Your team needs operating principles
Operating principles are the backbone of any high-performance organization. Scrap your “company values” and start writing OPs now.
👋Hi, it’s Greg and Taylor. Welcome to our newsletter on how to make high-stakes professional and personal decisions in your 30s.
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My earliest success was at AOL in the 1990s. It’s easy to forget, but AOL was the Netflix or NVIDIA of its time and one of the best-performing stocks of the decade.
Like Netflix, it destroyed competing services from entrenched giants like IBM, Apple and Microsoft. Like NVIDIA, it benefited from an early lead in a growing category. Like both, it had the agility to execute extremely well in a chaotic environment (until it didn’t).
Much of AOL’s success came from how the company was run – its operating principles. I don’t remember them being written down (the company values probably were) but the OPs were clear to all of us. I worked on the revenue side of the house – as VP E-Commerce and then VP Business Development (extracting payments from startups).
The revenue team’s operating principles at AOL were modeled by leadership and clear to all of us. They included:
- Create two good options, then choose one
- Maximize our revenue (to maximize our stock price)
- Negotiate every detail and get every advantage
Most companies have “values” (generic and useless to inform actual work) but no clear guide to how to work. You need operating principles. Operating principles reduce the friction that comes when you don’t know (or agree) on how to act. This is true for every team you work on: your department, your marriage, your family, your softball team.
Here’s our guide to developing your own.
- Greg
Operating principles > values
Most companies write “values” instead of “operating principles.” But values are usually platitudes that are entirely useless to employees – generic words like integrity, honesty, respect, and collaboration.
These are principles you’d expect in any company – does anyone want to work for a company that lacks integrity? And as an employee, they don’t help you figure out how to do your job or handle crises. They don’t give you a guidepost for how to make decisions quickly or who to choose from three qualified candidates.
To make lots of progress quickly (and give people a roadmap to succeeding in the org), you need a shared understanding of behaviors and ways of working. This is even more critical in remote work, where you don’t have a visual reminder of the behaviors that lead to success.
Operating principles are a playbook for how you work
Operating principles are designed to be referred back to in moments of frustration (you’re not making progress), opportunity (you get a promotion), or reflection (before a review). You don’t need to limit them to three pithy phrases – you should have as many as it takes to describe your working culture.
Here are three defining characteristics of great operating principles.
1. Specific and prescriptive
Great operating principles are detailed and direct. A new hire should be able to read your operating principles and immediately understand the kind of behavior that will get them promoted.
Bad example ❌: Work with respect (Hotjar)
Good example 🟢: Display grit without ego (SnackNation)
2. Aspirational but realistic
You work this way 70% of the time and wish you worked that way all the time. Atlassian says: “Don’t #*@! the customer” and Trader Joe’s says: “Wow customer service.” Obviously not every Trader Joe’s cashier interaction will be “wow,” but they aim for a more personal touch than other grocery stores.
Bad example ❌: Be real (Coca Cola) - a bit too easy and could apply to most people
Good example 🟢: Hire and develop the best (Amazon) – they won’t always do this, but they can strive for it
3. Differentiated
Operating principles should show how your company works differently from other companies. They define the behaviors that usually surprise new hires and separate those that get promoted from those that don’t.
Bad example ❌: Act with integrity (Walmart Global Tech)
Good example 🟢: Have backbone; disagree and commit (Amazon)
Lastly, operating principles need to change and adjust as the company changes. They should be revisited every 12 months. Expect to keep 80% and update or replace the remaining 20%.
How to write great operating principles
The best way to come up with operating principles is to source them from the individuals that excel inside your organization.
Don’t start with an open ended brainstorm – start with how the organization is actually working today.
Step 1: Interview 5-10 people who represent how the company works. You don’t need to interview everyone – choose people who have influence in the company and whose recommendations get greenlit.
Starter questions
What behaviors or actions have you observed in yourself or others that have led to a recommendation being approved?
What are the three most important qualities or ways of working you’d prioritize in a new hire joining our team? Why?
What surprised you about how we work when you joined the organization? What surprises other new hires that you’ve worked with?
How do we make decisions, and how do you know when a decision is made?
Tell me about a time when the team disagreed on how to move forward – how were things resolved?
Step 2: Assign one person to draft operating principles based on the interviews. Do not draft by committee. Have one person summarize the findings (they can use AI) and create an initial list to work from. You need a first draft to react to.
Step 3: Get feedback from the full organization. Divide people into groups to discuss what works and what doesn’t. Cut or tweak your principles based on the discussion. Don’t expect full agreement – you’re looking for emphatic yeses or red flags (“We don’t work this way”).
Step 4: Ingrain operating principles throughout the organization. Once you set them, operating principles should show up in everyday operations and tentpole events.
Integrate operating principles into your review cycle – employees should know which principles they already embody, and which they need to work on.
Be explicit in interviews: you’ll only succeed here if you behave this way. Screen for these behaviors and qualities.
Talk about them until you’re totally sick of them – in all hands, in 1:1s, team meetings, and company shout outs.
Promote people who behave this way, and get rid of people who don’t. If your operating principle is “no brilliant jerks” like Netflix, you have to fire people who treat everyone else like shit, even if they’re great at their job.
Operating principles we love
Amazon / Blue Origin
Have backbone; disagree and commit
Insist on the highest standards
Take ownership
Bias for action
Earn the trust of others
Deliver results
Amazon and Blue Origin are both Bezos companies, so you can tell which operating principles he thinks are most important by comparing the two. When you read these as a group, Amazon and Blue Origin’s way of working is clear: they expect leaders to be results-obsessed, with a strong bias toward action and high performance. People who coast don’t succeed here.
Netflix
You make wise decisions despite ambiguity
You use data to inform your intuition and choices
You look beyond symptoms to identify systemic issues
You spend our members’ money wisely
You make decisions mostly based on their long term, rather than near term, impact
Netflix has a list of 40+ valued behaviors – the above is just a sample. It’s better to be comprehensive and clear than pithy and meaningless. A new employee reading this list could easily understand what to do to be promoted – for example, “You are calm in stressful situations” or “You make tough decisions without agonizing or long delay.”
Stripe
Users first
Move with urgency and focus
Be meticulous in your craft
Seek feedback
Deliver outstanding results
We particularly like Stripe’s operating principle to “Be meticulous in your craft” because it sets clear expectations. If an employee is a great thinker but submits a document full of typos, that’s not up to Stripe standards.
Asana (AI principles)
AI should help people achieve their goals
We design for human + AI teams
People are accountable for decisions
We are committed to safety—in the short and long run
We promote transparency, in practice and in product
Asana has AI-specific operating principles (which of course we love because we’re AI-obsessed). We love that they’re thinking long-term about how AI and humans should collaborate, so that they don’t look back in a few years and think, “Shit – we really shouldn’t have let AI run our decision-making.”
Slack (product principles)
Don’t make me think
Be a great host
Prototype the path
Don’t reinvent the wheel
Make bigger, bolder bets
Like many product-led companies, Slack has product-specific OPs to guide its product development. We especially like “don’t make me think,” which can be applied to the user-facing product and a team member’s internal output.
Section
We put the student outcome first
We live and breathe the data
We take leaps of faith
We get to V1 fast
We work high-low
We live in reality
We win and lose together
AI is our coworker
Our current favorites are “we work high-low” and “we get to V1 fast” – both very true of our culture, both absolutely essential to how people succeed at Section. Our newest is the AI operating principle, and it will no doubt evolve this year as we adapt to working with AI.
Our advice
Developing your operating principles is a leadership skill. They show that you have a point of view for the behavior that drives your success, and can model that behavior and encourage it in others.
If you’re interviewing at a company, ask what their operating principles are. If they don’t have them written down, ask, “What specific behaviors make your team members successful?”
If you’re taking over a team, take a moment to reset and consider your operating principles, and involve your team members in writing them.
If a new person is joining your team, use it as a moment to remind your boss, “Hey – we need operating principles so this person knows how we work.”
And if you don’t have control to change your company’s or team’s OPs, start with the places you do have control. Your family, your marriage, your church, your book club, etc.
Leaders get teams to produce great work over time. To do that, leaders remove friction from doing that great work. Operating principles are a critical tool to reduce team friction. Make sure your team has them – and if not, be the first to suggest that you develop them.
To the next 10 years,
Greg and Taylor
I believe that teams need to make a promise that only they can keep. I use the Simple Marketing promise by Seth Godin.
My product is for people who believe
I’ll focus on people who want
I promise that engaging with what they make will help you get!
This promise, plus your principles hold a lot of power
A Net Positive approach. I agree on the mushy senses of Values.