Guiding Principles And Why Your Business Should Have Them

By Jayme Broudy, Contractors Business School

Dear Jayme:
My business is doing okay. We get the jobs done, but sometimes it feels like everybody’s going in different directions (and not the directions I’d like). I feel like I ought to have things the way I want, but I don’t know how to make that happen without correcting people a thousand times. What do I do?
-Clayton

Dear Clayton:
Just as your family has “house rules” that govern their (and your own) actions, your employees need guidelines about how you want them to act with each other and the world. Your Guiding Principles are the house rules for your business “family”.

Guiding Principles are a broad philosophy that encompasses your personal beliefs and values and guides an organization throughout its life in all circumstances, irrespective of changes in its goals, strategies or type of work. They create a company culture where everyone understands what’s important.

Employees get some sense of your philosophy by observation and inference but they need a clear and complete understanding of your priorities to let them know “What would the Boss do?” in any situation. And since you can’t tell them how to behave in a million different situations, you establish a set of more general Guiding Principles.

“But” you say “My guys can get the job done. Why does it matter whether they think the way I do about other stuff?”

Because their job isn’t just about swinging the hammer. Alphonse is a great roofer, but smokes dope on coffee breaks. Is that okay with you? Susie’s a great accountant, but answers the phone with “Whaddaya want!?”. Igor hangs drywall like a champ, but makes up vicious lies about his co-workers. They’re all great at the technical part of their jobs, but is this what you want around your place? Would you tolerate it at home?

What do Guiding Principles look like? Some examples:

• “Underpromise, Overdeliver”

• “We always err on the side of the customer”

• “We’re honest in our dealings with each other and the public”

• “We take immediate responsibility for our actions, both personally and as a company”

To make them work:

• Get clear on what’s really important to you. Your personal philosophy is so deeply ingrained that it’s often hard to specify, so take some time, think about it and write it down.

• Walk your talk. All the time. You absolutely cannot violate your own Guiding Principles or they become meaningless. If you find this difficult, there’s a bigger problem.

• Make them public: Up on the wall, in the trucks, in your advertising etc.

• Enforce them: If you’re aware of a violation, make sure the employee gets a reminder, then a warning, then consider termination (and do NOT accept the “I do my job, what’s the big deal” whine).

• Only hire people who share your values. Don’t think they’ll fall in step later.

As a business owner you get to make the rules, and that’s the most powerful and fulfilling parts of owning a business. Whatever you really believe is important in life, Guiding Principles will embed them in the basic structure of our business and help make it both easier to run and a place you’re proud to own.
Cheers!
Jayme

“Money doesn’t make you happy. I now have $50 Million but I was just as happy when I had $48 million.” –Arnold Schwarzenegger

Jayme Broudy is the founder and principal of Contractor’s Business School® - a coaching, training and consulting firm specializing in helping contractors produce more profit in less time. Since 1993, Jayme has worked with hundreds of contractors in many specialty areas to build successful stand-alone businesses. Visit www.contractorsbusinessschool.com/assessment to complete a FREE Business Analysis, or call (800) 527-7545 to get the FREE CD "10 Key Strategies to Build a Business that Works."