Principles are the pillars of strategy and operations that define how the company will achieve success and win in the marketplace. In Pat Lencioni’s Advantage model, these are referred to as Strategic Anchors, and answer the question “How will we succeed?” 

Through my business travels I’ve seen probably a hundred different iterations of this in a hundred different formats.   Some take up entire books.   Some are on a sheet of paper.  The key thing is they’re written, well-defined concepts that anyone in the company can apply to a situation to ensure different people of different backgrounds  arrive at similar conclusions.

Helpful and useful principles tend to be specific to the nature of the business, deeply aligned with the personality of the founder or CEO and practically framed in implementation.  When evaluating a major decision or project, teams will refer back to these guiding principles to ensure alignment.

Generally, the ones that I’ve seen that are successful are also short and pithy in framing.  You can have pages of supporting information to document what they mean and how to apply them.  That’s fine and encouraged, actually.   But we want the core idea to be something that sticks in the heads of a diverse group of people.  

My experience is examples are the best way to communicate this so here are a few from my background with successful B2B software companies:

• “If our customers win, we win.” – The best B2B software companies focus on long-term customer success rather than short-term revenue gains. They build sticky products that solve critical pain points.
• “Start small, prove value, then grow the account.” – The best B2B software companies tend not to require large upfront commitments.  Instead they have low-friction entry points (freemium, trials, small contracts) and then expand usage within an organization.
• “Software should scale effortlessly, without friction.” – The best B2B software companies are prepared to rapidly grow from one to ten to hundreds of accounts and do that in a way that doesn’t break their business.  
• “The best sales rep is the product itself.” – By far the most cost effective way to sell your product is to have the prospect sell themselves on buying it after they use it.   This also recognizes a basic reality in the market that the vast majority of a buying decision has been completed before a customer engages with a sales rep.
• “Win the core workflow, then expand.” – The most successful B2B software companies position themselves as mission-critical software for an enterprise’s core workflows, making it hard to displace.  Once they own a key workflow expanding into secondary workflows is relatively easy.

Principles Development Process

In practice, you’ll likely be developing and refining a company’s principles forever.  These aren’t the kind of things that you write up, call ‘em done and move on.   To get a starting point, though, here’s a basic process:

1. Examine Successful Patterns: Take a step back with your leadership team and analyze what has made the company successful so far and what strengths it wants to build on going forward.   This will require some deep and honest self-assessment and can often be aided by a neutral third party.  I’d also recommend listing out what differentiators your approach in the market and then narrow focus to a few that, if you absolutely nailed, you’d be the best in the world at.
2. Create a List: Through discussion, pick the top principles that will guide the company’s way to win. These should be stated simply at first, you can think about making them witty later.  For example if you think “Operational Efficiency” or “Building a Trusted Advisor Relationship” are the keys start by writing those and bulleting out what they mean in the context of your business.
3. Refine: Ultimately we want these principles to be easy enough to understand that all employees can use them to guide their actions.   So take the list that you’ve got and refine it to ensure it’s clear, concise and easy to understand.   At this point I’d also work on making them catchy and giving them a little spice.   Your team and company has a personality so now is the time to put your particular spin on these.
4. Apply and Communicate: Document these strategic anchors in the company’s strategy or culture playbook. Communicate them along with lots of examples of how they’d inform real life decisions.   The more that you can help people understand how to apply the principles the better aligned the company will be.  of what kinds of behaviors or decisions exemplify each. Going forward, consciously tie major initiatives or OKRs back to one of these anchors to reinforce them. 
5. Review.  Review the principles annually to ensure they’re still the right formula for success as the market evolves.