The role of Principles in agile organisations
Decentralised decision making is a critical ability for organisations that want to move fast, and disrupt their markets. - James Brewster, just now.
Agility in a business requires trust and it requires the organisation to take a pragmatic view about decision making. If too many decisions are centralised, then everything will wait for those decisions. Things won't happen quickly. People will revert to waiting to be allowed to do things.
If you empower your teams to make their own decisions, then they can fix problems much faster.
What are principles?
Principles are fundamental truths or propositions that serve as the foundation for business decision-making.
Most organisations, and especially their leaders, would say that their business has principles. Often, these are passed around by word of mouth, or only uttered in strategy documents.
This is wrong. They should be written down.
Unless they are easily available to everyone, and it is clear to everyone what they are and why they are there, people tend to do one of the following things:
- Make up their own, which sound sensible, but don't align with the organisation.
- Talk about their own opinions or experiences as though they are rules to be followed.
- use past precedent, or what worked for them before.
To avoid these things, it's best to work out what they are and write them down. Take the guesswork away.
How to work out what your principles are
Some surefire ways to get everyone to avoid following your principles is to have too many of them, to have principles which aren't followed or which make no sense.
If we're going to create a framework to encourage decentralised decisions, then we need to make sure our principles are clear, sensible and easy to follow. I recommend the following approach:
- Business Priorities - Talk to your management about what is important to the business, and how different areas create conflicts or priorities.
- Decision Framework - Don't start by talking about principles. Explain that you want to create a framework to help teams make decentralised decisions properly, and then start to think about what decisions they might need to make.
- Constraints - How would constraints remove the wrong options from the discussion? What constraints will help to steer decisions?
- Audience - Who are you aiming these principles at? What is their scope of application?
- Limit your principles - There are only so many cares anyone can afford. Don't try to have too many. 5-10 is usually plenty.
- Don't think of this as a "once-and-done" exercise. These will need to evolve and adapt.
Once you start to have these conversations, start to think of memorable ways to word the outcomes, succinctly. Principles should be easy to articulate in under a minute, ideally with a memorable title and an obvious meaning.
Do not be obtuse or too clever. It usually fails.
Principle format
In my time, I have found these four headers useful.
- Illustration - Something to help make the principle come alive. I use quotes quite often.
- Statement - The wording of the principle. 1-2 sentences, articulating the principle and its reasoning.
- Rationale - A more in-depth explanation of why this is important to our business and its strategy.
- Implications - Some key concepts that are important and understood. This could include an acceptance that the principle may increase costs, or incur dependencies. It could also highlight fringe benefits or relevant standards.
The format is somewhere to start. Having a standard format simply improves the likelihood that it will make sense to the reader.
Example Principle
"Whoever is careless with the truth in small matters cannot be trusted with important matters." - Albert Einstein
Statement
Data sharing is a key component of our business strategy. We believe that sharing data within our company and with external partners can help us to achieve our goals and improve our services.
Rationale
We are committed to making our data open and accessible to our employees and partners, while also protecting the privacy and security of our customers and stakeholders. We will work to ensure that our data is secure, accurate, up-to-date, and relevant and that it is shared in a way that is transparent, ethical, and responsible.
Implications
This principle is mostly about ensuring that people who are allowed to get data, can get it when they want it. We can control who that is, and we have to make sure we handle data following the law. This isn't creating a free for all. It's making sure we have data in useful formats, so we can make decisions with it.
- By making data open and accessible, the company can increase transparency and accountability, both internally and externally.
- Sharing data within the company and with external partners can help to improve collaboration and innovation, leading to better products and services.
- Access to current, accurate data can help employees and partners make better decisions.
- By sharing data, the company can avoid duplication of effort and reduce costs, leading to greater efficiency.
- By being open and transparent with data, the company can improve its reputation and build trust with customers and stakeholders.