What are Guiding Principles and Why Do They Matter for Your Business?

When you look at successful companies that propel profit and growth year-after-year, there are certain patterns that show up consistently: an intense focus on quality, a constant quest to get better all the time, and extreme clarity around the guiding principles that dictate the why, what, how, and who of their brand’s offering.

Businesses that clearly articulate their guiding principles to all levels of their organization are often the ones that are best positioned to face adversity and disruption while nimbly repositioning themselves in the broader market.

Some leaders, however, may struggle to distinguish between the different guiding principles — particularly in how they strategically target different aspects of managing their organizations.

Guiding principles

Guiding principles are the foundational elements that constitute a brand and define the DNA of the company. When expressed clearly, your organization’s guiding principles can help you attract and retain employees and talent, as well as customers and clients that align with both who you are and where you’re going as a company.

There are four primary guiding principles that govern most modern businesses: purpose, mission, vision, and core values.

Purpose

The purpose is the “why.” Why your organization exists. What lights a fire in your belly and gets people motivated to be a part of your company. Simon Sinek says it best when he notes that “People don’t buy what you do; they buy why you do it. And what you do simply proves what you believe.”

Your organization’s purpose should largely explain the reason that you’re in business, the problem you want to solve, and how you choose to engage within your industry and with the broader world.

Being able to articulate your why — the inherent purpose of your business — will not only attract more valuable talent to work for your company, but will make it easier to achieve your mission. For this reason, purpose should be at the center of everything you do.

Vision

Your vision should clearly define the “what.” What are you aiming to accomplish with your vision? What is your ultimate goal? Your vision can and should change over time, and should be a part of the three-year, five-year, or ten-year plan for your business. It will provide the North Star that guides your journey and encapsulates your company’s trajectory in a way that’s easy to articulate to your team.

Mission

Your mission gets into the “how.” A lot of times, this is where companies begin: how are you going to show up in the market? How will you ultimately achieve the vision? You want to be able to create something that’s truly authentic. More importantly, you want to build a culture intensely focused on the manner in which you do your best work.

Many businesses use bankrupt words to explain their mission — ultimately landing on worn-out language that simply states the table stakes, the minimum it takes to compete, in their industries. Your mission should clearly state the differentiating factors, processes or experiences you bring to the table to set yourself apart in the broader market.

Core values

Your core values are the non-negotiables of your business. They are how your purpose, vision, and most importantly your mission are lived out every day at all levels of your company. The core values you choose should further define the behaviors that show up in the day-to-day — not the every-now-and-then.

These values clearly and succinctly articulate the distilled essence of your business’s “who” — who you are, who you want to be, and who you want to attract in the broader market.

In this fashion, your core values should help dictate both who you attract to your team and who you choose to work with in the course of doing business. If an individual or organization does not share your core values, they probably aren’t the right match for you.

Taking stock of your organization

When you can identify and articulate the why, the what, the how, and the who of your business, you catapult yourself ahead of your competitors and become better positioned for growth. Collectively, when your entire organization can identify and live these principles, you gain extreme power in the market.

By ensuring clarity on all four guiding principles, you create the greatest opportunity in your business to propel long-lasting, sustained growth. Clarity of vision — from onboarding to the day-to-day operations of your organization — is key to achieving success.

In our work as a consulting and branding agency, we see time and time again that the companies who do guiding principles right are the ones that outperform the competition. We see these companies consistently rank as a great place to work. They cultivate outspoken promoters of their brands both internally in their teams and externally in their clients, vendors, and partners.

Consistency and clarity in your organization’s voice leads to everyone on your team singing from the same song sheet — it creates a power and amplification that research has proven leads to higher metrics across all aspects of the business.

Where does your organization stand?

We routinely ask three questions to leaders of companies interested in assessing where they stand on their organization’s guiding principles.

First, can everyone in your company recite any of your guiding principles off the top of their head? Second, is your language truly and uniquely differentiating in a way that expresses what you do differently from the competition? Third, if these guiding principles exist in your company, where do they exist and to what degree?

Finding the answers to these questions can be difficult, and will involve careful research into how your brand permeates each level of your business.

However, by understanding where your organization stands on your guiding principles — by keeping the pulse on how these factors drive your brand, employee, and client experiences — you can orient your organization to face adversity head-on and propel growth in the long-term, no matter the state of your industry or the broader market.