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Chapter 3 | Principles Guidebook

Design & Use Principles

Learn how to design decision principles that express your goals and values.

Discover how to identify “forks in the road,” develop principles to direct the choice, and test and refine the results.

Look for opportunities

Identify where Principles are needed and where they already exist.

To find opportunities for principles, look for dilemmas: choices between competing values or goals. Dilemmas often sound something like this:

Should we focus on total market share or profitability?
…local or global?
…short-term or long-term?
…customers or investors?
…fast or slow?
…incremental or exponential?

And the answers begin: Well, it depends…

Find existing principles

Another place to start is by collecting and refining existing decision-making guidance throughout the organization.

Sometimes informal precepts are passed along as part of the culture. Other times they get codified, as Reed Hastings did for Netflix.

Exercise

Find existing principles

Find any existing Decision Principles in your organization today. On the left, list existing sources, such as employee handbooks, training documents, brand guidelines and similar documents. On the right, list specific guidance for decision-making.

What are some examples of goals, strategies, policies and procedures in your organization today?  
Are there any existing examples of Decision Principles? What are they?

Exercise

Where are Principles needed?

Use the questions below to identify places in your organization where Decision Principles may be needed. Reflect on and discuss these questions with your team. Use this worksheet to record your thoughts.

Where in your organization are you wasting time or experiencing stress because the right decisions aren’t being made at the right time?

Where do people not know which way to decide? Where are there often exceptions?

Where are there decisions that don’t fall cleanly within responsibilities? Where is it not clear who has authority to make the call?

Where are decisions being escalated even though the people on the ground know what to do? Where do decisions not get delegated that should be?

Where do decisions get delegated and then taken back?

Tips for designing principles

Focus on principles, not policies.

Decision Principles shouldn’t be so specific that they tell people what to do, or so broad that they won't help people make the right decision. What information do you need from them, and what information do they need from you, in order to create rapid, independent and effective action?

Hold a summit.

One way to bring these pieces together rapidly is to convene a summit of stakeholders as a kind of “constitutional convention.” After all, a constitution is essentially Principles for democracy, the enduring guidelines by which to govern a nation. The Agile software movement began with just such a gathering.

Involve your broader team.

When the military rewrote its doctrine on counter-insurgency, it brought together a cross-functional team of soldiers, civilians, experts and leaders while gathering feedback from hundreds of front-line personnel. When IBM rewrote its values, it engaged 50,000 employees around the world.

How to design principles

1. Find the fork

2. Develop a principle to direct the choice

3. Test and refine

1. Find the fork

A “fork in the road” is a decision that requires Decision Principles, because either path could be viable. You can imagine reasons to take either one, depending on circumstances, and you can’t know in advance what the circumstances will be.

“Be safe” isn’t a Principle because it’s so vague that there’s no way to base a decision on it, but also because its alternative, “Risk injury,” isn’t reasonable for most people.

One large company developed a Principle that called for employees to “be all in.” That may seem like a value at first, but you can tell that it’s a decision principle because there’s a viable alternative: “Change incrementally to hedge your bets.” And, in fact, there are situations in which it makes sense to do just that.

If you’re developing Principles around the value of collaboration, your choice isn’t whether or not to collaborate; it’s how to handle the inevitable disagreements that come up between people who are collaborating.

Similarly, if you’re developing Principles around the value of innovation, you’ve already chosen to take risks; now you need help deciding which particular risks are worth taking and how much risk to take at any given moment.

2. Develop a principle to direct the choice

This step bridges the gap between your values and goals and the Decision Principles that helps you achieve them.

For example, let’s say your organization has a value of maintaining focus and agility. To understand how that might translate into Decision Principles, think of how you would coach a tennis player to stay focused and agile while returning a serve: stay on your toes, keep your eye on the other player, be prepared to let the serve go by, etc.

Here are three ways to turn a goal or value into a decision principle:

  1. Start with an existing value statement and make it more specific. “Be customer-centric” is a good value, but it doesn’t tell you how to make choices that result in customer-centricity. To create guidelines that direct your choices, make it more specific—like Amazon’s “Start from the customer and work backwards” or “Consider competitors but obsess about customers.”
  2. Start with an existing rule or policy that’s too rigid, and loosen it to provide more autonomy based on context. “All processes must be open”
    is a rigid rule. “Default to an open process unless there’s a good reason not to, in which case a closed process is OK” leaves room for judgment at the fork in the road.
  3. Look for places where no policy or rule exists to guide decisions, and base Decision Principles on general values. This is how IBM approached the challenge of creating social media guidelines for employees. The fork in the road was “How do we manage the way employees present themselves in public so that it reflects well (or at least not poorly) on the company?”

IBM’s Principles give employees autonomy to behave as they wish on social media as long as they stay within the boundaries of the organization’s corporate values. In an example of nested Principles, the first item in IBM’s social media policy is “Know and follow IBM's Business Conduct Guidelines.”

3. Test and refine

A new Decision Principle is successful if it meets these criteria:

It’s neither too broad nor too specific. It doesn’t lapse into vague value statements that give employees too much autonomy, but it also doesn’t overprescribe what to do to the point of eliminating all flexibility.

It points out available, viable options and leaves the choice between them open. For example, IBM could have created a rule requiring all of its employees to announce their IBM affiliation every time they post anything anywhere online. However, in some situations, that’s neither relevant nor appropriate, so IBM made Decision Principles that allows employees to decide whether to identify their employer.

It’s phrased in a way that is easy to remember and fits your corporate culture. Ideally, decision principles are conversational phrases that people can recall and use in the moment, rather than having to look them up every time they have to make a decision.

IBM’s social media Decision Principles includes “Be yourself,” “Try to add value,” and “Respect your audience.” Another company turned its value of being ethical into the principle “Would your mother approve?”

Exercise

Design Decision Principles

Use this worksheet to guide you through the process of developing Decision Principles. For each situation, begin by identifying the dilemma and the desired outcome, then work on articulating the principle. Add information about context to clarify when and why to use the principle.

Evolve principles

Decision Principles aren't etched in stone—they’re meant to evolve.

From the start, you need to let people know that this is an experimental process, and there will be hits and misses.

If people are slow to use principles, it may be because they’re slow to trust that they’re now empowered to make decisions. Be sure not to get impatient and “whiplash” them by taking decision authority back.

It’s important that people be empowered to decline a delegated task or responsibility if they don’t feel that they have clear enough Decision Principles to succeed.

Example

Google

Compare what Google’s Nine Principles looked like in 2008 to the revised version created in 2013.

As you can see, “Default to open processes” grew out of “Share whatever you can,” and “Ship and iterate” was originally “Don’t kill projects; morph them.”

The evolution is subtle, but important: from sharing all information to sharing information via open processes, and from preventing work from being lost to making sure work gets out the door.

Far from throwing out the old guidelines, Google refined them based on greater experience with the kinds of decisions its employees need to make. The more you apply your Principles, the more accurate they can become.

Learn from mistakes

View decision missteps or delegation failures as opportunities to evolve and surface new Principles.

If a decision doesn’t align with the mission or strategy, take a look at the situation. Maybe the person misapplied the Principle. Or your Principles may need work.

Any decision missteps or delegation failures are opportunities to surface new Principles for the future. They provide valuable information about your culture, your customers, your team and your process.

If people consistently aren’t making the “right” decisions, lean into the missing Principles and communicate purpose—instead of reprimanding people and managing the process.

Make sure you understand what’s really going on.

  • Are people not clear on what the Principles are or what they mean?
  • Do they not have enough context or information to apply them?
  • Are your Decision Principles written for their world and in their language?
  • Is this a case where nested Principles are needed for a specific context?

Small changes in wording can make a big difference in effectiveness. This is why it’s best to co-create Principles with the people who will use them.

“Why?” questions are a powerful way to prompt meaningful feedback. Use the “five whys” technique to diagnose the root causes of complex problems.

Tools for evolving principles

In evolving Decision Principles, be sure not to recreate read-only rule books.

Are the tools you're currently using to communicate about Principles causing unnecessary rigidity? Use collaborative tools to invite co-creation, and keep your Principles relevant and alive.

Cloud tools open up a whole new area for feedback and collaboration. For instance, what if you offered a commenting function on the employee handbook?

If you’re concerned about negative feedback, look to IBM for an example. In their “values jam,” IBM allowed comments on evolving values. Employees’ first comments were critical venting, then they became productive.


From edge to core

Principles allow for adaptive processes to integrate learnings from the edge into the core of the organization.

Organizations often try to keep innovation at the edges of the organization so as not to disrupt the long-standing status quo and any existing momentum. But there is rarely a way to bring learnings from the edge back into the core.

The feedback process offers a tool for bringing learnings from the edge back to the core.

Recap

Tips on designing Decision Principles:

  • Involve your broader team.
  • Focus on principles, not policies.
  • Hold a Decision Principles summit.

Steps for designing Decision Principles:

  1. Find the fork.
  2. Develop a Principle to direct the choice.
  3. Test and refine.


  • Decision Principles aren't etched in stone—they’re meant to evolve. View decision missteps or delegation failures as opportunities to evolve and surface new Principles.
  • In evolving Principles, be sure not to recreate read-only rule books.
  • Principles allow for adaptive processes and feedback to integrate learnings from the edge into the core of the organization.

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