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Establishing Corporate Guiding Principles Fast Evaluation Of Any Proposed New Course Of Action |
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By Vadim Kotelnikov, Founder, Ten3 BUSINESS e-COACH, 1000ventures.com
"In the world of high technology, it's not what you've got, it's when you've got it. " – Jonathan Waldern
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Why Guiding Principles? Fast companies that have demonstrated the ability to sustain surge and velocity all have established sets of guiding principles to help them make quick decisions. Abandoning bureaucratic procedures in favor of a practical, down-to-earth list of guiding principles will help your company make the decision-making process much faster. Only one question will need to be asked of any proposed course of action: Does it fit our guiding principles?1 Guiding Principles Defined Guiding principles are the law that serves as a basis of reasoning and action, a personal code of conduct that leads, shows the way and directs the movements of your organization. A set of guiding principles has value and makes you faster only if the do the things this definition implies. Case in Point Charles Schwab Charles Schwab pioneered seamless stock trading on Internet in 1996 – much faster than their large competitors – and went from a tiny firm to the world's largest financial services company. The company's leaders believed that online trading was going to become huge. Acting with lightning speed in accordance with Charles Schwab's Guiding Principles – always own the core technology; reinvent the business; and constantly improve what you do, – the company made fast decisions and was able to introduce online trading service e.schwab to the market within months of conception.1 Initially, Schwab offered two separate products: the new e.schwab online product where customers paid a flat $29.95 per trade and regular online accounts where customers were charged 20% less than is a Schwab rep did the deal. Schwab's front-line personnel felt that customers were confused about the dual pricing structure, and they wanted both full service and $29.95 trades. Pottruck and Schwab, the company leaders decided to end the dual pricing structure and merge e.schwab into the organization. Though internal documents showed that by moving to flat-rate pricing the company could take a first-year financial hit of $125 million, the Pottruck and Schwab were able to make this tough decision quickly as one of the Schwab's guiding principles stated that they would be willing to risk short-term revenue growth if it was right for the customer and ensured long-term success.
Establishing Fast Decision-Making Process... Living the Guiding Principles... Making Quick Decisions... Letting The Best Idea Win... Idea Management...
Case in Point
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Bibliography:
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"It's Not the Big that Eat the Small... It's the Fast that Eat the Slow", Jason Jennings and Laurence Haughton, 2000
