What is Principled Performance®?

The Ultimate Guide to Principled Performance®

Picture today's business world as a vast, storm-tossed ocean where organizations navigate through waters that shift and surge without warning.

This is the VUCA sea – volatile, uncertain, complex, and ambiguous – where even the most seasoned captains find themselves testing their mettle against unprecedented challenges.

Below the surface, many organizations are like ships with compartments that don't communicate – departments sealed off from each other like watertight bulkheads, crew members struggling to work in harmony, and a compass that sometimes fails to point true north, leaving stakeholders adrift and disconnected.

In these waters, maintaining course toward organizational goals while preserving integrity isn't just challenging – it's an art form that demands masterful navigation.

That’s where Principled Performance® comes in. Principled Performance®, a concept created by OCEG (Open Compliance and Ethics Group) in 2002, is more than just a lofty ideal; it is the compass that guides organizations toward ethical excellence, enabling them to reliably achieve objectives, address uncertainty, and act with unwavering integrity.

Together, we will explore the essence of Principled Performance®, the goal of any successful GRC strategy, and outline how it can shape the destiny of businesses seeking to thrive amidst the storms of uncertainty.

But first, what is Principled Performance®?

What is Principled Performance®?

Principled Performance® is a concept developed by OCEG that encompasses an organization's ability to reliably achieve objectives, address uncertainty, and act with integrity. It serves as a guiding philosophy for businesses striving for ethical excellence in today's world and is only achieved by implementing a GRC strategy.

There are 3 key pillars of Principled Performance, and they must be strong enough to hold up your organization. They are:

1. Principled Purpose: A principled purpose is perhaps the most basic starting point for principled performance. Defining your highest purpose via mission, vision and values guide everything that the organization does.
2. Principled People: Leadership, the workforce and extended enterprise must comprise principled people who have strong character, and who consistently direct their energies toward a principled purpose.
3. Principled Pathway: Break down silos and leverage common capabilities in every key system that keeps an organization on track including governance, strategic management, performance management, risk management, compliance management and audit management systems.

When Implemented, Principled Performance achieves 10 universal outcomes:

1. Achieve Objectives that Produce and Preserve Value
2. Balance Risk and Reward
3. Improve Culture
4. Enhance Stakeholder Confidence
5. Integrate and Improve Decision-Making
6. Prevent, Detect, and Correct Undesired Conduct and Weaknesses
7. Promote, Detect, and Reward Desired Conduct and Strengths
8. Sense and Respond to Context
9. Improve Total Performance
10. Honor and Express Values

Key Drivers of Principled Performance

Organizations face several common factors driving the adoption of GRC and its value throughout the business. These factors include:

• Stakeholder demand for high performance and transparency
• Evolution of the global regulatory landscape
• Exponential growth of Third-Party Risk Management needs
• Escalated costs of risks and requirements
• Lack of visibility across unidentified threats and opportunities
• Stakeholder demand for ethical excellence & Diversity, Equity & Inclusion efforts

OCEG’s Capability Model addresses all of the above concerns and more by empowering GRC Professionals (GRCP) to implement the only business strategy that Principled Performance® can be achieved through.

Why did OCEG Develop Principled Performance®?

GRC Professionals are responsible for exercising caution before taking action, thoroughly analyzing matters, identifying and resolving issues, and ultimately serving as the pillar of stability within our organizations. At the end of the day, GRC professionals are protectors. Due to their roles in various departments like the board, executive teams, strategy, risk, compliance, quality, human resources, internal controls, information security, and audit, anyone with a GRC role is faced with a unique goal: to protect the integrity and efficiency of the organization and its people.

OCEG introduced Principled Performance® and GRC to address just that. When trained as GRC Professional (GRCP), you’re empowered to become a Principled Performer, addressing the problem at the core of GRC head-on.

The Problem: Volatility, Uncertainty, Complexity, and Ambiguity (VUCA) & Disconnection

At their core, a Principled Performer works to address volatility, uncertainty, complexity, and ambiguity (VUCA) within an organization by implementing a strategy to achieve Principled Performance®. VUCA causes organizations face substantial disconnection challenges that hinder their progress:

• Disconnected departments operating in silos and at cross-purposes.
• Disconnected people experiencing strained relationships, conflicts, and loneliness.
• Disconnected purpose and culture leading to misalignment with stakeholders.
• Disconnected and myopic skillsets limiting problem-solving from a single perspective.

When successfully implemented, a GRCP’s strategic approach will implement Principled Performance as a solution to disconnection.

The Solution: Principled Performance®

Principled Performance®, a outcome that can only be achieved through following a GRC Framework, emerges as the solution to overcome VUCA and disconnection. The OCEG community designed Principled Performance® and GRC as a cohesive framework to stabilize and connect organizations amid uncertainty and disconnection. In short, Principled Performers empower their organization to transition from isolated departments, individuals, objectives, and expertise to a more cohesive workplace where integrated capabilities, interconnected relationships, shared values, and interdisciplinary skills converge harmoniously.

How to Successfully Implement Principled Performance®

Principled Performance® can only be achieved by leveraging OCEG's Capability Model to integrate GRC capabilities, which offers organizations a systematic approach to achieve Principled Performance®. There are four key steps to achieving Principled Performance®:

1. LEARN: Understand the organization's context, culture, and key stakeholders to inform objectives, strategy, and actions.
2. ALIGN: Align strategy with objectives and actions, using effective decision-making that addresses values, opportunities, threats, and requirements.
3. PERFORM: Execute actions that promote and reward desirable outcomes, prevent and remediate undesirable situations, and swiftly detect incidents.
4. REVIEW: Continuously review the design and effectiveness of the strategy and actions to improve organizational performance.

When implementing OCEG’s key steps, professionals establish an approach that ensures 3 key outcomes:

1. The right people have the right information at the right times
2. Appropriate & achievable objectives are set
3. Effective controls are implemented to address uncertainty and act with integrity

When these 3 outcomes are experienced, successful GRC integration & Principled Performance® is achieved. From the moment Principled Performance® is achieved, a company yields numerous benefits, including:

• Cost savings
• Elimination of redundant activities
• Minimized disruptions to operations
• Improved information accuracy and quality
• Optimized processes