Loyalty informs how, not what.

Before framing up how I think about loyalty, let's start by defining it...

A strong feeling of support or allegiance.

At Archive.com we leaned into many of Ray Dalio's operating principles. An important one for decisions & reinforcing culture says loyalty is owed to the interests of the organization and never any one sub-faction or individual.

Don't let loyalty to people stand in the way of truth and the well-being of the organization.

Another good idea: it's a misconception that the work environment should be family like. Successful companies are run and feel like championship teams. Championship teaming means you can bench or cut under-performers.

If you're running your company like a family you can't fire mom or dad. When it gets dysfunctional, and it will – you may invest in some "family counseling" and conflict resolution but you have to be able to eliminate the drag on the org.

My principles on loyalty are as follows:

Loyalty informs the how, not the what.

Loyalty guides how you carry out a decision but not what decision you make. It often clouds good decisions for leaders & founders who feel a sense of commitment to those who were loyal to them early on.

Business and organizational decisions should never be informed or biased by loyalty. But loyalty should inform the standard of care governing the way you execute a decision especially those which are employee related.

Loyalty is, inherently, a human-emotional thing which we evolved over time in a tribal way. So people in organizations have strong emotional ties to their feelings on loyalty and will often ask how your company is rewarding it or at least thinking about it.

Loyalty is appreciated but cannot be rewarded as a standalone attribute.

How does the company think about loyalty? You know, I've been here for XX years and I feel like the company should give me a raise for my hard work and loyalty. Plus, Billy got promoted and I've been here longer.

In a high performance culture the only thing you can objectively and fairly incentivize is results and achieving outcomes.

The problem is that most employees think loyalty should be rewarded. That time spent on the job is grounds for promotion, new titles and pay increases Unfortunately, rewarding loyalty on it's own is the complete opposite of fair.

In reality, Loyalty in most cases is correlated with high trust, strong relationships and some level of meeting expectations. But it's not a pre-requisite for exceptional outcomes. So if someone has been at your company for 3 months and crushes their target but Jill who has 10 years with the company missed hers – you only reward the new kid – and Jill needs to figure it out.

In the long run, what is best for the organization, even if it's not great for me right now or at all?

You need to train and program people to think through the lens of the what's best for the org and nothing else. If decisions are consistently made in that way it becomes easier and easier.

Would love to hear your thoughts on this.

Adam