Ten Principles for How to Run a Company

Author: Niko Canner URL: http://www.onhumanenterprise.com/ten-principles-run-company One-line: The one page you’d write to describe what it means for a company to be managed well — a standard the board can hold the company to. Leadership Playbook: Leadership

The framing

You’ve invented something that will change the world. But you have weeks left to live. She asks you one thing: would you write one page that describes what you believe it means for this company to be managed well, which I and the board can then use as a standard to which we hold the company and ensure is always maintained?

The ten principles

1. Articulate a destination that’s deeply compelling and far beyond our current grasp.
2. Define an agenda of what the company will actively execute that stretches it beyond current capabilities, while ensuring must-dos are achieved and leaving enough slack to preserve time for reflection.
3. For each part of the agenda (except where there’s an explicit choice to defer or pause), ensure that there is a sponsor who can formulate a brief — what outcomes, by when, subject to what constraints.
4. Give owners room to shape their path to deliver on the brief. #Accountability
5. Ensure sponsors and owners regularly and actively review their degree of confidence that the brief will be achieved (green, yellow, or red) and the reasoning behind their assessments. #KPI

   Kyle: “When performance is measured, performance improves. When performance is measured and reported, the rate of improvement accelerates.” — Thomas S. Monson

6. Acknowledge explicitly where there needs to be tension between different objectives.

   Kyle: “The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function.” — F. Scott Fitzgerald

7. Articulate the patterns of how to operate well that will most strengthen and preserve the company over the long term — principles and practices.

   Kyle: People create systems and systems create companies. Systems Thinking Find the Quote

8. Conceptually separate the management of people and their careers from the role of sponsor, whether played by the same or different managers. mentorship My Mentors
9. Maintain a strong discipline of observing when outcomes diverge from expectations.
10. Give every member the context, information, and voice to raise the issues and opportunities they see — a right to share perspectives and reasoning, but not to make the decisions that belong to sponsors and owners. Default to transparency

How it connects

• Niko Canner — author.
• Leadership / Systems Thinking — the management-as-systems throughline (“people create systems and systems create companies”).
• Thomas S. Monson — the measurement-improves-performance quote Kyle attached to principle 5.
• F. Scott Fitzgerald — the “two opposed ideas” quote on holding tension (principle 6).
• Default to transparency — principle 10’s information-and-voice-for-everyone idea.