Principles and Universal Laws

Universal laws are the ones that operate whether you approve of them or not. Principles are the ones you choose and then have to pay for. Principles can be dropped whenever holding them gets expensive.

A business run on stated principles makes hard calls quickly and consistently. A business without them relitigates every decision from scratch, which is exhausting for the owner and impossible for everyone else to predict.

Three universal laws

Each of these laws has a time lag between the action and the consequence.

Cause and effect

Every result in your business has a source, including the ones you would rather attribute to the market. Use it to work backwards from a result you want and ask what would have had to happen first, and by when.

Compounding

Small actions repeated over time produce outcomes that look sudden from the outside. Two hours a week on one thing is roughly a hundred hours a year — two and a half working weeks — aimed at a single subject.

Sowing and reaping

You harvest what you planted, in the quantity you planted it, at a time of the harvest’s choosing. Plant nothing in your pipeline in March and the gap shows in September, by which point it feels like bad luck or a soft market.

What makes something a principle?

A principle is a standard you have decided to hold, in advance, regardless of what the specific situation offers you for dropping it. A standard you only hold when it is convenient is a preference.

The price test checks this. Take any principle you claim and ask when it last cost you something real: money, a client, a friendship, a comfortable evening. If nothing comes to mind, you have not yet held that principle, you have only stated it. It is better to find that out in advance than under pressure.

Principles also have to be few. Keep three or four that govern decisions. Long lists are a sign that nobody has had to choose between them yet, and choosing between them is exactly what happens the first time two collide.

Why written principles let you delegate judgement

Written principles are the only way to delegate judgement rather than tasks. Hand somebody a process and they will handle the situations the process anticipated. Hand them three principles they have watched you pay for and they can handle the situations nobody anticipated.

That is what lets you trust a team with an unhappy customer at half four on a Friday.

A worked example

Illustrative arithmetic rather than a client. Take a contractor turning over roughly £2m with a stated principle: we do not take work we cannot resource properly. Nobody has tested it in two good years. Then a quiet quarter arrives with the order book about £300,000 lighter than planned, and a £240,000 fit-out comes in with a start date that would need two subcontract teams the firm has never worked with.

Version one, where the principle is a preference. They take it. The unfamiliar teams are fine at the rough work and poor at the finish. Snagging runs weeks past handover, retention sits unpaid into the next financial year, the contracts manager works most weekends, and the client who was going to be a repeat customer is not. None of that gets recorded as the cost of the decision.

Version two, where the principle is real. They decline, in a quarter where the owner can feel the gap in the numbers. The estimator now believes the rule, so he stops putting borderline work up the chain. The contracts manager stays. And the client comes back later with a smaller job that fits, having noticed that this firm says no.

Version two costs real money in the quarter it happens.

How to make yours real this week

1. Write three. Each one must be capable of losing you money. "We are professional" cannot. "We tell the client about a problem the day we find it" can.
2. Price each one. Against every principle, write the last time it cost you something and what. Any principle with a blank next to it is untested.
3. Find the collision. Work out which two of your principles will eventually conflict, and decide now which wins. Deciding under pressure, in front of the team, is how principles get quietly repealed.
4. Say them out loud to the team, with an example. Tell them the specific occasion the rule cost the business something.
5. Work one law backwards. Take a result you want in six months and write down what has to be planted in the next fortnight for that harvest to be possible. Then put it in the diary.

Common mistakes

The first mistake is confusing values with principles. Values are what you would like to be true about you. Principles are what governs a decision when the money is on the other side.

The second mistake is expecting the laws to be negotiable and the principles to be free: the laws apply regardless of your intentions, and a principle costs money to hold.

Questions to ask yourself

• Name a principle you hold. When did it last cost you money, and how much?
• Out of 10, how consistently would your team say the stated rules and the real rules match?
• What are you currently harvesting that you planted eighteen months ago, and what are you planting now that you will have to eat later?
• Which two of your principles have not yet collided, and which one will win when they do?

Where this fits

This is foundation work in Personal Coaching — how you think, decide and lead yourself, before anything else in the business gets easier. It pairs directly with Purpose and Values, which turns the same idea into rules a team can be recruited and managed against, and with The Results Mindset, which is what stops a lagged consequence being written off as bad luck.