Founding Principles- the Reality

Founding Principles- the Reality

Founding Principles- the Reality


An entrepreneur has to face new challenges with each passing day. These challenges can relate to cost minimization to accessing new product markets. During all this, your founding principles are the biggest asset that helps you decide the right option, as well as providing you with a competitive advantage.

What does founding principle mean?

Unlike popular belief, founding principles are something to be published in your company’s websites or brochures. These are the moral and ethical principles that your company is based upon. These form the basis of your company structure.

These are not just some words, they provide help in the decision-making process; determination of the organizational culture, in addition to maintaining respectable customer relationships. They should be included in every one of your business ventures.

Andy Smith, the writer of the famous book ‘Dragon Fly Effect’, also comments on this, and says that these principles should be adopted from the core of the business; otherwise no one would believe in them.

Importance of founding principles

If acted upon, your company’s founding principles can be your biggest asset. It gives you the following benefits over other companies:

  • Distinct identity: Common values give an initiative to your customers to pick you over numerous other brands in the market. It makes you stand out. Customers prefer to interact with companies with whom they can relate on a personal level. According to Smith, in a commodity market, where everyone is looking to sell the same item, making yourself appear different is important.
  • Employee motivation: Pay is not the only motivating factors. Smith regards a healthy work environment as an important factor as well. A company whose culture is based upon its founding principles attracts better qualified and imaginative employees. People might be willing to work with less pay, if they like your company atmosphere.
  • Instills brand loyalty: People feel more confident spending their money on the brands they trust something common with. A business, with clear and understandable principles, is more trustable in the eyes of everyone. Smith defines this as the key to ensure a brief period of brand loyalty.
  • Stronghold in changing conditions: Smith says that when going through any change in the company, one of your feet should be supported by your core values. They can help you decide the right options and strategies to prepare for the change.