Underpinning the Golden Triangle – The Value of Business Principles

Today we are talking about business principles – the base of the strategic golden triangle and the foundations of any organisation.

Principles are generally the guiding forces underpinning an idea; the fundamental truths of a group of people. In terms of a specific organisation though, business principles are synthesised summaries of how an organisation should operate without going into the confusing details – and who at a strategic level wants to (or should) be bothered with detail? Business principles (when they are clearly defined) form the crux of an organisation’s culture and when well-formed and well understood they can drive not only success, but morale and staff confidence.291px-Golden_triangle_and_Fibonacci_spiral.svg

I would argue that this applies to society generally and in fact our society presents the best example to illustrate how important principles can be.

In the olden days (ok, probably up to only sixty-odd years ago) people still generally acknowledged that Australia was a Christian country. In fact, officially it still is a Christian country and the society of (originally white) Australians was built on Christian beliefs.

The behavioural principles in the Bible that guided pastors in their sermons and society in its actions came from two main places – the Ten Commandments in the Old Testament (eg thou shalt not steal, murder, envy, blaspheme etc) and the new commandment given in the New testament (“love your neighbour as yourself”).  These were the principles on which this country, as we now know it, was built.

And if you think about it, these eleven easily recallable principles, and especially the principle of “love your neighbour as yourself” probably provides you with a decent guide to behaviour in most circumstances. However, now – although most people still have a general sense of what is good behaviour – we are not all reading the Bible and we are not basing our behaviour on the same set of principles… I challenge anyone to say that all Australians agree to the same interpretation of what is important to this country!

So enter the burgeoning role of legislation – the detailed rules agreed to by the country’s representatives. Apparently between 1956 and 2006 the number of pieces of Commonwealth legislation increased by approximately 50%; the number of pages of Commonwealth legislation increased by about 900%. That is a heck of a lot of detail about how we should behave and no one person can remember all those laws!

So while this blog is not to argue about the role or reality of religion, I hope this example does illustrate where principles add value.

In an organisation, it is obvious that employees cannot remember all the detailed business rules, policies or processes. If we did rely on each employee knowing and remembering all the rules, the organisation would have no solidarity – each employee would have a different interpretation about what is important to the organisation and what behaviours are appropriate in trying to achieve the organisation’s business goals, based on the rules that are applicable directly to them.

However, if an organisation has a short set of business principles (five or less is ideal!) then it is reasonable to expect that each employee remembers them all, embeds them all into their work and acts upon them all.

So combined with the other strategic components of the Superior Business Analysis Organisational Model, what would the golden triangle mean in practice? An organisation whose employees all have the same picture of (1) where they’re heading, (2) what to watch out for, and (3) generally how to get there.

Doesn’t this sound like a recipe for success?

To summarise…

A business principle is:  A fundamental truth held by an organisation that provides a guide to how its people (employees, volunteers, governing bodies) should behave.

The purpose of defining business principles:  To ensure that all people associated with the organisation are united in behaviour and culture – this is beneficial for morale, efficiency and marketing, amongst other things.

What do you think?

Is this the right definition of a business principle? And can you think of any good examples of business principles that have directly benefited an organisation?

What do you think?