Organizational Wellness

Why Every C-Suite Needs a Clear Set of Operating Principles

Last Updated Sep 26, 2024

Time to read: 7 minutes

What makes your company different from the competition? Is it your innovative products? Your stellar customer service?

The truth is, while those elements matter, the real differentiator lies in your operating principles. These guiding statements shape your company culture and provide a blueprint for how employees should act every day. From how they collaborate with teammates to how they resolve customer issues, operating principles offer a clear roadmap.

But it's not just about behavior. When done right, these principles become the foundation of your business, driving consistency and excellence across the board. Ready to harness their power and set your team up for success?

What Are Operating Principles (and Why Should You Care)?

Operating principles are guiding statements that shape how your organization operates day-to-day. They set clear expectations for employee behavior, whether that’s collaborating with colleagues or interacting with customers.

But they do more than just set expectations. Operating principles also help communicate your culture and values across the company. They align everyone around the core ideas that make your business stand out.

For instance, having a goal to deliver excellent customer service is great, but it's broad. Operating principles break that down into actionable steps, helping employees deliver the kind of customer experiences that set you apart from competitors. In this case, some operating principles you may lay out include: owning the resolution, following up constantly, and maintaining a positive tone. These give workers a concrete sense of how to operate to reach the company’s goals.

Real-World Examples of Operating Principles

Effective company operating principles often start with high-level value that everyone can rally behind. They then provide clear, actionable steps to ensure those values come to life in the way your team operates.

Take a look at Chewy, the online pet retailer. They have a core operating principle: "customers first." But they don’t stop there—they break it down further to make it actionable: “We WOW our customers with an exceptional, memorable, and reliable experience, every time.” This gives their team a clear vision of how to put customers first in practice, ensuring every interaction is remarkable.

Similarly, the email marketing company Userlist builds its operating principles around its core values. One of their values is "people first." Their operating principle brings that value to life: “We assume that all of us act with the best intentions.” This gives employees a tangible way to embody their "people first" philosophy in daily interactions.

Both companies start with a clear, high-level idea like "customers first" or "people first." They then flesh it out with detailed instructions on how employees should think and act to stay aligned with that value. It’s a powerful formula for creating operating principles that not only inspire but also guide daily actions.

How To Develop Effective Operating Principles

Creating operating principles may differ based on your company's structure and goals, but the process generally follows a similar path.

Consider Your Objectives

It's helpful to start by considering your business objectives — even if you can't tie them to a core value or operating principle just yet. Your goals could be financial, such as "increasing profits," or more values-driven, like "creating a positive and inclusive workplace." It just depends on what you want to accomplish.

Starting here helps you clarify the kinds of operating principles needed to support your company’s growth. For example, a goal to increase profits could evolve into a core value focused on improving efficiency. That, in turn, might inspire a principle like "build high-performing teams."

If you're unsure where to start, a skill gap analysis can help identify areas for improvement, highlighting key objectives worth pursuing.

Brainstorm with Your Team

Even if you have the authority to write operating principles yourself, it’s best to collaborate with people across the organization team. Buy-in from everyone is crucial—people are more likely to follow guidelines they helped create.

A great way to kick off this process is through reflective dialogue. Pair participants together to answer thought-provoking questions, such as "When was our organization at its best?" or "What do we need to surpass our competition?" Afterward, pairs join larger groups to share insights and brainstorm collaboratively.

As the CEO or HR leader, you can guide these discussions by shaping the questions that prompt thoughtful dialogue and collective problem-solving.

Define Your Core Values

Once you've gathered ideas from your team, the next step is distilling those insights into core values. These are the shared beliefs that everyone agrees on, reflecting what your company stands for. For instance, if there’s a consensus that customer service needs improvement, "putting clients first" could emerge as a core value.

Each core value should be a clear, concise takeaway from your brainstorming session. You might end up with several values that address how employees collaborate, serve customers, and strive for excellence.

Translate Values into Action

With your core values in place, it’s time to bring them to life through operating principles. These principles turn your values into practical, everyday actions that guide your entire team.

For example, if one of your values is "putting customers first," operating principles might include:

Prioritize customer inquiries over other tasks.

Make customer service everyone’s responsibility.

Hold each other accountable for delivering exceptional client support.

Notice how these principles take a broad value and translate it into clear actions. This makes it easier for employees to understand how to embody the company’s values in their daily work, ensuring that your core values are not just words on paper but are actively practiced across the organization.

Implementing and Maintaining Operating Principles

Creating a set of operating principles is a strong first step, but it’s just the beginning. To make a real impact on your daily operations, your employees need to buy into them. These four strategies will help you embed your operating principles into the fabric of your organization, turning ideas into lasting change.

Document and Share Widely

Start by ensuring that everyone knows about the new operating principles. This means documenting them clearly and sharing them across all channels. Post them on your company website, send them out in internal emails, and make them visible on your internal platforms.

The goal is to make these principles impossible to miss. Research shows that repetition is key—it often takes multiple exposures before information sticks. So make sure your team sees these guidelines again and again until they become ingrained.

Keep the Conversation Going

Announcing new operating principles is just the beginning. To ensure they truly resonate, you need to integrate them into your ongoing communication. If they’re mentioned once and forgotten, employees will assume they’re not important.

Incorporate your principles into regular touchpoints like company newsletters, team meetings, and performance reviews. The more you reinforce them, the more likely employees are to internalize and apply them in their work.

Solicit Employee Feedback

Your employees bring valuable, on-the-ground insights that your leadership team may not have. Invite them to share feedback on how the operating principles are working in practice. This input can help you fine-tune the principles to ensure they are realistic and effective.

For example, if you introduce a principle around open debate and collaboration, but find that certain teams still rely on top-down decision-making. This can help identify where further adjustments are needed to bring your operating principles to life. Consider allowing anonymous feedback so employees feel safe being candid, and recognize those who exemplify your principles in their day-to-day actions.

Monitor KPIs and Adapt

Operating principles are designed to help achieve your business goals, so tracking their effectiveness is essential. Continuously monitor key performance indicators (KPIs) tied to your principles. If the data shows they aren’t having the intended impact, be ready to adapt.

For example, your big-picture goal might be improving efficiency. That could lead to an operating principle that provides instructions for employee growth to make this happen — but if a quarter passes and your productivity KPIs remain unchanged, that's a sign your new operating principle isn't having the desired effect. Tracking KPIs ensures you’re not just hoping for change—you’re actively measuring progress and refining your strategies as needed.

By documenting, reinforcing, listening, and adapting, you can ensure your operating principles move beyond words on a page and become a powerful force driving your organization forward.

Operating Principles and Employee Wellbeing

C-Suites use operating principles to help their organizations change and improve. Depending on your goals, they can help you refine company culture or achieve business objectives.

Remember employee wellbeing when coming up with your new operating principles. Happy employees are 13% more productive, which makes it worth investing in an employee wellness program that can create a happier workforce.

That's where Wellhub comes in. We offer corporate wellness solutions that can drive better retention and higher productivity. Get in touch with a Wellbeing Specialist to learn how a new wellness program could help you achieve your business goals!

Company healthcare costs drop by up to 35% with Wellhub! (* Based on proprietary research comparing healthcare costs of active Wellhub users to non-users.) Talk to a Wellbeing Specialist to see how we can help reduce your healthcare spending!