UPDATES&INSIGHTS: ADVISORY – You Do You: The Importance of Staying True to Your Guiding Principles

A mission statement defines a company’s reachable aspirations, its objectives, and its approach to reaching those objectives. A vision statement, however, is a “fast-forward” description of the desired future state of the company within the boundaries of its mission. Together, they form the company’s “Guiding Principles” (GPs), which should govern all decision-making, investment, and experimentation.

Too often, however, we see business owners veer off from their GPs. Whether from fear, impatience, lack of focus, or a host of other reasons, decisions and investments are often inconsistent with what the company is today and what it desires to be in the future.

Staying true to your GPs will build trust with employees, customers, vendors and capital markets. Here are five essential reasons to stay true to your organization’s Guiding Principles.

5 Essential Reasons to Stay True to Your Organization’s Guiding Principles

  1. It serves as a filter for new revenue opportunities.

    Most companies with good networks of relationships are frequently presented with new revenue opportunities. When faced with these choices, it is imperative that you filter the options according to your GPs. First, eliminate the choices which do not fit your mission at all, and then rank the remaining options according to which ones will advance your organization the furthest, fastest, and/or in the least costly way possible.

    We were recently asked to help a client through such a decision-making process. This client is a construction company that operates primarily in the wireless industry, building and modifying large and small cell sites. As a result of our client’s vast network of connections throughout the construction industry and supply chain, they were presented with an opportunity to construct a series of new fast food locations. While it was tempting to rationalize this opportunity under the general umbrella of “construction,” the reality is it did not fit their mission. The customer contracts, building requirements, equipment to be installed, safety standards, and subcontractors to be utilized were all completely different from the company’s normal business processes. The opportunity was wisely declined.

    Owners are often paralyzed by fear. They are afraid the phone will never ring again with an opportunity in their wheelhouse, so they toy with pursuing projects outside their expertise. Giving in to this fear can be expensive and time-consuming as owners work through unfamiliar contract provisions, different industry norms, trying to jam their usual processes into a different revenue model. It rarely goes well.

    Filtering decisions against the backdrop of your GPs will help you say “no” when you need to and leave time to focus on what your company does best.

  2. It helps drive consistent messaging to your employee base.

    Your best employees do not work for a paycheck. They are passionate about your mission and the “why” of the company’s existence. You owe it to them for your messaging to be consistent with the GPs they have bought into. Leaders who dart from one idea (or direction) to the other frustrate their best people who are working hard to represent the company and its mission.

    Many great leaders and communicators practice tying their messaging into all or a portion of the company’s GPs. Leaders who have to contort the logic to make the message fit should pause and rethink their goals and initiatives.

  3. It creates a strategy for your hiring and training.

    Using your GPs as a guide and filter will help you find and train those individuals whose dreams line up with your company’s mission. Despite the fact that most applicants are merely looking for a way to pay their bills, a sliver of the population is passionate about solving big problems and delivering a great customer experience, and they want to join you in achieving that goal. Their motivation for personal improvement is to enhance their ability to serve customers or to create new products and services that will bring even greater value to your customers.

    Using your GPs as a tool to filter applicants and to develop your workforce will bring cohesiveness and passion into your business.

  4. It creates focus for your innovative experiments.

    In today’s world, businesses are working to innovate ways to serve customers, improve employee quality of life, and reduce costs. Following the best practices of the large tech companies as well as top-line consultancies on innovation, many companies are electing to do “micro innovation” experiments. These are typically small, targeted projects with small budgets, but because the ideas have bubbled up from the employee base, there is great enthusiasm to pursue them.

    Once you have opened the door to micro innovation ideas, you will likely be overwhelmed with options. Use your company’s GPs to determine which ideas should be funded and pursued, and which ideas should be tweaked or set aside. A creative innovation that does not support your mission may be temporarily exciting, but it can distract you from pursing better ideas. The discipline to forego a project outside your GPs is worth the effort.

  5. It creates market differentiation and burnishes your brand.

    Your GPs define who you are and how you do business in the market. We recently visited a business that manufactures tooling for the injection mold industry. Much of this very competitive industry, which is both capital and labor intensive, has unfortunately moved overseas to capture lower labor costs.

    However, one of the primary GPs of this particular company is on-time delivery of tooling. They estimate that there have been fewer than five instances over the course of their more than 20 years in business that they have failed to meet their delivery date commitment to their customer.

    This GP defines and differentiates their company within their market. It guides them in choosing customers (i.e., only customers who value on-time delivery and are willing to pay for it), their contracts, approach to project management, employee training, and overall performance culture. Delivering on time is their reputation, every day.

Simon Sinek is famous for saying, “People do not buy what you do; they buy why you do it.” The best and most profitable companies know who they are and why they do what they do. They use their Guiding Principles to guide their decisions and to build their brand. Staying true to who you are will focus your attention, efforts, and capital on achieving your long-term goals as you become the company you envision.


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