Principles & Values

In business, there is a lot of confusion around principles and values. This will be a quick post that clearly definies what each is, how they work together, and how you can think about them in terms of your business.

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Values

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Values are the underlying ideas that drive your business. Values are usually defined with one word. They are not statements. Honesty is a value. Another (similar but different one) is trust. Another simplicity.

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Values are single-word definitions of ideas, and those ideas go on to influence every part of your business. So when you think about values, you should be thinking of the most fundamental core ideas that drive your business.

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Importantly, businesses are often reflections of the founders and so as a founder you should really think about your personal values and what drives you, and how that is going to be reflected in the business that you create.

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Principles

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Principles, on the other hand, are a bit more complicated. Principles are like instructions for behavior that are relevant across a diversity of situations.

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What we see in tech today is that a lot of influential personalities (founders, investors, etc) talk about values when they mean principles.

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An example of a principle is “the customer is always right” another is “think first, talk second.” Those are both a sets of instructions for how to behave across a number of variable situations.

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Principles + Values

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So how do principles and values work together?

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First, it’s important to understand that principles are derived from values. The first thing is that you need to define your values and which of those values you want to apply to your business.

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Consider the business you want to create and who you are as a person and founder today, and how that contrasts with who you want to be.

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Note #1: The contrasts you find are often called blindspots. Use your awareness of them to become who you want to be.

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So you need to spend some time thinking about what you care about and once you have a short list of your most important values (it should sound a lot like what Agent Smith questions) and then you need to take those values and create a set of principles that are flexible enough to deal with any number of situations.  

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Note #2: You don’t want dozens of principles. You want maybe five. They need to clarify how representatives of your organization should behave in any given situation. When done well, less is more.

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Summary

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If you properly define your values first and then a set of principles derived from your core values, it will be much easier for you to communicate to your business representatives whether they’re employees, contractors, whoever, how they should try to think and act in any given situation as a representative of your business. And again, your business is in many ways a representation of you. So you should really care about this and spend a lot of time thinking about it.