Operating Principles: What They Are and How to Use Them

Kristen Craft | April 20, 2018

Operating Principles, or as they are often referred to, a company’s operating system, are essentially the way that organizations put their values into practice and get things done.

Many companies, like O’Reilly Media, rely on operating principles to get things done faster. They also influence culture and values. Colorcon states that their operating principles “define our culture, values, and organization.” Wistia takes a slightly different angle, stating that their operating system is a “new methodology for how Wistia gets work done.”

There may be differing definitions of what operating principles are, but it’s clear that companies use them to create a company-wide focus and awareness of what the long-term, “big picture” objectives are for the organization.

Why and when to use operating principles

By choosing to use operating principles, you’re choosing to do much more than simply create another version of your previous business strategy or processes.

Operating principles give you a chance to clearly state what should not be done, as well as what should be done. This is an important detail to consider. Let’s look at an example from Boggis and Trafford’s work on how operating principles can forge meaningful strategy.

They refer to a situation in which a business opts to use an operating principle of “We continue to grow organically,” as opposed to: “We grow through acquisition.” By stating what the business is opting for one thing over an alternative, they’re clearly articulating how they want to spend their time. This can be liberating for employees since it delineates an area of work that doesn’t need time or focus.

By using operating principles, you can create a strategy that makes more sense to your employees, and as Boggis and Trafford suggest, a strategy that’s actually meaningful. This approach to strategy can be useful for managers or leaders who want to make their expectations and long-term aspirations clear, with operating principles offering guidance on how everyone can contribute through their decisions and actions.

What does mountain climbing have to do with operating principles?

Wistia, in introducing their “operating system,” found that mountain climbing was a helpful metaphor for their team to show exactly how they wanted them tackling their work on a daily and weekly basis.

According to Ed Viesturs, the only American to have climbed all fourteen of the world’s most legendary mountains, mountain-climbing is all about “coordinating responsibilities and pacing with your team of fellow climbers.”

Wistia took this approach and applied it to their product development. The result? An operating system that uses a base camp and summit strategy. During the base camp, team members explore new ideas and unleash their creativity. Once they begin the “summit” each person will have a series of expeditions (tasks, basically) that they have to carry out to ensure that the entire company reaches the peak (finishes the project).

Wistia believes that the operating system is their answer to keeping the business nimble, even as it grows. The principle of working in “short, controlled bursts with high-frequency feedback,” means that they can maintain control over how their company and product evolve over time.

What do operating principles actually look like?

We’ve given a few examples of how different organizations define specific operating principles and why they’ve introduced them. Now, let’s see what operating principles actually look like.

Fort Wayne Metals

Fort Wayne Metals lists their seven operating principles after their company values. Their values and operating principles play a big role in attracting talent and helping candidates determine if they’re a good fit for the company. For example:

Operating Principle: “Everyone must be accountable for producing to his/her potential each day: We can only accomplish our goals if everyone is focused on their responsibilities each and every day. To do less is not respecting your co-workers, everyone must participate to reach our potential.”

University of California, Berkeley

Berkeley also has a series of operating principles that relate to their values. For example:

Operating Principle: “We simplify: We reduce unnecessary steps and make it easier to get things done. Our solutions are common where they can be, custom where it counts.”

How to Document and Gain Buy-in on Operating Principles

If you think your organization is struggling to turn values into actions and results, it’s worth considering implementing operating principles of your own. Here are steps that can help facilitate the process:

  1. Start with your values: have you defined them? Are the easily accessible to everyone in the company? Make sure there’s alignment on company values before tackling operating principles.
  2. Taking each value in turn, ask yourself (or brainstorm with a colleague): “what does this look like day to day?” “What does this sound like?” For example, the value of cross-pollination might look like people from different teams sitting together at lunch. It might sound like someone asking “Hey, can I bounce something off you for a gut check?”  Though it might sound goofy, envisioning actual examples will help you define how you want the company to run.
  3. Draft a 3-word version and a 3 sentence version for each operating principle. Better yet, team up with others to draft these. These colleagues will feel more ownership over the final product and can later help you champion the ideas.
  4. Solicit feedback. Explain what your goal is, and share these drafts with others on your team or in the company.
  5. Make these operating principles as accessible as possible. Put them in a place that everyone can access and seek input. Determine a date by which you’d like to receive final feedback, so that people know the process has an end date.
  6. Get to a stopping point, and publish your final version. Remind people not to let the perfect get in the way of the good. You can (and should) iterate on these later, once you’d had the chance to test them.

Ideally, you’re giving your teams and individual employees a clear focus on a daily and weekly basis that they can relate to the wider goals of the company, and in turn, feel like their work is having a meaningful impact.

Video Transcript:

Whether you realize it or not, your team uses operating principles every day. They are the norms about how your team behaves. Operating principles define what you do, how, and why.

These can be unspoken norms or formally written down. The benefit of writing them down is you make it easier for everyone to get on board.

Many brands we know and love boast well-documented operating principles. These teams often cite their operating principles as a key driver of their success. Think Netflix, Google, HubSpot, and even Nasa.

Well-defined operating principles have the potential to help your whole team move faster and achieve more. But only if you make them easily accessible to everyone on the team. This post teaches you how to document your operating principles and get team buy in.