Designing Clara's Operating Principles

Originally published on the Clara Labs Medium-hosted blog (now defunct).

TL;DR

Just as we closed our Series A financing at Clara Labs, we articulated a set of operating principles. Though there is a lot of helpful material online about principles at a high level, this post is meant to give you exposure into the raw creation process: why we did this project, how we did it, and how you can do it too. Lastly, here is a template document you can use to run this process on your team: Operating Principles Formation Template.

Why identity matters

First, a short story

Internships are great places to study how companies instill culture. My favorite story to share about this is from my first internship, at Apple. During orientation, the recruiter spoke to us about the care that Apple took in figuring out the wording for interns’ offer packets. She relayed how her team had debated the cover letter copy for hours, and ultimately chose the opening line of “Ah, paperwork” to reflect Apple’s “necessary evil” attitude toward paperwork. Her message was clear: at Apple, we painstakingly sweat the details.

Clara’s reasons for doing

My experiences at Apple made me believe in the power of reinforcing a well-articulated cultural identity and set of beliefs. However, when in a company’s lifetime is the right time to begin formalizing cultural identity and beliefs? Too early, and you won’t have enough experience as an organization to reflect on. Too late, and you may lose the cultural cohesion cultivated by the early team and founders. At Clara, we decided this inflection point was right as we raised our Series A.

In advance of this organizational growth spike, we wanted to lay down a framework that would enable us to build a great team, fast. In our view, the goal of principles are to help incentivize consistent behaviors (hiring, rewards, discipline, decisions, time investments, interactions with others, etc.) in a scalable way (i.e., not hundreds of ad-hoc interactions). Our hypothesis was that this would enable more autonomy for current team members and empower us to communicate externally who we were, helping us recruit great people.

A few words of caution

Before we get into how we designed our principles, let’s articulate some reasons not to take on defining your principles. Doing it poorly can be more harmful than helpful. Your biggest enemy is apathy from the team: if people don’t buy into the principles, you can discredit yourself.

• Principles are not a magic bullet to solve business or customer problems. They can, however, help solve a specific problem around recruiting, scaling, and retaining a strong team.
• “Company X that I worked at has principles, so we should too.” This is divorcing a solution from the context in which it originated to solve some context-specific problem. If you can’t clearly articulate what specific problem you’re hoping to solve with principles, don’t try to design them.
• “It seems pretty easy to just write out a short list of principles we believe.” This is an underestimation of how much time it takes to define your principles; for a team of only 15, we timelined out 3–4 weeks, and one of our founders spent about ~15 hours on the project.

Unearthing an identity

Once we determined we were prepared to define our principles, we needed to first figure out what success would look like. Here’s a list of the most helpful articles we found:

• http://firstround.com/review/to-grow-faster-hit-pause-and-ask-these-questions-from-stripes-coo/
• http://firstround.com/review/draw-the-owl-and-other-company-values-you-didnt-know-you-should-have/
• https://open.buffer.com/creating-values/
• http://firstround.com/review/80-of-Your-Culture-is-Your-Founder/

From this research, we determined that successful operating principles would fit the following criteria (henceforth referred to as The Essential Criteria).

• Memorable: Easy for the a team member to remember.
• Actionable: Easy to integrate in a team member’s day-to-day decision making.
• Credible: Already true, not aspirational.
• Distinct: Not everyone believes in this.
• Authentic: Beliefs that founders and core team members have real conviction for.

In short, they would need to be concisely articulated, already true, differentiating, non-obvious opinions we have conviction for. To achieve this, we outlined and executed the following five-step process:

• Audit and Introspect
• Synthesize
• Present and Gather Feedback
• Iterate
• Ship

Audit and Introspect

To develop principles that were credible, authentic, and distinct we needed to start by surveying ourselves, our team, and our time.

Organizational Audit: The easiest way to figure out what you value is to look at what you make time for outside of “doing work tasks.” We wrote down a list of everything we do at the company, from how we organize our space to events we make time for as a team.

Founder Survey: While we didn’t want to design our values by committee, we did still believe team input was crucial to the success of this process. To enable this balance, we first cropped the questions from Molly Graham’s post (copied below) and both the co-founders — Maran and myself — answered them in a document.

• What are my strengths? What am I outstanding at? What sets me apart from the people around me?
• What am I bad at?
• What do I value about the people around me? When I look at my friends, what are the characteristics they have in common?
• What qualities drive me crazy about people?
• How do I make my best decisions? (Think of a recent decision you made that had a good outcome. What process led to that?)

Team Survey: We then designed a simple Google Form (see template for the text) and asked the team to fill it out within a week so we could integrate their perspective and check overall alignment between our answers and theirs. Giving folks a clear deadline and communicating that they should spend a nontrivial amount of time on this is important for the feedback to be useful.

Synthesize

With the above three data sources now recorded, we began the synthesis phase. The goal of this phase was to cluster the recurring ideas from the three sources of feedback into potential principles, and it gets messy. We focused first on clustering concepts before prose-writing to ensure we were capturing the key ideas.

Clustering: This involved a lot of copy/pasting from the three inputs bullets in a doc. We focused on breadth-first, as opposed to trying to prematurely decide what felt “right” and “important”. At this point, we had eight common clusters. If you’re interested, we’ve included the raw form in our template.

To keep the principles memorable, we wanted to get the number of clusters down to seven. We also needed to make each cluster more focused, as the above list was a bit chaotic. So I sat down with my co-founder to talk through what felt strong and what felt weak about each cluster, simultaneously testing against The Essential Criteria.

• While “highest-common-denominator culture” did come up across a few people on the team, it wasn’t a principle that the founders felt authentic conviction for, so we axed it. The principles will be more successful if the founders, often playing the role of chief evangelizers, deeply believe in them.
• Transparency was something that came up from a few folks on the team, and it’s true — we are fairly transparent. But when we thought about it, we realized that what we deeply care about is giving people useful context: transparency is an aide to empower people to learn quickly, not the end in itself.

Prose-Writing: Once the ideas were down, language became critical. Developing language for principles is hard because you have to turn an abstract concept into an actionable, memorable phrase that highlights the most important points to the team. We settled on a couple hard and fast rules:

Each principle should have two parts, a short “slogan” (< four words) and a one to two sentence description. The slogan should start with a verb (helps make it feel actionable), and the length helps make it memorable. You can see what our prose ended up looking like here.

Present and Gather Feedback

Once we had prose for each of the principles, we were ready to share them with the team to get feedback. We had a 14-person team at the time, so we coordinated an offsite that culminated in an initial principles presentation for feedback. This is what our initial presentation to the team looked like.

While we did start out by talking about the goals of the principles, my co-founder and I underestimated the importance of making sure everyone fully understood, at the beginning, what we wanted the principles to accomplish for our team. We ended up needing to clarify halfway through the presentation that these were not intended to inform product decisions, but rather how we think about solving problems.

We then went through each principle and its prose one by one: how we arrived at it, what it meant, and examples of how team members have exhibited them in the day-to-day. Lastly, we presented a slide that had all the principles on one screen, so folks could connect them all together to see how they worked as a whole. We collected feedback from the team one person at a time, listening carefully and taking verbatim notes to review later instead of trying to defend our presented principles.

Iterate with feedback

Now we had two assets: the current working version of the principles and three pages of near-verbatim notes on the team’s feedback. We grouped the notes into clusters of feedback, and then figured out which clusters we wanted to address by changing prose, removing/adding principles, or by better framing the principles. Here are some highlights of feedback from the team. Based on the team’s feedback, we made the following modifications to the principles:

• We combined “develop testable hypotheses” “design for peer review” “solicit feedback” and “focus on learning” while addressing the comment about speed being important by fusing these into one principle we named “accelerate learning”. We liked this approach because it reduced the number of principles down to four, keeping them memorable, while maintaining the ethos of what we care about: learning fast.
• We removed “be persistent,” because while we believe it is a shared trait on the team, we ultimately care more about learning fast than we do about persistence for its own sake.
• We changed “take initiative” to “speak truth to power,” because more so than hoping someone fixes a problem when they see one (which could perpetuate poor organizational structure), we believe in encouraging and supporting the vulnerability required to speak out against something you feel is off or wrong.
• We added “invest in relationships” to address the feedback around how we should act toward each other. We loved this principle because it felt consistent. Clara as a product interacts with our customers’ relationships, and it’s essential that Clara does not treat people transactionally. By the same token, we as the team members behind Clara need to ensure that the interactions we have with each other, with our customers, and with our contractors all feel like relationships we are investing in.
• “Respect constraints” remained unchanged. Focusing on context and constraint has been a consistent part of how we’ve worked since the beginning of Clara. Rather than prescribing a “move fast, break things” or “make things perfect” culture, we prefer to understand what a specific situation calls for and what resources we have available to come up with a solution.

Ship

Once we addressed all feedback, we did a final litmus test against The Essential Criteria. They all passed, and Maran and I felt confident in representing and fighting for the principles. We decided we were done, for now. Here was the final product:

It’s been two months since we completed our operating principles exercise, and we’ve already noticed some encouraging impact.

• People on the team reference the principles conversationally. We’re incredibly excited about this because it means they are both memorable and actionable, key parts of The Essential Criteria.
• As we interview candidates, two of the more common questions are “what is it like to work at Clara” or “what is the culture like at Clara.” We used to have relatively ad-hoc (though still authentic) answers. Now, we’re able to communicate much more consistently and confidently when people ask about what it’s like to work here.
• We recently wrote a blog post about a faulty experiment we ran internally, because it’s consistent with our desire to “accelerate learning”, in that same sense — sharing this blog post is also connected to that principle.
• We’ve integrated the principles into our bi-monthly team all hands meeting (Clara Introspects — yes, we do anthropomorphize all our calendar events). We spend five or so minutes calling out positive examples of recent behaviors or actions on the team that strongly exemplified the principles.
• We’ve integrated the principles into our performance reviews, and have started to give feedback against the principles.

One thing we haven’t done is stick posters with these principles displayed all over our office. We’re wary of getting gratification without actually integrating them into our work.

Overall, the operating principles process has driven a lot of clarity for the team at Clara. If this is something you believe you could benefit from, we hope this post serves as a helpful reference, in addition to the Operating Principles Formation Template. If you end up using this template or a variant of this process, we’d love to get your feedback.