I am pleased that my piece for strategy+business on leading through principles made the 2017 “most read” list. With more than 20,000 views, the article certainly resonated with many people. And that is the more important point–how moving from rules to principles engages and empowers an organization to more nimbly solve problems, seize opportunities, and fulfill its goals.
Principles, unlike rules, give people something unshakable to hold onto yet also the freedom to take independent decisions and actions to move toward a shared objective. Principles are directional, whereas rules are directive. A simple example of a rule: “All merchandise returns must be made within 30 days.” Contrast this with Nordstrom’s principle-based approach: “Use your best judgment in all situations. There will be no additional rules.” The former shows no trust in either the sales associate or the customer. The latter is exactly the opposite and encourages the frontline worker to build a relationship with the customer.
It has been more than three decades since Lou Gerstner turned IBM around using what was then a groundbreaking idea: managing by principles rather than procedures. Yet many organizations have been slow to move beyond rule-based approaches.
Included in the full article is an infographic with three concrete steps for developing operating principles that work.