A Few Rules about Rules
Within most organized functions involving people, there are rules that define a code of conduct. Rules exist for games, organizations and communities. Rules are necessary. But in order for them to provide value, the intent must be clear, it must be carefully set, and the rules must be managed and enforced.
Establishing rules in business
Within business, it is often preferred to have as few rules as possible. Organizations can become so bound up with rules and bureaucratic red tape that employees don’t have time to do their job due to the amount of effort that goes into rule compliance.
Additionally, too many rules can stifle the element of creativity within people that is highly desired by progressive companies. The most talented employees perform at their highest level of productivity when provided a rule-free environment. Typically, such people operate under a highly professional code of conduct, practice common sense, and can be trusted in what they do.
However, there are some types of people who don’t have these same attributes and require many rules just to function. So, a rule-free business environment requires excellence in hiring.
A great way to reduce the threat of too many rules is to establish and follow a simple listing of values. This list is a “code of values,” and should be kept at a count of twelve or less. (For more information on developing a code of values, see “Sustaining Business Success” on pp. 20-21 of the May 2016 issue).
An owner should post this list of values at their business, refer to it as often as possible in company communications, and follow those values. Such a list defines desired attitudes and behavioral practices and has proven to be a resource that can eliminate hundreds of rules, while becoming a great tool in promoting the goodness of your organization to customers.
One final note on rule development. Many rules set up in an organization are the result of someone having done something wrong. As a consequence, the company puts into practice a new procedure that penalizes the majority of people who made no mistake or didn’t take advantage of a situation, all for the sake of protecting the company from the one, or few, who did. Don’t make new rules. Rather, apply corrective action to the guilty party and leave the others alone.
While managing rules is essential to their effectiveness, improper management can lead to “stacking.” Over a long period of time, as more and more people become involved in the development of rules, more and more rules can be stacked upon one another to a point where they don’t make sense.
Businesses change over time and that creates the need for organizations to review and eliminate rules that no longer apply to avoid this issue of stacking. Owners should pay as much attention to eliminating rules as to establishing new ones.
The quickest way to demoralize employees at an organization is to create rules and then not follow them. In such a case the highly talented people, mentioned earlier, follow the rules while witnessing the much lesser performers get away with breaking them. When this is the case, such highly talented people look for new employers.
This pattern of poor management of rules sets a very bad precedent and can lead to accusations of discrimination and unfair treatment. Be careful. If you’re going to have rules, you’d better have a reliable process of enforcement.
While the word and concept of “enforcement” has a negative ring to it, by reviewing applicable rules during the employee performance review process and drawing marks of praise for compliance, this can turn a negative into at least a neutral or even positive notion.