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Chapter 1 | Principles Guidebook

Why Decision Principles?

Decision Principles enable leaders to empower effective decisions without having to control everything.

When success demands speed and flexibility, how can leaders let go of control and still get the results they want?

Decision Principles empower people across an organization to make decisions when they come to a “fork in the road”: a situation or dilemma where the best solution is impossible to predict in advance.

A recipe for whiplash

Many organizations oscillate between centralized and decentralized decision-making, leaving people disempowered.

Let’s say your company’s executive team wants to increase innovation to keep up with fast-growing new digital competitors disrupting your industry.

Word comes down that they’re going to flatten the organization and empower everyone to be more agile and take more risks. Everyone gets excited about the possibilities, and a bunch of projects get launched.

After a few months, though, the executive team looks around and sees chaos: What are all these new projects, and why aren’t they better aligned with business goals?

So the executive team yanks back top-down control, taking over some projects and ending the rest.

Those whose projects get killed or micromanaged can’t help wondering why management let them take the initiative in the first place.

And everyone is a lot less enthusiastic a few months later when, inevitably, the executive team starts talking again about empowerment and agility.

Does any of this sound familiar?

This kind of whiplash is caused by oscillating between two competing mental models of how to operate a company: hierarchy and network.

Hierarchies and networks each have their advantages. But you can’t run an organization by careening back and forth between them.

From hierarchy to network

In the 21st century, where success demands speed and flexibility, a company with a bias toward hierarchy is at a disadvantage.

In the 20th century, a successful company was one that was large, stable, and above all hierarchal. The very definition of a well-run company was one run from the top, with orders filtering down through the org chart one level at a time.

Yet when information about actual market conditions and customers satisfaction has to percolate back up from the company’s distant edges, it often reaches the top too late for meaningful action.

The larger a top-down company is, the slower and less agile it is—and the harder it gets for top management to let go of old models of what a company should look like.

Today’s market is data-driven and highly interlinked. You have multiple connections to your customers, and they have multiple connections of their own, both internally and with each other. So do your competitors.

As organizations as diverse as Amazon, Wikipedia, and the U.S. military have discovered, it takes networked thinking to serve a network—or to compete with one.

Compare mental models: Hierarchy vs. network

Hierarchy excels in creating alignment: coordinated activity to achieve organizational goals.
Networks thrive on autonomy: the ability of individuals to act in response to local conditions.

In a hierarchy, decisions are centralized to stay aligned to corporate goals. Information flows up, authority and decisions flow down, and people remain in their organizational silos.

This model keeps decisions and actions aligned with business goals—but being told what to do can disempower people and impede their agility and responsiveness.

In a networked model, decisions are pushed to the edge of the organization to be more responsive to market demands. Information is shared laterally, relationships are more fluid, and peer-to-peer connections and actions don't require a superior's permission or direction.

This model gives people more autonomy to make faster, better-informed decisions so they can handle complex issues quickly—but it also leaves them a lot of room to move in the wrong direction, creating chaos and steering the company away from its goals.


Flocking behaviors

The birds shown here are starlings and their flocking style—known as a murmuration—is unique in nature.

As a murmuration of starlings swirls through the air, no individual bird seems to be in charge. But when the flock needs to change direction to find food or dodge a hungry predator, all the birds somehow move together in perfect synch at high speed like a single organism.

Computer modeling of starling murmurations taught scientists that this level of agile coordination is achieved through three simple directives:

  • Stick together
  • Follow neighbors
  • Don’t collide

The interaction of these three principles generates the rapid and complex behavior of a murmuration.

The starlings have a clear Shared Purpose to stay alive, and instinct allows them to achieve that through a balance between alignment and autonomy. No one has complete control, but everything is under control.

What does that look like in the human world?

Alignment + autonomy = empowerment

How can leaders let go of control and still get the results they want?

The shift to managing by principles is more than a tactic. It's a new mindset for management.

The question for leaders of networked organizations is how to design systems that produce distributed, empowered, aligned leadership—an emergent property, like the shape created by flocking birds.

The key is to replace processes and rules that control behavior with principles that empower decision-making.

Instead of making decisions for others or delegating decisions to them, it's about creating principles with them so they can make decisions for themselves and their circumstances.


Nupedia / Wikipedia

Did you know that Wikipedia is actually Jimmy Wales’s second free, crowdsourced, online encyclopedia project?

His first attempt was called Nupedia. Anyone could submit an entry, but a small team of editors reviewed each submission and decided which to publish.

You can probably guess what happened: more submissions poured in than the editors could keep up with. A year after launch, they had only managed to approve and publish 21 entries.

Clearly, Nupedia wasn’t designed to scale. So Wales removed the bottleneck of the editorial team. He redesigned his site as a wiki—a website built on software that lets users edit the content collaboratively—and renamed it Wikipedia.

Then he declared that not only could anyone contribute entries, but they could review and edit other people’s. By the end of its first year, Wikipedia contained 18,000 entries and was growing fast.

A site that literally anyone can change at any time could easily collapse into chaos, but Wales took a crucial step to ensure its success as a networked organization: he shifted from managing by people and processes to managing through purpose and principles.

Wikipedia’s Five Pillars

Wikipedia is led by a set of principles they call the Five Pillars.

1. Wikipedia is an encyclopedia
2. Wikipedia is written from a neutral point of view
3. Wikipedia is free content that anyone can edit, use, and distribute
4. Editors should treat each other with respect and civility
5. Wikipedia has no firm rules

As Decision Principles, the Five Pillars guide users toward a common objective: creating a comprehensive, reliable, accurate source of information.

The first principle lays out the strategy: it’s an encyclopedia (and therefore not a dictionary, or a thesaurus, etc.)

The fifth one is itself a commitment to governance by principles instead of rules.

Together, these five principles give the community a lot of freedom to decide how and what to change, including the principles themselves as needed.

But that freedom does not mean chaos or anarchy. The Five Pillars are authoritative, and any content that violates them quickly gets fixed or removed by members of the community.

The power of Shared Purpose

Shared Purpose and a clear, strategic narrative are what keep everyone headed in the same direction.

Many hands touching and overlapping as they reach towards a central point.

You can learn more about Shared Purpose in the Narrative Guidebook

A flock of birds can move fluidly together because they have a Shared Purpose—to stay alive—and a set of simple principles to achieve it.

In an organization, Shared Purpose is a common intention that connects a company with all its stakeholders, including employees and customers.

Unlike a flock of birds, your Shared Purpose is something bigger than just staying alive. It’s what your organization does WITH other players, not just what it sells TO or does FOR them.

Shared Purpose keeps everyone in your organization aligned on what you’re all creating together.

Imagine an organization where everyone does what you would have told them to do if you were there.

Better yet, imagine them doing what you didn’t know you wanted them to do until they did it.

And imagine their decisions are aligned with organizational goals and objectives, even though no one was there to direct them.

That’s what leading from principles and purpose can achieve.


Military Doctrine

To fight effectively, soldiers need to act together and follow orders. What civilians often don’t realize is that soldiers also need to be able to make quick decisions on their own and improvise in many circumstances.

In battle, the rapidly changing and chaotic circumstances cause what's known as "the fog of war." Communication in real time between military leaders and troops can be sporadic at best, and often there is no time to wait for orders when lives are at stake. Since any strategy planned beforehand can't be updated to respond to surprise developments, the fog of war can turn straightforward orders and well-considered tactics into a confusing mess.

To cut through the fog, individual soldiers need to interpret orders in a way that keeps them aligned with battle objectives, even when they can’t check in with someone higher up the chain of command.

NATO's term for decision principles is doctrine, which they define as: “fundamental principles by which the military forces guide their actions in support of objectives. It is authoritative but requires judgment in application.”

Military doctrine pushes decision-making closer to the front lines by helping soldiers adapt quickly to current circumstances.

“Authoritative but requiring judgment in application”—is a great way to describe a balance point between alignment and autonomy.

Decision Principles should provide the combination of empowerment, clarity, and direction it takes to make that balance work.

“In the absence of guidance or orders, determine what they should have been
and execute aggressively.”

—Traditional military precept, quoted by General David Petraeus

Rules and Processes

Have a very specific destination or outcome in mind

Tell you exactly what to do

Work best for rigid boundaries and predictable situations

Are based in compliance and hierarchy

Are inflexible

Decision Principles

Set a direction, rather than a destination

Offer guidelines for improvisation

Work well where creativity, agility and critical thinking are important

Are based in adaptation and networks

Are highly flexible

Principles defined

Principles guide actions in support of objectives. They are authoritative but require judgment in application.


  • Guide actions in support of objectives: Assuming that you already know what your objectives are, the purpose of Principles is to determine how best to achieve them.
  • Authoritative: For principles to work, you must abide by them, regardless of circumstances. The ends do not justify the means; it’s not OK to stray outside their parameters, even—especially—when doing so makes achieving your objectives easier.
  • Require judgment: As long as you don’t violate your principles, you should use your own judgment in putting them into practice. In fact, you should apply all of your creativity and innovation to that task.

Help for the “forks in the road”

Principles provide guidance for moments when it’s impossible to say in advance which way to go.

Not all decisions call for Decision Principles. In situations where it’s possible to know in advance which way to go, rules and procedures can work just fine.

Decision Principles empower people to make decisions when they come to a “fork in the road”: a situation or dilemma where the best solution is impossible to predict in advance.

Use Decision Principles when there are two or more viable options, and people need guidance to determine which will best fulfill the mission and purpose of the organization—for example, serving customers vs. investors, short vs. long term, local vs. global.

Principles help people handle gray areas and make judgment calls. They empower people to make decisions without having to escalate up the hierarchy to ask for guidance or signoff.

Principles provide a distributed governance model for networked organizations. They can transform empowerment from a buzzword into a living part of organizational culture.


Principles at Amazon

In its Leadership Principles, Amazon makes it clear in the very first paragraph that its principles are authoritative.

“Our Leadership Principles aren't just a pretty inspirational wall hanging. These Principles work hard, just like we do. Amazonians use them, every day, whether they're discussing ideas for new projects, deciding on the best solution for a customer's problem, or interviewing candidates.”

In other words, Amazon expects every employee, from the warehouse to the C-suite, to abide by the principles it sets out.

For example, Amazon's first principle is "Customer Obsession:

Leaders start with the customer and work backwards. They work vigorously to earn and keep customer trust. Although leaders pay attention to competitors, they obsess over customers."

Many companies say they’re customer-centric, but Amazon’s principles make it clear which way to go when employees have to choose between “We’re going to focus on getting our customers to want what we provide” and “We’re going to focus on providing what customers want.”

The message here is clear: as long as employees remain in alignment with the principle of starting with what customers want and prioritizing it above all else, they have the autonomy to do what they think is best in a given situation.


Opportunities for empowerment

Think about contexts in your organization where more empowerment is desired, along with any obstacles to that empowerment. Reflect on and discuss these questions with your team. Use this worksheet to record your thoughts.

Where do people in your organization want to be more empowered to make decisions? What is getting in the way?
Where does leadership want people to take more initiative? What is getting in the way?


Through Decision Principles, leaders can count on effective decisions without having to control everything.

  • Many organizations oscillate between centralized and decentralized decision-making, leaving people disempowered.
  • In the 21st century, where success depends on speed and flexibility, a company with a bias toward hierarchy is at a disadvantage.
  • Shared Purpose is what keeps everyone headed in the same direction.
  • In the NATO definition, principles guide actions in support of objectives. They are authoritative but require judgment in application.
  • Principles provide guidance for moments when it’s impossible to say in advance which way to go.