Principle Based Management™ (PBM), formerly known as Market-Based Management®, provides a holistic approach to making decisions, solving problems, and creating value for individuals in your community, team members in your organization, and society at large. In this PBM 101 series, we’re unpacking mental models, ideas, and tools that can help you reach the next level in your work.
It is not uncommon for nonprofit leaders and passionate changemakers to get lost in the weeds of day-to-day demands such that they lack clarity on the problems to solve and priorities needed to solve them. This is a perfect moment to use the Five Dimensions of Principle Based Management™ as a diagnostic guide.
Use the following questions to consider a project, program, problem, or opportunity from the perspective of each of the Five Dimensions, and then prioritize how you address specific problems or opportunities related to your situation. This type of analysis can also be used before you start a project, as well as while the project is running and after it is completed.
Important note: Some aspects of this process might be more meaningful for your situation (and your analysis) than others. Similarly, there are likely additional questions that would help illuminate certain unique aspects of the situation. You should develop or modify these questions as needed. They are meant to help you be intellectually honest about what is going well, what could be going better, and how your individual contribution impacts the situation.
Vision
| “I’m worried that…” (some potential symptoms) | “It would be great if we could better…” (indications of progress) | Questions to Guide Discussion |
| Everything is a top priority There is a lack of shared direction There is lack of innovation We are often reactionary We are inconsistent or uncertain with how we allocate resources | Adapt in a dynamic world Focus employee’s creative energies toward a common aim Focus our efforts on long-term value for our customers and society Innovate at a faster rate than our competitors | How is success defined? What does “good” look like? What capabilities does the team or organization have? What capabilities are needed? How does this project or program align with the overall vision of the organization? |
Virtue & Talents
| “I’m worried that…” (some potential symptoms) | “It would be great if we could better…” (indications of progress) | Questions to Guide Discussion |
| We don’t have an intentional culture that is defined, shared, and lived We don’t have a culture of initiative and responsibility Employees are not receiving intentional and ongoing feedback The right employees are not being hired or retained | Hold each employee accountable to clear standards of behavior and conduct Attract and retain employees that share our values Attract and retain employees with the necessary knowledge and skills Intentionally build a healthy culture that enables us to be more successful long-term | Which talents are most critical for success? How well is talent flowing to its highest-valued uses? What additional talents, if any, might need to be acquired during the course of the project? What signals would indicate if this is needed? How are you acquiring and retaining individuals who align with your stated culture?
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Knowledge Processes
| “I’m worried that…” (some potential symptoms) | “It would be great if we could better…” (indications of progress) | Questions to Guide Discussion |
| Employees don’t communicate with each other or hoard knowledge We lack clear profitable measures Decisions lack robust critical thinking and input from others Financial statements don’t fit economic reality | Collaborate more effectively across the organization Make reality-based decisions Measure effectively to generate the knowledge needed to improve Encourage and benefit from thoughtful experiments throughout the business | In what ways is knowledge being under shared? Over shared? Optimally shared? What measures need to be established (and when) to determine progress towards the overall goal of the project? How is feedback sought and shared? To what degree are different ideas and perspectives openly discussed and considered? |
Decision Rights
| “I’m worried that…” (some potential symptoms) | “It would be great if we could better…” (indications of progress) | Questions to Guide Discussion |
| Things are slipping through the cracks People are in the wrong roles There is slow and poor decision making There is poor accountability People don’t know what they are responsible for | Encourage and benefit from entrepreneurship Clearly hold people accountable Leverage employee’s diverse strengths and interests Make better decisions quickly | Where do individuals lack clarity in what they are responsible for? How have people’s responsibilities emerged and/or evolved over time? How are individuals held accountable for their contributions? To what degree are individuals capable of creating value without being told what to do? |
Incentives
| “I’m worried that…” (some potential symptoms) | “It would be great if we could better…” (indications of progress) | Questions to Guide Discussion |
| There are problems with low morale/trust There is an entitlement mentality We are losing good employees We are unable to differentiate employee contributions and compensation We are not rewarding based on total contribution to the company Staff don’t value culture | Reward and recognize based on long-term value creation Attract and retain the right employees Motivate employees to passionately contribute to our long-term success Motivate and hold employees accountable to make positive contributions to our culture Select supervisors who embody and advance our culture | What individual contributions have most added to the project’s overall success? How do you know? How are individuals rewarded or recognized for their contributions? How are you motivating individual employees to meaningfully contribute toward your vision? How are you holding individual employees accountable to make decisions and behave consistently with your stated culture? |
Some Helpful Tips as You Get Started
- Consider which principles, mental models, and/or Guiding Principles help explain the problem or address the root cause(s)?
- Determine which aspects of each Principle Based Management dimension could be improved to best address the root cause(s) and resolve the problem.
- Prioritize the issues to solve at this point in time based on what is critical to your long-term success.
- After you’ve identified the root cause(s), what’s the next step you need to take to make progress?
