Principles versus policies

All businesses should have a core set of principles, and policies should follow after that. It’s easy to conflate the two, and it can be dangerous if you do.

I recently heard Adam Grant share the story of Robert Reffkin of Compass, and how this kind of overlap between principles and policies caused some problems there. Compass is a real estate brokerage, and Reffkin wanted to set it apart by not paying commission to his staff and just paying a flat salary. Some time down the road, Reffkin had to change the policy and lost a lot of employees because of it.

As Grant put it, Reffkin’s principle was to value his agents more highly than others and do it in a fair way, which was noble, but people only heard about the “no commission” policy and were upset when Reffkin “changed his principles”.

Treating clients right

After hearing it explained that way, I realized that this is something I flirt pretty close to the edge with and need to be careful of doing. At GreenMellen, one of our core values is to always do the right thing for our clients, even if it comes at a cost to us. That’s the principle.

The policies around that are things like not making our clients sign monthly contracts and not putting our link in the footer of client sites. I think it’s important to make that distinction…