Successful companies have clear shared beliefs about their world

A company should be a collection of people who have a similar understanding of the world. These beliefs shape the things that the company does. This is because our common beliefs about the world unite us with our peers (they make us a kind of tribe). They highlight opportunities that we can only tackle by working together.

Establishing your beliefs can be an incredibly powerful process. However, it also presents challenges of communication. I originally came across this concept in some information about Spotify operates. I’ve since refined my thinking on this for how it applies in Pusher.

Beliefs are ideas we all accept to be true

Beliefs describe how we understand the world to be. Beliefs hint at opportunities and threats. They also suggest what the outcome of a given kind of action might be. This might be expressed as:

Given that we believe X is true, we should do Y

Having beliefs allows us to substitute other actions for Y in the statement above. Creating a shared context allows people to find new ways of contributing value.

Beliefs come in many forms:

  1. Trends and statistics (“We believe demand for software is always growing”)
  2. Observations/experiences (“We don’t think developers like being sold to directly”)
  3. Causal links (“Because there is more software needed, but a finite supply of developers, there is an opportunity to help”)

I’ve found it helpful to think of them as rules or facts. This is generally how we communicate them. However, some caution needs to be applied.

Often our beliefs are only an intuition of how things are. We can’t limit ourselves to believing things that are measurably true. What’s more, doing that wouldn’t necessarily be desirable.

Opportunity often exists in the gap between what most people believe to be true, and what an entrepreneur imagines instead.

Beliefs lead to easier decisions and actions

The world is a very complicated place. We can’t reason from first principles on everything we do. We have to have some common assumptions that make decision-making easier. Some of those assumptions are based on incomplete knowledge. This is just the nature of things.

As hinted at above, the primary thing you can use a set of beliefs for is taking action.

We can use our beliefs to decide what change we want to have on the world. These changes are our goals. These goals are often the result of opportunities or threats we have observed. When we make goals, we should take care to link them to our beliefs: “Because we believe X, we will try to Y”.

Often the opportunities (or threats) are so large, that we can only do something with them in steps. This is where planning occurs. Each step in our plans can be in harmony with our beliefs.

Shared values or behaviours are another thing to spring from our beliefs. They also help decision-making, but they do it in a different way. They are another shortcut, because they aim to tell us how to act consistently in various situations.

If you can’t infer a course of actions from our shared beliefs, just act “generously”, for example.

Gathering your own beliefs

Gather your beliefs by running through the things that you know about the world. You can limit this output by viewing it through a given prism. The challenge is to make sure that the beliefs are relevant and specific (“We believe most tomatoes are red” is unhelpful to most companies).

You might start this process with a question such as:

  • What do we believe is true that makes it necessary for us to form a company?
  • What do we believe is true about our customers that will lead to our success?
  • What do we believe about our approach to building a company that will make us successful?
  • What do we believe about the way people buy products like ours that will let us reach more of them?

Make your beliefs unique. The most effective leverage comes from having a contrarian view. Your most potent beliefs can likely be expressed in the form “Contrary to most people who believe X, we believe Y”.

This is not to say that you list things that are completely unbelievable. It does mean that you should list things that you have less certainty about though. Taking a punt on something you are uncertain about while everyone else waits for more information is the key to the entrepreneurial endeavour.

Split up your beliefs to different areas. There is no limit to the amount of areas where you can try to clarify your shared underlying assumptions. If being shared widely, you do want to avoid information overload, or having conflicting beliefs.

I’ve experimented with the following, but I think we could do more within the company:

  • Company beliefs (why our company exists)
  • Commercial beliefs (the conditions that allow us to make money)
  • Product beliefs (the reason why people value our product)
  • Operating beliefs (our beliefs about operating that will lead us to success)

From a practical point of view, there’s something satisfying from having a common form factor for the beliefs. You may want to repeat the following prefix: “We believe X”.

I’ve experimented with chaining beliefs to be even more emphatic about your points. “We believe X is true. This means that we also believe Y is true”.

Beliefs require faith, but they can be changed

Finally, it’s really important to keep an open mind towards your beliefs. This is perhaps the hardest part to master as a human. We have to act with a confidence that implies all our beliefs are true. As I pointed out earlier, this is made more problematic because innovative companies assert beliefs that have a probability of not being true.

Operating with conviction without certainty is difficult. You have to drink your own koolaid. You also need to periodically break out of the spell to look at things rationally.

This is where iteration is involved. Our beliefs should become more certain over time. Beliefs that have ceased being believable should disappear. New optimistic assertions should be waiting in the wings.

To me, this is the basis of one of my favourite mantras: strong opinions, weakly held.