What are Operating Principles in Business & How to Use Them?

Do you want to know what operating principles are in business and how to make use of them? This article has shared detailed information about operating principles in business and why and when to use them.

Operating principles are a way in which companies put their core values into practice to achieve their goals. These principles will help your employees see the bigger picture. It will make them aware of the long-term goals that your organization has. Operating principles influence the culture and values of your company.  

My goal with this blog is to help you understand everything about operating principles. I will share information on why and when to use them, and how to document operating principles and values for your organization.

What are Team Operating Principles?

Team operating principles are the rules that let employees know what’s acceptable and not acceptable in their company. Such rules serve as guidelines for them in making the right decisions and building trust. As a result, it will enable greater innovation in your business.

These operating principles can be of many forms, but that doesn’t matter. What matters is how well they get defined. Any sports that you play or watch have well-defined rules, correct? The same applies to your company.  

Incorporate these guiding rules to achieve the set goals of your business:

1. Always communicate with each other in the team, whether it is good or bad news. 
2. Never make assumptions Both for the company and its employees. Always assume good intentions. 
3. Focus on important issues rather than non-significant ones     
4. Hold meetings weekly, even if it is only to share a piece of information.
5. Set clear decision-making roles of the group and individuals
6. Cultivate trust For this, ask questions to understand others’ different perspectives and always portray each other in the best possible way. 
7. There is nothing wrong with admitting that you don’t know anything about that particular topic and stuff or that you will get back to them later.
8. Always try to resolve a conflict with another person on your own before approaching upper management. Go to them only when it becomes impossible to solve the problem. 

I will share an example of the whole foods market and how they apply the rules. For example, their rules regarding vendor relationships state that employees will show suppliers respect, fairness, integrity and expect the same in return.

If any conflicts arise, the solution should be a win-win situation for everyone. The whole foods market understands that creating and nurturing the community of its stakeholders is essential for long-term success. 

When the company came into conflict with one of its suppliers, it used this rule to ensure a successful outcome. Instead of coming up with a solution and imposing it on the supplier, it focused more on communication and mediation. The result was that the new arrangement got praised by both sides. 

In the next section, I will share values and operating principles that prominent companies like Google, O’Reilly Media, Colorcon, and UC Berkeley follow.  

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What Are Some Examples of Operating Principles?

Here are the values and operating principles of five prominent companies. 

1. Google

   

   Google has nine operating principles that it follows in its workplace. 

   1. Being fast is better than being slow.
   2. You are not bound to work on your desk to complete your tasks.
   3. There is more information out there. 
   4. You don’t have to be in a suit to be serious. 
   5. It’s best to pay attention to one task at a time. 
   6. Democracy on the web works. 
   7. You don’t have to do something evil to make money. 
   8. The requirement for information crosses all boundaries. 
   9. Being only great isn’t enough. 

   Want to know more about Google’s values and its culture of success? Check out CloudTutorial’s blog on Google values and its culture of success for further reading. 

2. O’Reilly Media

   

   O’Reilly Media has ten operating principles that it follows in its workplace. 

   1. Look at the issue from the outside perspective. 
   2. Surprise and delight your customers, clients, and co-workers. 
   3. Embrace, adapt and bring change to the organization. 
   4. If the impact is high for the company, it should be the top priority for you. 
   5. Is our product or services best for our customers? 
   6. Are these ideas best for our company? 
   7. Do you have a better idea or, do you see some processes that are not working. Then speak up about it. 
   8. Measure what matters the most. 
   9. Context is important. Say why not just what. 
   10. Be tough on problems, not on team members.

3. Colorcon

   

   Colorcon follows five operating principles that guide its core values.

   1. Empowerment. Helping people to achieve success and growth in the organization. 
   2. Customer and client focus. 
   3. Good teamwork in the squad. 
   4. Simplicity and speed. 
   5. Keep getting better.

4. UC Berkeley

   

   UC Berkeley follows five operating principles to work cooperatively. 

   • We are inclusive and excel together. 
   • We simplify and reduce unnecessary steps. 
   • We focus on enabling greater innovation and service. 
   • We imagine and innovate. 
   • We are accountable to each other.   

After seeing all the cases, the question that arises is, why and when should we use operating principles? 

I will share compelling reasons regarding why your company should adopt an operating principle and when they should use it in the next section. 

Why and When to Use Operating Values?

Using operating principles is more than just creating another business strategy or process. It is about determining what should get done and what is out of bounds. 

Here is a scenario, let’s say that your company chose to use the operating principle “we continue to grow organically” instead of “we grow through acquisition.” By stating this value, you are showing to the world how your company will spend its time. It will also help your workers understand what they should concentrate on in their work.

By incorporating operating values, proper decisions can be made and your operations can be executed in that manner. In this way, your whole business process will sound more meaningful to your employees.

Having an operating value will help managers and leaders make their long-term plans and expectations clear in front of their staff. Everyone in the business will understand how to contribute through their decisions and actions to this common commitment.  

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How to Document Operating Principles?

Is your company facing difficulties in turning values into actions and results? 

In this situation, it is better to implement an operating principle on your own. You can try running a workshop to define your core operating values. Here are some more steps you can take in documenting your company values. 

Speaking of workshops, if you want to provide valuable leadership training to your workers, I suggest checking out CloudTutorial’s blog on effective leadership training activities. With the help of this blog, you will imbibe a lasting sentiment of leadership among your workers.  

• Ask yourself these four questions, “What do these core values look like on a day-to-day basis?” “What do these core values sound like?” “Which values would be the right fit?” “When and how should core values be adopted?”
• Ask for feedback and input. Do this on a weekly basis. It is critical that your workers feel invested in the process. Be transparent with them regarding your goals, and share your drafts with them for their opinions.      
• Provide equal access to these tenets of operation as much as possible. You can set them in a place where everyone can access them and seek input.    
• Publish your final version. But the process doesn’t stop here. Keep iterating your operating values in the future.

Operating principles provide the essential frame of reference to help balance conflicting motivations and priorities when deciding on what to do and how to act in different situations.

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