, give advice, and openly debate with the right to make decisions.
  • Don’t leave important conflicts unresolved.
  • Once a decision is made, everyone should get behind it even though individuals may still disagree.

Principles that create a winning team:

  • Remember that WHO you hire is more important than WHAT they do/the role they fill.
  • Recognise that the most important decision for you to make is who you choose as your Responsible Parties (i.e., the people who will be responsible for an outcome or a process)
  • Know that the ultimate Responsible Party will be the person who bears the consequences of what is done.
  • Hire right, because the penalties for hiring wrong are huge.
  • Remember that people are built very differently and that different ways of seeing and thinking make people suitable for different jobs.
  • Don’t hire people just to fit the first job they will do; hire people you want to share your life with.
  • When considering compensation, provide both stability and opportunity.
  • Remember that in great partnerships, consideration and generosity are more important than money.
  • Great people are hard to find so make sure you think about how to keep them.
  • Don’t lower the bar.

Principles to build and evolve your machine:

  • Understand the difference between managing, micromanaging, and not managing.
  • Clearly assign responsibilities.
  • Think like an owner and expect the people you work with to do the same.
  • Don’t be afraid to fix the difficult things.
  • Keep your strategic vision the same while making appropriate tactical changes as circumstances dictate.
  • Have good controls so that you are not exposed to the dishonesty of others.
  • Do what you set out to do.
  • Work for goals that you and your organisation are excited about and think about how your tasks connect to those goals.
  • Recognise that everyone has too much to do.
  • Use checklists.
  • Allow time for rest and renovation.

If you’d like to see the complete list of Bridgewater’s principles, just let us know.

Example: Some of Eagle Financial’s principles for you to see how they can be made specific to your circumstances

  • We’re all on the same level
  • Give the benefit of the doubt (Fundamental Attribution Error)
  • No sanity check = insanity
  • Five elements of an ideal Eagle team player (Humble, Hungry, People smarts, Ability to learn, Customer service focus)
  • No single client is worth risking it all for

How do you go about defining your principles?

As a business owner, you get to make the rules and that’s one of the most powerful and fulfilling parts of owning a business.

Whatever you really believe is important in life. You’re able to embed this in the basic structure of your business.

Here are some guidelines for defining your principles:

  • They should be long-term focussed and will rarely change with your business strategy or type of work. This means that it’s worth taking some time to think about them. Keep in mind, however, that your principles can be a work-in-progress: start with a handful and add to the list as your business develops.
  • Once you’ve defined your first set of principles, ask yourself the following:
    • Would these principles still be valid in 100 years’ time?
    • Would you stick to these principles even if, one day, they disadvantaged you in the short term with your competitors?
    • Would you keep these principles even if the business did a 180-degree turn and ventured into completely different activities?

If you answer “yes” to these questions, you’ve defined your principles well.

  • Your principles will evolve and should be open to challenge. This doesn’t mean that anyone can change them at will but that the principles can be debated and reshaped, if they need to be made more effective.
  • Ensure that you personally follow the principles all of the time. If you appear to have compromised, they’ll be seen as worthless by your employees and then ignored.
  • Display your principles in the most appropriate place/s for your business. This might be in staff rooms or back-of-house areas. Don’t be afraid to include them in your marketing messaging.
  • Take action against employees who violate the principles, especially if it is flagrantly. You might issue a reminder, then a warning, and finally a termination. Regardless of how good they are at their job, if they’re seen by others to get away with breaking the rules, people will expect the same applies to them.
  • Aim to hire employees who share your values from the outset.
  • Learn from your mistakes and implement principles that will help prevent the mistakes reoccurring.
  • Look for guidance from your employees. Encourage debate amongst your staff on what your principles should be – empowering them to help shape the business.

Now, what does a good set of principles look like?

Example: A real-world set of principles for a small business to follow

Following is an excerpt of a set of principles adopted by Ray Dalio of Bridgewater Capital, the most successful hedge fund in history.

We believe their use of principles is quite brilliant and implore you to review them for anything that resonates with you.

Healthy work principles:

  • Make your passion and your work one and the same and do it with people you want to be with.

Principles for developing the right workplace culture:

  • Have integrity and demand it of others.
  • Create an environment in which everyone has the right to understand what makes sense and no one has the right to hold a critical opinion without speaking up.
  • Create a culture in which it is okay to make mistakes and unacceptable not to learn from them.
  • Know what types of mistakes are acceptable and what types are unacceptable, and don’t allow the people who work for you to make the unacceptable ones.
  • Making suggestions and questioning are not the same as criticising, so don’t treat them as if they are.
  • Find the most believable people possible who disagree with you and try to understand their reasoning.
  • Don’t pay as much attention to people’s conclusions as to the reasoning that led them to their conclusions.
  • Recognise that everyone has the right and responsibility to try to make sense of important things.
  • Make sure people don’t confuse the right to complain, give advice, and openly debate with the right to make decisions.
  • Don’t leave important conflicts unresolved.
  • Once a decision is made, everyone should get behind it even though individuals may still disagree.

Principles that create a winning team:

  • Remember that WHO you hire is more important than WHAT they do/the role they fill.
  • Recognise that the most important decision for you to make is who you choose as your Responsible Parties (i.e., the people who will be responsible for an outcome or a process)
  • Know that the ultimate Responsible Party will be the person who bears the consequences of what is done.
  • Hire right, because the penalties for hiring wrong are huge.
  • Remember that people are built very differently and that different ways of seeing and thinking make people suitable for different jobs.
  • Don’t hire people just to fit the first job they will do; hire people you want to share your life with.
  • When considering compensation, provide both stability and opportunity.
  • Remember that in great partnerships, consideration and generosity are more important than money.
  • Great people are hard to find so make sure you think about how to keep them.
  • Don’t lower the bar.

Principles to build and evolve your machine:

  • Understand the difference between managing, micromanaging, and not managing.
  • Clearly assign responsibilities.
  • Think like an owner and expect the people you work with to do the same.
  • Don’t be afraid to fix the difficult things.
  • Keep your strategic vision the same while making appropriate tactical changes as circumstances dictate.
  • Have good controls so that you are not exposed to the dishonesty of others.
  • Do what you set out to do.
  • Work for goals that you and your organisation are excited about and think about how your tasks connect to those goals.
  • Recognise that everyone has too much to do.
  • Use checklists.
  • Allow time for rest and renovation.

If you’d like to see the complete list of Bridgewater’s principles, just let us know.

Example: Some of Eagle Financial’s principles for you to see how they can be made specific to your circumstances

  • We’re all on the same level
  • Give the benefit of the doubt (Fundamental Attribution Error)
  • No sanity check = insanity
  • Five elements of an ideal Eagle team player (Humble, Hungry, People smarts, Ability to learn, Customer service focus)
  • No single client is worth risking it all for
GUIDE TO A BETTER BUSINESS (PART 1-7)
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By |2022-03-07T23:46:50+00:00April 10th, 2021|0 Comments

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